Manitoba Public Insurance wants to get into the business of road design and construction, funding infrastructure works with government that would reduce accidents and, theoretically, cut insurance claims. This would be specious use of premiums paid by ratepayers, who already fund infrastructure through income and gas taxes.
The Crown corporation, which holds a monopoly over vehicle insurance in Manitoba, should stick to the business of providing coverage at the lowest cost possible.
Road construction and maintenance is the job of public treasuries, not vehicle insurers. Federal, provincial and municipal income taxes and gas levies fund the design, construction and maintenance of roads and the signage, and signalling intended to reduce risk and protect people and property. Indeed, a $35 increase to vehicle registration fees as of July 1 is expected to raise $17 million, all of which the NDP government has said will go to infrastructure. MPI's proposal would simply impose another form of taxation upon ratepayers.
MPI president Marilyn McLaren says the Crown corporation is intent on using its revenues carefully, solely to improve safety and reduce accidents, and that she is sure Manitobans will support the effort once MPI's "pure insurance role" is made clear to them. In effect, she is saying ratepayers should trust that MPI's board has their best interests at heart, that it knows best how to protect their rates.
Manitobans know better than that. They have seen MPI repeatedly called out for its excessive hoarding of surplus revenues by its rate regulator, the Public Utilities Board, which in the last 11 years has ordered or triggered almost $600 million in rebates and successive rate cuts from burgeoning reserves. This while MPI spends on funding police efforts to cut vehicle thefts and intoxicated driving.
Ratepayers are justified in their scrutiny of MPI's use of their premiums because is not the first time MPI has been distracted from its core business: A bid in 2000 to divert $20 million to universities to help repair crumbling buildings was scratched after public protest, resulting in an enlarged rebate in 2000.
It is fantasy that a vehicle insurer's "minority" contribution to roadworks can have noticeable impact on the factors that contribute to claims. The efforts of the most dogged traffic engineers, design staff and municipal road sanding trucks have some influence over the practical causes of vehicle accidents, most obviously rooted in human behaviour and driver error.
In that, MPI has a robust advertising program about road conditions and risky behaviour that lead to collisions and injury. Its most effective hammer, however, is the steep increases to insurance premiums and licence fees that come with frequent claims in which drivers are at fault.
Ratepayers can understand the direct link between claims and driving records to the cost of their insurance and licence fees. It would be difficult, indeed, for MPI to prove any association between "minority" infrastructure expenditures and accident claims, which clearly rise and fall with good and bad weather.
Manitobans cannot choose who insures their vehicles. That alone is good reason for MPI to stick tightly to is core mandate of providing insurance at a rate justified by risk and claims data and sound financial management.