Under the Dome

with Larry Kusch and Bruce Owen

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  • MPI's counter attack

    08/25/2014 1:55 AM

    What's the real reason why Manitoba Public Insurance has picked a fight with the Public Utilities Board?

    My guess is that they see an opening and have the political blessing to take advantage of it.

    It's difficult to believe that newly-minted MPI boss Dan Guimond is doing this in isolation, and would not have briefed Attorney General Andrew Swan, the minister in charge of MPI, before letting loose the Crown corporation's lawyers on the PUB.

    Guimond says in a recent letter to the PUB that its process, to evaluate MPI's request for a 3.4 per cent rate increase for next year, has strayed too far from its legislative mandate. He also says the PUB and various intervener lobby groups are asking too many extraneous questions that have nothing to do with the rate request.

    Guimond says the PUB and the intervenors can ask all the questions they want about compulsory driver and vehicle or basic insurance, but nothing else. Some 400 submitted questions have gone answered by MPI.

    Does he have a point?

    The PUB is supposed to be an independent body, set up by the province, that acts in the best interests of Manitobans, not only in how much we pay for car insurance, but also in electricity and natural gas.

    Until now, it's been generally thought that it can poke its nose as far as it wants to do its job.

    In doing so the PUB has created a little bit of an industry, a nit-picking industry. It's created a rate-hearing process where the applicant, be it MPI or Manitoba Hydro, has to vigorously defend itself from the PUB and the phalanx of interveners on the sidelines, which have been approved by the PUB to ask questions.

    The stage is set that upcoming rate-request hearing will be adversarial. MPI is the monopoly evil-doer and the PUB and the intervenors are white knights on horseback riding to the rescue. No matter what MPI says or does in this process, it's doomed to fail.

    The interveners in this particular case are the Manitoba branch of the Canadian Consumers' Association, the Coalition of Manitoba Motorcycle Groups, CAA Manitoba, the Automotive Recyclers Association of Manitoba, Bike Winnipeg and the Insurance Brokers Association of Manitoba.

    MPI has made it no secret that because it's their rate hearing that they pay the freight for the entire hearing, meaning they get to pay for the PUB and the interveners to ask them all sorts of questions. MPI's ballpark estimate for the hearing is about $2 million.

    Guimond says MPI has had enough of all those "confrontational" questions. He says he wants a more defined process rather than the scattergun approach now. Examples of intervener questions in this rate application include how it calculates the value of its assets, hires contractors to upgrade its IT, trains young drivers and buys used auto parts to fix damaged cars.

    The PUB has its own questions on these subjects:

    - the Dynamic Capital Adequacy Test, or what should be the target rate stabilization reserve level; and total equity level;
    - Road safety, or what MPI is doing to reduce crashes and a review of related expenditures, including efforts regarding vulnerable road users; the cost of operations; benchmarking, including with respect to other provinces;
    - Interest-rate forecasting methodology;
    - The disposition of excess reserves in the extension and special risk extension lines of business;
    - the value proposition for drivers for the rate increase being requested;
    - new or enhanced services being developed or examined by MPI;
    - alternate rate indications based on accepted actuarial practice;
    - unfavourable run-off of prior year claims during 2013-14; IT projects, including the physical damage re-engineering project;
    - the performance of the investment portfolio and the content of the portfolio and the investment policy statement.

    "The board will also consider a variety of other issues as they may arise," PUB hearing chairwoman Karen Botting said at an earlier hearing. "As always, MPI bears the onus in this proceeding of satisfying the board that its application should be granted on the whole of the evidence that it provides."

    Reading this it appears the PUB believes it has carte blanche when it comes to MPI, or any other applicant, and that effectively, the buck stops with them. Reading this it appears the PUB believes it, a government-appointed tribunal, can ask whatever it decides appropriate above anyone else who oversees MPI's operations; MPI's executives, its board of directors, Swan's office, cabinet, Crown Corporations Council, the auditor general and legislative standing committees.

    In response, MPI basically says the PUB become the chamber of second-guessing.

    PUB chairman Régis Gosselin has said that the board does not tell MPI how to run its operations.

    "The board's function is not only to protect consumers from unreasonable charges, or changes rather, but also to ensure the fiscal health of the corporation in fairness," he added.

