The test of integrity


Got insurance?I’ve been complaining all this term that Collingwood’s standing committee system is broken. It is redundant, ineffective and expensive. It continues in use only because it was the brainchild of the interim CAO who The Block worship.

But it is about to come under a test: one that will determine the integrity and ethics of both the system and The Block.

On July 10, the Corporate and Community Services Standing Committee received a report on the services of Fire Marque, an insurance collection agency. The report was requested by Councillor Jeffrey, close friends (as are all of The Block) with one of the company’s salesmen: the former mayor.

What Fire Marque does is to bill insurance companies for the cost of fire department responses to emergencies – costs already paid for by your taxes. As explained on Elliott Insurance:

Fire Marque is basically a collection agency. They’ve enticed the municipalities to sign up with them to collect fire department coverages from the insurance companies’ policies. So after an individual has a fire, the fire department will send off information to Fire Marque about the situation and what it cost the fire department. Fire Marque will then contact the person who had the fire and ask who their insurance company is. Then they basically bill the insurance company for the fire department charges, up to the limit that is allowed under the [homeowners insurance] policy.

Fire Marque keeps 30%, and the rest goes to the municipality, essentially double-dipping. The homeowner or accident victim then faces a potential increase in his or her insurance policies as a result. So the homeowners get hit twice: through taxes and again through higher insurance rates. No, the municipality won’t lower your taxes because they double-dip. You’re still on the hook. Again from Elliott Insurance:

On the negative side, as insurance companies, our premiums are driven by our claims costs. So, if we are now paying for fire department charges that we were not paying for before, our claims are going to go up, and we will have to raise premiums to cover the extra costs. When you look at it from a community wide basis, financially it would be much better for the municipalities to just add a few dollars to our taxes because the same people who pay property taxes pay insurance.

Knowing it could raise insurance rates, homeowners may be reluctant to report a fire until too late.  They may try to put it out themselves rather than risk the rate hike. The very same effect happens with car accidents and home problems already. The new contract could end up putting more people’s lives and homes at risk because they hesitate to call for a service they know they will have to pay for.

Setting aside the ethics of this practice (read the full piece on the linked site and decide for yourself), the double-dipping, the harm to the taxpayer and whether the town should encourage ambulance-chasing tactics, let’s look at the standing committee system again.

First, a standing committee has only one power: to recommend a report or presentation go to the full council for consideration. Period. No power to pass anything else. If it doesn’t recommend forwarding something, that report should die there. If, that is, the system is actually democratic and fair.

On Monday, the CCSSC received the fire chief’s report on Fire Marque (read it here, page 31). Only four of the five committee members were in attendance (Mayor Cooper, Councillors Lloyd, Ecclestone and Doherty). Councillor Lloyd requested the recommendation to forward it to council be deferred until he had the opportunity to get more information about the service from the insurance industry, and find out what impact it had on residents.

Cooper and Lloyd voted yes. Doherty and Ecclestone voted no. The Block hates to get information that will challenge their preconceptions. Or anything they might have to read.

A tie is a defeat, so the deferral failed (the two Block members of course not wanting to delay getting their buddy’s contract in motion). Then the motion to recommend the report go to council came up and the vote was the same: a tie. Another defeat. So the report should die, right?

Here’s where it gets most interesting.

If the standing committee system has any validity, has any meaning or value, then the matter is dead. The report gets shelved and forgotten. If the system is, as I claim, failed and broken, and if as I also claim, the Block’s members on council have no ethics or integrity, they will connive a way to bring it back to council. They will pass the recommendation to sign their buddy’s contract. Which do you think is the most likely outcome?

Me too. And it will all be done without any public input from the people affected by this contract: homeowners in Collingwood. (I know, I know: The Block haven’t given us any chance for public input on any issue yet, so why would I think they’d start being open now?).

As the Elliott Insurance website concludes:

The people who buy insurance are the same people who pay taxes. What is the most economical way for that community to get more funding for their fire department? Is it through a program like Fire Marque or through direct taxation? I would say economically it is far better through direct taxation. I think people respect and understand fire departments [fighters] and they really have a trust in their local government, so if they raise some rates to provide the extra funds for the fire department, the community will understand. I believe the community would think that was far better than trying to get the funds through a program like Fire Marque.

Let’s see how council handles this on Monday. Which is more important to The Block: their remaining few friends or the wellbeing of all residents in this community? I suspect we all know what the answer will be.

Collingwood deserves better.


You can read similar concerns about Fire Marque in the Northumberland Today, Feb. 21, 2017. An earlier article in that paper, from Nov. 2016, concluded with a warning about the emotional impact of getting a bill after a traumatic event like a fire. And it will just create a more residential hostility towards council and the bureaucracy (and we already have that in busloads):

For the person who has had a fire, even a minor fire can be devastating and very emotional.
Getting a bill sent to your house for fire services might not be the best way for that community feeling, whether the insurance pays or not.

It also seems Fire Marque bills residents, too. In Port Hope this winter, residents were shocked to receive a letter after a fire, according to the Insurance Business Magazine:

On October 5, Orr received a letter from Fire Marque on behalf of the city looking to recover costs from the fire last June—it was a follow-up to the call she took much earlier. The company stated in its letter that “most property owners, when paying their premiums are unaware that coverage for the emergency services of their fire department exists in their policy wordings.”
“I couldn’t believe I was getting a bill for the fire department to come to my house,” Orr told Northumberland Today.
The letter further explained that the fire department insurance coverage is an “extended coverage and subject to various limitation in your policy, for example some policies have a $500 limit while other policies have more.”
Orr was sent another letter on October 24, detailing that she had to pay a subtotal of $3,631.52 for the fire trucks and firefighters. Actual repair costs to Orr’s home total at $2,341.67.

