It’s becoming increasingly more difficult for municipalities to get insured these days.
Mayor Stewart Strathearn brought to regular council recently a support of AMO (Association of Municipalities Ontario) recommendations addressing municipal insurance costs on the rise.
AMO put out a call to action at the start of the year over joint and several liability, which looks at exponentially increasing insurance costs, and asked municipal councils to support seven recommendations toward finding a balance between risks and liabilities to municipalities.
According to the AMO, joint and several liability is described as: “If other parties are unable to pay, damages can be recovered from any defendant, even if they are deemed just one per cent responsible. As a result, a fraction of fault can push municipalities to pay huge damage awards. Often, they are targeted deliberately as ‘deep pocket’ insurers when other defendants do not have the means to pay.”
The notice of motion put forward by Strathearn was in regards to a 2019 submission by AMO to the Attorney General of Ontario titled “Towards a Reasonable Balance,” and made note of the 2018 commit by Premier Doug Ford to help municipal governments manage their risks and costs.
“Has there been any signalling from the province that they’re open to reviewing this,” asked Coun. Jonathan Main, “because this is a perennial issue? Going through AMO is the best venue because they’re the provincial organization that’s going to deal with this, and they always bring it up annually?”
The question registered a laugh from Deputy Mayor Mike Ross, who supported the motion wholeheartedly.
Strathearn responded, “When you go to the AMO conference they have this thing called the parapet…, questions directly to the ministers. Every time this question is asked of the Attorney General or the Premier, they sort of shrink back and – to quote a good friend of mine – ‘shuck and jive.'”
“The short answer to your question is: probably not,” Stratearn continued. “But it is an election year, I understand from the numbers that it’s kind of close, so they may just decide to act on this matter although there are some who are of the belief that it’s blowing in the wind.”
Strathearn noted that if pressure isn’t kept up, municipalities will find themselves uninsurable in greater numbers.
“The consequences of that given a joint several are still there; you self-fund yourself and it would be in a racket – I would not want to find myself in that place,” stated Strathearn.
Coun. Bill Gordon offered that Midland was “adding our voice to the AMO chorus who’s lobbying the government for this on behalf of all the member municipalities,” adding that joint and several liability is a “crippling reality,” garnering agreement from both Ross and Strathearn.
In recent 2022 budget discussions at Tiny Township, the issue was brought up by Tiny council and staff.
“Some of our neighbouring municipalities are being told that their increases could be as high as 30 per cent or 40 per cent; this has been a constant trend over the past few years,” explained Tiny CAO Robert Lamb late last year. He added that joint and severed liability “is driving insurance rates higher and higher as municipalities are spending more and more time in court fighting frivolous claims against the municipality, and insurance companies are seeing us as more and more risks all the time.”
Lamb noted that natural disasters, climate change, and change of liquidity were factors in rising municipal insurance costs.
Some of the recommendations by the AMO include adopting a model of full proportionate liability to replace the joint and several liability, implementation of enhancements to the limitations period, and implementation of an economic loss awards cap.
The “Towards a Reasonable Balance: Addressing growing municipal liability and insurance costs” statement with full recommendations is available as a PDF document on the AMO website.
Council meetings are held every third Wednesday, and can be viewed on Rogers TV cable channel 53, or through the livestream on the Rogers TV website. Archives of council meetings are available through Rogers TV and on the Town of Midland’s YouTube channel.
