CFIB and IBC call on province to drop taxes on auto insurance policies

by Staff

With the Alberta budget looming on the horizon, the Canadian Federation of Independent Business (CFIB) and Insurance Bureau of Canada (IBC) are taking the opportunity to call on the provincial government to cut the two taxes charged on auto insurance policies to provide more affordability for Albertans.

The province currently charges drivers a 4 per cent Insurance Premium Tax (IPT) on every driver’s auto insurance policy, a tax that CFIB says has grown by 28 per cent since 2018. That tax has hit Albertans with more than $1 billion in increased costs. Additionally, the Government of Albertacharges an auto insurance levy to recover health care costs. This levy is anticipated to rise to 28 per cent this year, rising to $86.8 million.

CFIB and IBC say there combined taxes will add roughly $100 to every driver’s insurance policy each year.

“Alberta’s auto insurance market is under considerable strain due to inflation, severe weather, auto theft and rising legal costs,” said IBC Pacific and Western Vice-President Aaron Sutherland. “IBC is eager to work with the government to undertake reforms to address these costs and improve the affordability of auto insurance. In the interim, we are asking the province to remove – or at the very least pause – the Insurance Premium Tax and cost-recovery levy for health care as a way to provide near-term relief to drivers.”

CFIB believes the removal of the IPT would assist the province’s business owners, who cited in CFIB’s 2023 surveys insurance costs as a major cost constraint. Additionally, 71% identified insurance costs as the most harmful to their business, second only to utility costs.

“As part of the Throne Speech, the government committed to affordability and insurance reforms that would reduce premium costs,” said CFIB’s Alberta Provincial Affairs Director Annie Dormuth. “One quick and effective way for the government to fulfil its commitment is to pause or reduce the IPT. Doing so will help Alberta small businesses and families cope with cost increases and inflationary pressures.”

CFIB says that although the government announced a cap on auto insurance rates last November while it explores long-term solutions to improve affordability, the rate cap does not address the costs underlying coverage and will do little to improve the affordability of auto insurance for drivers.

The business advocacy group has put forward what it calls the Enhancing Care & Expanding Choice proposal, which it believes could save drivers up to $200 on average.

The document can be found online at



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