Hey there, time traveller!
This article was published 31/3/2011 (2124 days ago), so information in it may no longer be current.
The Public Utilities Board has hiked a planned 10 per cent rebate to Autopac ratepayers to an astounding 45 per cent of premiums paid-- triggering an average $450 payout to vehicle registrants this spring. The order came from a special hearing called by the rate regulator that was taken by surprise March 18 when the Selinger government announced the Crown corporation was holding way too much cash.
Andrew Swan, minister responsible for MPI, tried to paint it as a bonus for all Manitobans -- if MPI were a private company, only shareholders would get the windfall, he said. That's a scandalous interpretation of what has happened.
The history of MPI's rate applications shows excessive surpluses have been a recurring theme. The monopoly vehicle insurer has been ordered to rebate cash to ratepayers five times since 2000. Rates have been cut six times. The largest previous rebate was 16.6 per cent -- in 2000, a 10 per cent rebate was enlarged after public outrage scratched MPI's plans to donate $20 million to universities, with the NDP government's blessing.
Ratepayers see these repeat rebates for what they are: Since 2000, they have been charged $600 million in excess premiums. Repeatedly, the Crown corporation fought to keep most of that cash in its too-rich reserves. Having been chastised year after year by the PUB, president Marilyn McLaren now sees the wisdom in admitting that this money belongs to Autopac ratepayers.
Last year, MPI told the PUB it wanted to rebate $90 million to ratepayers, as a result of lower claims costs, which the regulator reduced to $70 million. Two weeks ago, Mr. Swan made this a political windfall, announcing a request for a second rebate of $250 million would go to the PUB later this year. But the PUB demanded a hearing now and on Thursday said the combined $320 million would be sent out in a single rebate this spring.
The $250-million additional payout results from a 2005 actuarial review that found MPI overestimated the reserves needed to pay personal injury claims -- the injured recovered faster or died earlier than expected. New projections were tested over the next five years.
But MPI's record, overall, is reason for Manitobans to eye its financial management with suspicion. The timing of Mr. Swan's involvement ought to be treated equally suspiciously. The government's crass attempt to gain politically from an issue that should have caused it discomfort lays bare its own self-interest. Typically, MPI announces in summer what its annual rate applications will be to the PUB. But campaign advertising laws will kick in about then for the fall election, and that would have barred the government from joining in the announcement.
Manitobans deserve an external audit of the Crown corporation's finances, dating back a decade. Diligent scrutiny and vigorous objections of special-interest groups through that period have kept pressure on the PUB to speak for ratepayers.
Ratepayers have got a lot of their money back over the years. Whether it was enough ought to be answered by independent actuaries picking through MPI's accounts with a fine-tooth comb. If Premier Greg Selinger does not see the value in this, Conservative Leader Hugh McFadyen should promise to order it and Manitobans can vote on the issue Oct. 4.