    "It seems pretty clear to me that there's a responsibility on this board, based on this precedent, there's a responsibility on this board to scrutinize the costs of the corporation."

    Gosselin also took umbrage to MPI's claim, that's its basic line of Autopac insurance and its rate stabilization fund are unhealthy, because the PUB didn't grant them their full rate increase last year.

    "So to assign the responsibility to PUB for having failed to grant you what you wanted, I think is disingenuous," he said. "I'm really perplexed by your statement that would be made to that effect."

    Which leads me back to my first question: What does MPI really want?

    It goes back to a 2011 court case which saw MPI and the PUB fight it out over the disclosure of information by MPI to the PUB.

    The appeal court said while the fight between the two was interesting, it lacked the specific evidence of what the two were actually fighting about.

    "The court will not entertain or answer a stated case where the question is abstract, hypothetical, speculative, or overly broad," the appeal court said.

    Guimond and MPI are now giving the court something meatier to chew on.

    Guimond and MPI are going to get the province's highest court to lay down the ground rules for how it and the PUB are supposed to play.

    Not the Selinger government. Whatever the court decides, it won't stick to the NDP. In theory, anyway.


  • The thing about Frank

    08/13/2014 1:01 PM



  • Pallister's bad month

    07/22/2014 1:20 AM

    From Hansard on June 12, on the last day Opposition Leader Brian Pallister and Premier Greg Selinger squared off in the house:

    Mr. Brian Pallister (Leader of the Official Opposition): Well, Mr. Speaker, this sitting of the Legislature is-really has flown by, and I want to wish you and all of us in the House and our guests today and pages and everyone here, including members of the media, I guess, the best this summer for a well-deserved break and time with family and friends.

    I know that this session, it almost seems, compared to last year, that we haven't done enough, that we haven't been here long enough. But I think, for many of us, we'll welcome the opportunity to reclaim a sense of more balanced life. So I wish everyone the best this summer.

    With that in mind, I will ask a question of the Premier that has been crossing the lips of a number of his colleagues and, of course, many in this place, given that this may be the last opportunity to ask this question:

    Is he intending to resign prior to the next sitting of the Legislature?

    Hon. Greg Selinger (Premier): First of all, I'd like to thank all the pages and all the staff for the service they've provided.

    And the member opposite may not think that he's done very much during this session, and I would agree with that, Mr. Speaker.

    But, Mr. Speaker, on this side of the House we believe we've made substantial progress for Manitobans: providing good jobs to Manitobans, building roads and flood protection for Manitobans, making sure that Manitobans have apprenticeship opportunities, making sure that our schools are properly funded, expanding daycare opportunities in Manitoba for working families.

    Mr. Speaker, those are just some of our accomplishments. I look forward to doing much more every single day as we go forward.

    Some Honourable Members: Oh, oh.

    Mr. Speaker: Order, please. Order. Order, please.

    If you were to pick a moment when things started to go sideways for Brian Pallister, perhaps this is it.

    It was the first time Selinger got a good zinger in, and for a brief moment it took the house by surprise that the normally staid premier could be so quick with a one-liner:

    "And the member opposite may not think that he's done very much during this session, and I would agree with that, Mr. Speaker."

    Just days earlier Pallister was getting headlines for taking the provincial government to court over its raising of the provincial sales tax last year.

    We all know by now he lost.

    And when you read the decision, he lost big.

    Court rulings are by nature, and depending on the case, generally long and tough to slog through for armchair lawyers.

    Not this one. Court of Queen's Bench Judge Kenneth Hanssen's was only 15 pages. Short, to the point and an easy read, an indication Hanssen didn't have to hit the law books to write his decision.

    What Hanssen also addressed was the 1995 law, inspired by the former PC government of Gary Filmon, and its requirement that a future government go to the people in a referendum to decide a major tax hike.

    Hanssen basically said that referendum requirement had no legal merit, or that when held up in front of long-established Canadian law, it had less value than the paper it was printed on.

