Manitoba Public Insurance is asking the Public Utilities Board for a 2.7 per cent overall rate increase for the 2018-19 insurance year.
The average passenger vehicle owner would pay about $29 more in premiums per year should the application be approved, MPI said in its general rate application filed Friday.
About 35.5 per cent of all Manitoba vehicle owners will see no change or a decrease in premiums over 2017-18 rates, it said. The average premium for the private passenger vehicle class will be $1,086.
In addition, commercial rates would increase 1.3 per cent, public rates 1.1 per cent, motorcycles 2.7 per cent and trailers 11.4 per cent, but off-road vehicle rates would drop 16.7 per cent, MPI said.
The rates would take effect March 1, but because of staggered renewal dates, some vehicle owners would not pay higher rates until February 2019.
The rate request could have been as high as 7.7 per cent had the Crown corporation not been so prudent, MPI president and CEO Dan Guimond said.
"The overall premium revenue requirement for the basic insurance program in 2018-19 results from an ongoing focus on fiscal prudence and cost containment, which results in a direct financial benefit for Manitoba ratepayers," Guimond said Friday in a prepared statement. "Without these efforts, the indicated rate requirement would have been significantly higher."
None of that sits well with the watchdog Consumers’ Association of Canada, which will oppose the application with vigour, said lawyer Byron Williams.
He said MPI’s request will bring in $17 million more than inflation and argued its request to alleviate undercapitalization of the agency’s reserve fund isn’t evidence-based.
"The MPI rate application cannot be considered in isolation," Williams said, adding the application coincides with "its sister Crown corporation, Manitoba Hydro, seeking rate-shock level of rate increases" of 7.9 per cent for the next five years.
"In recent years, the independent review of the Public Utilities Board has identified challenges of Manitoba Public Insurance related to the rigorous management of its information technology expenditures. Last year, the independent review identified concerns with an investment portfolio that offered modest returns for undue risk," Williams said.
New Democrat MLA Andrew Swan accused the Conservative government of ignoring higher costs for Manitobans after a 3.7 per cent MPI increase as of March 1.
"Once again, the premier and his cabinet are sitting on their hands while their Crown corporation seeks to impose rate hikes," Swan said. "The government has a duty to keep vehicle insurance rates affordable for families and businesses and it’s failing to uphold that duty.
"That reserve fund is already higher than the PUB says is necessary to shield MPI from fluctuations in costs or changes in its investments. Motorists should not have to shoulder the burden of paying for an unnecessary increase in the reserve fund."
MPI is blaming climate change — notably shifting weather patterns — for more than half of its $85.2-million net operating loss last year, almost $54 million more than the Crown corporation lost the year before. However, that was offset by cost reductions and an increase in investment income of $101.4 million.
The public insurer’s 2016 annual report says hail damage accounts for $45.1 million of last year’s operating losses, and notes Manitoba did not receive any significant hailstorm damage prior to 1996.
The proposed rate increase would also help boost its reserve funds against major weather damage or market fluctuation, MPI said.
It is also not clear how the legalization of marijuana — expected by July 1, 2018 — could affect MPI’s rates.
Justice Minister Heather Stefanson has warned of the dangers of driving under the influence, and championed the Cannabis Harm Prevention Act, which recently passed in the legislature.
It would allow for 24-hour licence suspensions if a police officer believes a driver is under the influence of the drug and unable to operate a vehicle safely. Drivers in the graduated licence program could face further consequences if they receive a 24-hour suspension.
The bill also makes it illegal to consume marijuana inside a moving vehicle.