The magazine also goes on to note in a separate article that (emphasis added):

Other cities in Ontario (such as Kitchener, North Bay, Oshawa, and Sudbury) have used this system to recoup their firefighting costs. Meanwhile, other municipalities have told Thunder Bay that they are “ethically opposed to the process,” worried that insurance premiums in the province would increase as a result.

The Northumberland News reported on another such case in Port Hope last October, 2016, in which a homeowner was billed after a fire:

The resident, who didn’t want to be named, was then surprised when his insurance company received an invoice for about $7,000 from a company called Fire Marque.
The rural homeowner’s Fire Marque bill read as follows:
• Four units for 11.57 hours at $450 per hour (standard Ministry of Transportation rate)
• Eleven volunteer firefighters for 32 hours at $29.11 per hour
The total bill, including HST, totaled $6,930.63 and sparked a witch hunt for answers from neighbours and members of the rural community.

In July, 2015, the City of Prince Albert council unanimously rejected Fire Marque’s proposal, with councillors commenting that residents were already taxed for the service, and that insurance providers could start jacking up rates as a result.

In Jan. 2016, the Town of Richmond Hill found that the money returned wasn’t all it was promised to be:

… in almost all cases these municipalities indicated that the actual revenue they have received is less than the original estimate provided by Fire Marque, with actuals representing anywhere from 10% to 50% of the projected revenue.

The staff report also commented on the negative impact on the community:

There are concerns in the fire response community that trying to recover the costs of building fire response can damage the relationship between the community and their fire services, even if attempts are made to ensure that the communication only exists between the Town (or it’s agent) and the owner’s insurer. Firstly, the Town would need to pass a by-law authorizing such a charge specifically to property owners in order for insurer’s to reimburse the Town for costs. Although there is no data available in municipalities who have used cost recovery, there is a fear that it will result in residents and business experiencing a fire incident delaying a call for help if they perceive the fire to be manageable. As fire can quickly spread and because heat and smoke can be equally dangerous, this could have negative consequences for the overall fire safety profile of the community…
…although in providing their service Fire Marque asserts that recovering costs from homeowner and property owner insurance policies will not raise insurance premiums as it is already within most insurance contracts, the Town’s Risk Manager has advised that this is not something within their authority to guarantee. Indeed, if more municipalities in Ontario choose to pursue cost recovery, it would become a focus of the insurance industry and may lead to increases in premiums.

The report concluded:

As a result of the potential negative impact to the relationship between Fire and Emergency Services and residents resulting from the Town’s pursuit of cost recovery from insurance policies, this report does not recommend adopting a fee for fire response to a structure. The limited anticipated revenue from this source, combined with costs of contracting this service to an external firm, make such an initiative unjustifiable in staff’s view.

Of course, a negative impact on the community or the residents’ deteriorating relationship with the town has never bothered The Block. In fact, they seem to have gone out of their way to worsen community relations through their roadblocks to the hospital redevelopment.

And in Meaford, while a contract was signed with Fire Marque, it did not pass unopposed:

Opposition to this bylaw came from the Insurance Bureau of Canada, North Waterloo Farmers Mutual Ins.Co.and various other Insurance groups who warned against rising insurance premiums… Opposition also came from former Fire Chief Steve Nickels, for a number of reasons, one of them being ‘With enough fire department invoices premiums will of course go up’ and ‘when a fire department responds and there is no damage……the homeowner would end up paying the deductible portion of the bill when there is not a claim for damages… is possible that the insurance company will …refuse to renew the homeowners insurance as a means of reducing risk.’ There are other reasons distinct from insurance claims why this contract was opposed, probably the most important being that of public safety. If a homeowner is concerned about added costs, will they be hesitant in contacting the fire department and thus increase the risk of danger. The Ontario Fire Marshals Office is very clear about NOT supporting billing for fire response and one of its guidelines is ‘user fees should not be considered if they have the potential to jeopardize fire/life safety’.

Fire Marque’s proposal was rejected by the fire chief in Windsor in spring, 2016. He said the practice will result in higher premiums and quoted Sec. 76 of Ontario’s Fire Protection and Prevention legislation which says:

No action for damages from accidental fire
76. No action shall be brought against any person in whose house or building or on whose land any fire accidentally begins, nor shall any recompense be made by that person for any damage suffered thereby; but no agreement between a landlord and tenant is defeated or made void by this Act. 1997, c. 4, s. 76.

Shortsighted councils whose only focus is on money will always look eagerly to this sort of contract without considering the consequences and the impact on residents. Back in Sept., 2012, the former Collingwood fire chief rejected the Fire Marque proposal. Collingwood Council followed his lead and unanimously passed a motion to reject it, too:

No. 394
WHEREAS taxpayers in the Town of Collingwood already pay for fire and safety services through property taxes and the Town of Collingwood does not wish to deter residents from calling emergency services out of concern over being charged additional fees for those services or calls;
THEREFORE BE IT RESOLVED THAT the Town of Collingwood will not use outside agencies to collect fees or recover costs for emergency services or calls to those services;
AND FURTHER THAT this resolution be circulated to respective agencies including the Association of Municipalities of Ontario.
CARRIED- (recorded vote)

Sadly, those days of forward thinking, of high standards and ethics at council are long past. Since this council fired its own integrity commissioner early in its term to avoid scrutiny into their ethics, there really isn’t anyone to even investigate their behaviour.

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  1. You should note that the former mayor didn’t have to make a presentation to council in public this time to try to sell his company’s services. So the public didn’t even get to hear about the company and he didn’t have to answer awkward questions about or the potential impact on their insurance rates. No, it was just another nudge-nudge-wink-wink deal cooked up in secret by The Block. What a devious bunch, eh?

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