    "I am satisfied that any attempt to transfer legislative power with respect to a money bill away from the Legislative Assembly to the electorate is inconsistent with the express provisions of s. 92 of the Constitution Act, 1867. Section 92(2) provides:

    - In each province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say,

    - Direct Taxation within the Province in order to the raising of a Revenue for Provincial Purposes.

    For Pallister and his PCs, who've held up the referendum requirement as sacrosanct, this is not good. Their argument for a referendum is legally invalid, according to Hanssen's decision.

    What it means is that is that anytime they bring up referendum and PST in the same sentence, the NDP only have to point to Hanssen's decision, and the PC's handed it to them on a platter.

    Perhaps an unintended consequence, but Pallister only has himself to blame.

    Now comes the summer flood.

    As colleague Dan Lett writes, for all intents and purposes, Pallister was Mr. Invisible during the flood.

    Also not good for the PCs.

    His decision to be somewhere else means anything critical he says on the flood file in the coming months can be easily shot down by the NDP:

    "Whatever Brian, where were you?" they will chirp in unison.

    But there's more.

    The government, as it always does, offers private briefings to Opposition MLAs on the flood situation if their constituency is getting hit by flooding.

    A few PCs MLAs and staffers participated in at least one of the four the government says it offered this summer.  There was also a phone number made available for each of them to participate on a conference call. Infrastructure and Transportation Minister Steve Ashton's office says Pallister did not call in for any and did not attend any in person.

    Again, not good. It's just more ammo for the NDP. And again, Pallister only has himself to blame.

    Here's a sample of what's ahead for him:

    "I know from talking to the premier how much he's been out talking to people and how much that affects his view of what we need to do for the flood," Finance Minister Jennifer Howard says.

    "I don't think you can replace going out and talking to people who are directly affected and who are worried about their houses or worried about their businesses or worried about their farms. I know when the premier goes out and does that, it has an effect on the decisions we make."

    There's a bigger reason why Pallister should've been out sandbagging, alongside some of his caucus members and the military.

    Certainly, it has to do with being seen, and showing support, compassion and even leadership. (Watch a video clip of former PC Leader Hugh McFadyen in 2009 after Breezy Point on the Red River was wiped off the map because of ice jams). 

    It also has to do with the future of the province, Howard says.

    She says this summer's flooding is expected to damage the province's overall economy for months to come, not only in the cost to fight it and in compensation, but to agriculture, tourism, businesses in the flood zone and to those who had to take time off work to protect their properties.

    "That all drags on the economy and growth already looks like it's going to slow in the country for this year and this flood in Manitoba I think will have an impact on our own growth," Howard said.

    Selinger has already said the bill for this summer's flooding on the Assiniboine River is at least $200 million and counting.

    Then there's the estimated $300-million cost of improving flood protection, particularly on Lake Manitoba and Lake St. Martin. The government says it wants to build both as soon as possible.

    "I think for any politician, going out to talk to Manitobans, especially when they're experiencing a crisis, you can't replace that with a briefing note or a summary," Howard says. " The role of a politician is to go out and listen to what people have to tell you, especially when things are rough for them. It's not always easy, but it affects the way you do the job."



  • Crying wolf

    07/15/2014 5:31 PM

    Not that long ago I had conversation with a gentleman who lives on Lake Manitoba. 

    I met him during the height of the 2011 flood along with a lot of other folks who lost their homes and cottages to the flooded lake's pounding waves. We've stayed in contact since.

    He said something that's stuck with me over the course of the past month when flooding on the Assiniboine River got more serious. His fear was history might repeat itself.

    "We've got to be careful how we approach this," he said, explaining the adverse impact on Lake Manitoba by the use of the Portage Diversion. "We can't be seen to be crying wolf."

    Well, with all respect, folks in and around Lake Manitoba are "crying wolf" and with each passing day they become less credible. Judging by the some of the comments I've read and heard, I would even go so far to say some are also being racist in their hyperbolic fervor that the province drain their lake at the expense of First Nations people living downstream at Fairford and Lake St. Martin. They conveniently forget the people who were displaced and the communities that have become ghost towns in the aftermath of 2011.

    They all blame Premier Greg Selinger and his government for their woes this summer. They essentially say the government shouldn't be using the Portage Diversion this year, like it did in 2011, and flood their lake again.

