VICTORIA, B.C. — B.C. New Democrats claim the Liberal government is looting the Insurance Corporation of B.C. to pad provincial coffers when it could have been cutting auto insurance rates, but the government says its actions will actually save tax dollars.

Opposition finance critic Bruce Ralston referred to Tuesday’s provincial budget, which indicates the government will take $778 million from ICBC reserve funds over the next three years.

“The only conclusion a reasonable person can draw is that the finance minister is using this to patch some of the holes in his budget,” Ralston said in Question Period Thursday.

But Finance Minister Colin Hansen said Ralston is mistaken if he thinks the transfer will result in more bottom line revenue for the province.

“It does not. these are revenues that have already been reflected in the consolidated financial statements of the province over the last number of years,” he said.

New Democrat House Leader Mike Farnworth also said the money could have been used to reduce auto insurance premiums for drivers.

“Why did the minister choose to tell motorists in British Columbia to take a hike instead of allowing the (ICBC) board the option of giving them further rebates?” he asked.

But Hansen said ICBC had built up a large reserve fund in the optional insurance side of its business, and such a big surplus isn’t required under international insurance standards.

He said the government can use the funds as an asset to lower its borrowing costs, saving money.

“It makes sense, actually, on behalf of the shareholders and the taxpayers of British Columbia, that we actually utilize this excess capital to make sure that we can offset our borrowing requirements and thereby save taxpayers dollars,” he said.

“This is a huge net benefit.”

Hansen also said the move will not push up rates for basic or optional auto insurance and people can buy their optional coverage from either ICBC or private companies since the Liberals opened the optional market to the private sector several years ago.

“That’s a competitive marketplace that will ensure that as long as government maintains a level playing field, which is what we are, British Columbia motorists are going to get the best rates possible on optional coverage,” he said.

Under B.C. law, motorists must buy their basic insurance from ICBC, but optional coverage, including comprehensive insurance, can be purchased from private sector insurers.

NDP says auto insurance reserves looted; Liberals say they're saving money