BRAMPTON, Ont. — Ontario's New Democrats would lower auto insurance rates by 40 per cent if elected next month, leader Andrea Horwath said Wednesday.

Horwath said she would ban rate increases for 18 months while a commission investigates and recommends a new system.

"Within two years you will see the 40 per cent reduction in bills," Horwath said at a campaign stop in an autobody shop in Brampton, Ont.

She said the auto insurance system is broken and that a new commission would examine all possibilities for a new system, from a public, government-run one to fully private.

"Auto insurance costs are unfair in Ontario," Horwath said. "We've known this for years and years and years, we have some of the lowest accident rates in the entire country and yet we have the highest auto insurance premiums. We need to fix this and we can fix this."

Horwath would also ban the practice of different auto insurance rates based on postal codes.

"This is not a gimmick, we will work hard to change the system," she said.

The commission would explore the no-fault insurance systems in Manitoba, Saskatchewan and British Columbia and Quebec's public and private hybrid system, she said.

Auto insurance rates would be frozen and the 40 per cent reduction would be pegged to that rate freeze, Horwath said.

The NDP would also introduce legislation to ensure the rate reductions are permanent, she said. 

The former Liberal government promised to decrease car insurance rates by 15 per cent in 2015 but failed, with then premier Kathleen Wynne later admitting it was a "stretch goal."

Liberal Leader Steven Del Duca said Wednesday he is focusing on the broader issue of affordability, pointing to his "buck-a-ride" transit pledge.

"We'll continue to look for ways to make auto insurance accessible and affordable and fair for people regardless of where they live in this province," he said at a campaign stop in Toronto. 

The Progressive Conservatives, who are seeking re-election, said in their April budget that they want to tweak auto insurance rules to allow more choice, ensure fairness and crack down on fraud. 

A government-commissioned report in 2017 found that Ontario has the most expensive auto insurance premiums in Canada, despite also having one of the lowest levels of collisions and fatalities.

The Liberal government only achieved a 3.3 per cent rate reduction by the end of their term, the finance ministry said in 2018, shortly before Doug Ford and the PCs formed government.

A Progressive Conservative spokeswoman said Wednesday that the party's plan to help drivers also includes continuing to build roads and highways, taking the tolls off Highways 412 and 418, and scrapping the licence plate sticker tax.

A 40 per cent reduction in rates is achievable, said David Marshall, an independent financial adviser who has consulted the province on auto insurance rates.

"But it's going to need a fundamental change in how the auto insurance policy is structured and how the benefits are administered," he said in an interview.

Marshall said Ontarians pay, on average, about 35 per cent more than drivers in other provinces.

A rate freeze and banning premiums on postal codes won't work in the long run because insurance companies will make up the difference elsewhere, he said. 

"These are politically appealing ideas, but they don't fundamentally reduce the cost to drivers," he said.

But Marshall said an independent commission is long overdue.

"Promising to do it within 18 months is also a good idea because this thing's going on long enough," he said.

"Governments have tinkered at the margins trying to reduce rates or trying to control premium increases so on and it hasn't worked. We need a fundamental redo."

Marshall recently wrote a report for the C.D. Howe Institute on the issue, which recommended Ontario stay away from the government-run systems like those in Manitoba and Saskatchewan.

"That's not a silver bullet because government, once they have control of something, tend to interfere, like in B.C. where they suppressed rates for a long time," he said.

Rather, the government should force insurance companies to tighten up the language on insurance policies that he says are overly vague and give way too much leeway to companies, he said.

The Insurance Bureau of Canada, an organization representing insurance companies, said the NDP's proposal would not save money for drivers.

"Proposals to freeze auto insurance rates and end the use of territory as a rating factor do little to address the underlying cost-pressures in the current system," the organization said in a statement. 

"Instead, these proposals would result in drivers across the province being unfairly penalized, and forced to subsidize the cost for high risk drivers in other regions."

The organization said a move to government-run insurance would be an "enormous burden" to taxpayers.

The bureau said it is willing to work with any party to "fix the defects in Ontario’s government-regulated auto insurance system that are placing economic hardship on drivers in this province."

Ontario's election is set for June 2.

This report by The Canadian Press was first published May 11, 2022

Liam Casey, The Canadian Press