Tories accused of playing politics with MPI

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Manitoba New Democrats have accused the Tory government of using an external review of Manitoba Public Insurance as political cover for a potential rate hike, arguing customers should know before the fall election if their Autopac bill will increase.

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Hey there, time traveller!
This article was published 06/04/2023 (928 days ago), so information in it may no longer be current.

Manitoba New Democrats have accused the Tory government of using an external review of Manitoba Public Insurance as political cover for a potential rate hike, arguing customers should know before the fall election if their Autopac bill will increase.

In question period Thursday, MPI critic MLA Matt Wiebe challenged the government to reassure ratepayers their costs won’t spike in the wake of an organizational review at the Crown corporation.

“Instead of taking accountability, the government is now trying to buy time with a nine-month review, a review that just so happens to be complete after election day,” Wiebe said. “It’s clear the PCs desperately want to buy time and to shift blame.”

MIKAELA MACKENZIE / FREE PRESS FILES
                                “We are taking the initiative to ensure that we bring MPI into the 21st century,” Wharton said. “Our government will definitely not put ratepayers at risk.”

MIKAELA MACKENZIE / FREE PRESS FILES

“We are taking the initiative to ensure that we bring MPI into the 21st century,” Wharton said. “Our government will definitely not put ratepayers at risk.”

Justice Minister Kelvin Goertzen has ordered an independent review of MPI, citing concerns identified by the government and the Public Utilities Board regarding the corporation’s management of Project Nova, investment and revenue projections, corporate expenditures, and more.

Project Nova is MPI’s technology modernization initiative which will eventually allow customers to access basic services online. Its cost has nearly tripled to $290 million since it was launched.

Economic Development Minister Jeff Wharton responded on behalf of Goertzen, who was not in the house. The former Crown services minister said the NDP had 17 years to make necessary improvements to information technology at MPI when the party was in government.

“We are taking the initiative to ensure that we bring MPI into the 21st century,” Wharton said. “Our government will definitely not put ratepayers at risk.”

The ministerial directive released Thursday prohibits MPI from making “material changes” to its operations, including changes to the staffing complement and management positions while the review is underway.

It also prohibits the corporation from requesting a rate change — either up or down — in its next submission to the Public Utilities Board. The findings of the review are to be completed on or before Dec. 31. The election is scheduled for Oct. 3.

MPI is expected to file its 2024 general rate application with the independent regulator early this summer.

In January, the PUB approved a 1.54 per cent rate increase for the average driver in 2023-24, effective April 1. Under MPI’s initial application, ratepayers would have paid an average of 5.54 per cent more in premiums on renewal.

Significant increases to operating expenses at MPI, driven in part by staffing, factored into the PUB’s decision. The corporation had planned to increase the number of full-time equivalent positions on its payroll by 14.6 per cent in 2023-24, to 2,348 from 2,048.

However, the government requested the corporation revise its hiring plans to receive budget approval. The anticipated revision prompted the Consumers Association of Canada-Manitoba to ask the PUB to vary its order and to consider reduced staffing expenses and the effect on ratepayers.

The matter is set to be heard as part of the 2024 rate application hearings. The government has confirmed the ministerial directive will not interfere with the proceedings, the rate application will move ahead as scheduled, and the PUB can still rule on rates.

However, the CAC-Manitoba said it worries the restrictions on MPI will make the process more challenging for the PUB.

“It will have to make a judgment on just and reasonable rates without the advice of MPI. The public interest is best served when the PUB can hear both from MPI and the consumers it exists to serve,” said Byron Williams, legal counsel for CAC-Manitoba.

“There are hundreds of thousands of vehicle owners who are good drivers who continue to pay too much for basic auto insurance.”

Speaking to the Free Press this week, MPI chief executive officer Eric Herbelin said the ministerial directive should not interrupt the rollout of Project Nova and is not expected to significantly affect plans for the general rate application, even with the prohibition on rate change requests.

“That probably, pretty much, aligns with the direction that we were going in to anyway, so I don’t see that as being overly concerning,” Herbelin said.

On Thursday, Wiebe repeated his calls that a standing committee meeting on Crown corporations be held and for Herbelin and MPI board chair Michael Sullivan to take questions from members of the Manitoba Legislative Assembly.

Wiebe said Manitobans are being denied answers while the review is underway.

“It’s really tying the hands of everybody and it’s just now a political tool that’s being used to push this out past an election,” he said. “If it’s something that we want to get to the bottom of, why isn’t it being undertaken now, and why isn’t being undertaken with some expediency.”

Manitoba Liberal Leader Dougald Lamont described the situation at the corporation as “political interference with MPI coming back to bite the PCs.”

He backed Wiebe’s calls for a standing committee meeting to be scheduled.

“We would all be better off if they just ripped off the Band-Aid, started dealing with these things properly and openly and then they might actually have a chance at re-election,” Lamont said.

On Thursday, Sullivan issued a statement saying the corporation’s directors consider the review “an opportunity to better understand how MPI can further enhance the products and services it delivers and ensure the correct structures are in place to enable the delivery of improved customer experiences.”

Sullivan was not made available for an interview.

“The board of directors will support management as they fully co-operate with this review and will help facilitate the direction laid out by government in its directive,” the statement concluded.

danielle.dasilva@freepress.mb.ca

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