    They blame the NDP for being too slow to act in building a bigger drain for Lake Manitoba. They say the NDP had a whole three years. Where's the drain? Why are you sacrificing us again? Why don't you care?

    They would blame Selinger for the rain, too, if they could, but that would be stretching things too far.

    Lake Winnipeg is flooding, too, in part because of the high, rain-fed water flowing into it from The Lake of the Woods on the Winnipeg River.

    Certainly, those farmers who've been flooded artificially because of the Portage Diversion must be fairly compensated and quickly.

    On Tuesday, the diversion was sending 31,450 cubic feet per second of water into Lake Manitoba. That amount is to rise to 35,000 cfs in the next two to three days and then is to drop significantly.

    In comparing spring 2011 and this summer, the province says the diversion funneled more water into the lake over a longer period of time in 2011, almost three months in which the diversion's inflow was about 30,000 cfs. This summer, it will be less than a month's duration. Translation? It's not 2011 again. Not even close.

    It also bears repeating that anyone who rebuilt on Lake Manitoba after the 2011 flood had to build at an elevation of 822 feet above sea level so they would be protected in the event of future flooding. Lake Manitoba reached its highest level during the 2011 flood when it peaked at 817.1 ft. asl.

    Some complained only two years ago that 822 feet was too high and that the government was being unreasonable.

    Then there's the convenient re-writing or forgetting of history-that the NDP somehow is responsible for the creation of all the flood protection works that go from the Shellmouth Dam near Russell to the Red River Floodway gates just outside Winnipeg.

    All these flood protection works are actually the result of the 1950 flood, and were first recommended under the Liberal government of Douglas Campbell in the mid-50s and built by Conservative Premier Duff Roblin after he became premier in 1958.

    In 1958, Selinger was seven years old.

    What he's stuck with today day is the legacy of those decisions. What's he's stuck with is trying to figure how to reasonably use all these flood control works at time when we're experiencing more frequent flood events on the Red and Assiniboine Rivers. And way, way more rain.

    The recommendation to build a new outlet for Lake Manitoba and Lake St. Martin only became public April 8, 2013 after the independent Lake Manitoba-Lake St. Martin Regulation Review Committee submitted its report. The committee was appointed by the government one year earlier.

    In its report, the committee said it recognized that control of Lake St. Martin levels must be attained before additional capacity is added to the outlet of Lake Manitoba.

    "The Committee recognizes that any new works affecting Lake St. Martin will require substantive discussion with the First Nations bordering Lake St. Martin and the Dauphin River," it said in its report.

    That consultation process is in its infancy and the wider public consultation process is to start this fall. Things were to have started last month, but were postponed until the summer flood threat passed.

    The province has already said it's examining six options to improve the outlet for Lake Manitoba, and is doing so weighing the type of work involved, like how much rock should be blasted through to the area's topography and the total cost of the project.

    It's also planning how it can drain Lake St. Martin without impacting the residents downstream of any new channel and their livelihoods.

    For anyone to suggest Selinger and his NDP could have by now already dug the two new channels defies common sense.

    Worse, it undermines your credibility to the point few listen.



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About Larry Kusch and Bruce Owen

Larry Kusch has been a journalist for 30 years, the last 20 with the Winnipeg Free Press. His is one of the newspaper's two legislative bureau reporters.

Raised on a Saskatchewan farm, he received an honours journalism degree from Carleton University in 1975.

At the Free Press, Larry has also worked as a general assignment reporter, business reporter, copy editor and assistant city editor.

Bruce Owen joined the Winnipeg Free Press in 1990 after four years working in other media.

He's worked in a number of positions at the Freep, including pet columnist, assistant city editor and police reporter. Right now he takes up space at the Manitoba legislature.

Bruce is one of five reporters who won a National Newspaper Award for the paper’s coverage of the 1997 Flood of the Century. He's also the recipient of the 1996 Volunteer Centre of Winnipeg Media Golden Hand Award and the 1995 Canadian Federation of Humane Societies Media Commendation Award.

In a past life Bruce worked at YMCA-YWCA Camp Stephens. He has a blog where he and others write about camp and the people who worked and played there.

You can also find Bruce on Twitter where he posts and retweets all sorts of stuff.

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