Alberta
Albertans no longer required to report collisions when damages under $5,000.00
Saving drivers and law enforcement time
Alberta’s government is cutting red tape and saving Albertans time by increasing the property damage collision reporting threshold to $5,000 from $2,000.
To better reflect current vehicle repair costs, effective Jan. 1, drivers will not have to report property damage from a collision to law enforcement unless the cost of the damage is more than $5,000. The new $5,000 threshold was a carefully chosen figure to reduce reporting minor collisions while also making it difficult for fraudulent resales of damaged vehicles.
This change will also free up law enforcement, who are required to commit a significant number of policing resources for processing collision reports. With this change, police officers and administrative staff can spend more time improving public safety.
“Traffic accidents happen. Alberta is saving drivers time and money by not having them report simple fender-benders to the police. Thousands of traffic accident reports clog up our justice system and strains police resources. This is a common-sense change that will benefit drivers and police.”
“We continue to cut red tape by increasing the collision reporting threshold. Waiting in line to file a report is stressful, time-consuming and takes you away from your work and family. This change will alleviate that stress and get you back on the road faster.”
Collisions resulting in injuries and fatalities will continue to be reported regardless of the estimated cost of property damage repairs. Future increases to the collision reporting threshold will be adjusted for inflation based on annual calculations using the Statistics Canada consumer price index, further reducing red tape and time spent by Albertans reporting low dollar value collisions.
“AACP is supportive of increasing the threshold for the reporting of property damage collisions to police. These increases better reflect modern vehicle repair and replacement costs and will result in less minor, non-injury collisions having to be reported to police.”
“This increase to the damage reporting threshold aligns with a resolution Alberta Municipalities members passed at our 2023 convention. We are pleased to see the provincial government take action on this issue.”
The carrier collision reporting threshold will be increased to match the collision reporting threshold of $5,000. Commercial carriers will save time by no longer having to go through an administrative process to eliminate low dollar value property damage collisions from their carrier profile.
“This is excellent news for the transportation mobility industry. We welcome the Alberta government’s move to increase the collision reporting threshold, as it will cut red tape and save time for transportation mobility providers and Alberta consumers.”
Alberta last increased its property damage collision reporting threshold to $2,000 from $1,000 on Jan. 1, 2011, and implemented the commercial carrier reporting threshold ($1,000) in 2009.
Quick facts
- In 2021, there were 89,976 property damage-only collisions reported by law enforcement.
- On average, about 90 per cent of all collisions only involve property damage.
- Data from the Insurance Bureau of Canada shows that in 2022, the average property damage collision claim in Alberta was $6,756.
From the Fraser Institute
By Spencer Gudewill and Tegan Hill
Last November, Premier Danielle Smith announced that her government will give up to $1.8 billion in subsidies to Dow Chemicals, which plans to expand a petrochemical project northeast of Edmonton. In other words, $1.8 billion in corporate welfare.
And this is just one example of corporate welfare paid for by Albertans.
According to a recent study published by the Fraser Institute, from 2007 to 2021, the latest year of available data, the Alberta government spent $31.0 billion (inflation-adjusted) on subsidies (a.k.a. corporate welfare) to select firms and businesses, purportedly to help Albertans. And this number excludes other forms of government handouts such as loan guarantees, direct investment and regulatory or tax privileges for particular firms and industries. So the total cost of corporate welfare in Alberta is likely much higher.
Why should Albertans care?
First off, there’s little evidence that corporate welfare generates widespread economic growth or jobs. In fact, evidence suggests the contrary—that subsidies result in a net loss to the economy by shifting resources to less productive sectors or locations (what economists call the “substitution effect”) and/or by keeping businesses alive that are otherwise economically unviable (i.e. “zombie companies”). This misallocation of resources leads to a less efficient, less productive and less prosperous Alberta.
And there are other costs to corporate welfare.
For example, between 2007 and 2019 (the latest year of pre-COVID data), every year on average the Alberta government spent 35 cents (out of every dollar of business income tax revenue it collected) on corporate welfare. Given that workers bear the burden of more than half of any business income tax indirectly through lower wages, if the government reduced business income taxes rather than spend money on corporate welfare, workers could benefit.
Moreover, Premier Smith failed in last month’s provincial budget to provide promised personal income tax relief and create a lower tax bracket for incomes below $60,000 to provide $760 in annual savings for Albertans (on average). But in 2019, after adjusting for inflation, the Alberta government spent $2.4 billion on corporate welfare—equivalent to $1,034 per tax filer. Clearly, instead of subsidizing select businesses, the Smith government could have kept its promise to lower personal income taxes.
Finally, there’s the Heritage Fund, which the Alberta government created almost 50 years ago to save a share of the province’s resource wealth for the future.
In her 2024 budget, Premier Smith earmarked $2.0 billion for the Heritage Fund this fiscal year—almost the exact amount spent on corporate welfare each year (on average) between 2007 and 2019. Put another way, the Alberta government could save twice as much in the Heritage Fund in 2024/25 if it ended corporate welfare, which would help Premier Smith keep her promise to build up the Heritage Fund to between $250 billion and $400 billion by 2050.
By eliminating corporate welfare, the Smith government can create fiscal room to reduce personal and business income taxes, or save more in the Heritage Fund. Any of these options will benefit Albertans far more than wasteful billion-dollar subsidies to favoured firms.
Authors:
Alberta
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