Truth ditched in long-running Project Nova drama

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This article was published 25/10/2023 (739 days ago), so information in it may no longer be current.

In parliamentary language, it appears Eric Herbelin, the former chief executive officer of Manitoba Public Insurance, was “a stranger to the truth.”

Let’s go back to April.

Herbelin (at that point still CEO of the Crown auto insurer) was involved in a brief but intense public relations campaign to defend himself from allegations he allowed Project Nova — a huge information technology modernization project — to run completely off the rails.

MPI’s new online insurance portal and information management system was originally forecast to come in at just over $100 million. Two years later, the total cost of the project had ballooned to $290 million, with rumours the price tag would go up by additional hundreds of millions of dollars.

When confronted with increasing evidence Nova was headed for more trouble, Herbelin was unwavering and unequivocal, assuring the public the beleaguered project would not be subjected to any more delays or cost increases.

“We are doing our job,” Herbelin said in an interview with the Free Press. “We are doing the right things for Manitobans, both in terms of running the business and transforming the corporation to making sure that it continues to perform in the future.”

Testimony this week at the Public Utilities Board, which is taking a long and hard look at MPI operations and rates, suggests Herbelin’s statements were misleading at best and deliberately dishonest at worst.

Scott Greenlay, an insurance industry consultant hired by the Consumers Coalition (an umbrella group that intervenes at PUB hearings), testified Project Nova appeared to be neither on schedule nor on budget and had “overwhelmed MPI with complexity, capability and capacity challenges, affecting MPI’s staff, ability to deliver and its financial position.”

Greenlay concluded the project should be paused immediately and for the foreseeable future to avoid significant additional costs.

“The scope of Nova is vast. Its complexity is overwhelming and MPI’s capacity to manage such a large initiative is understandably questionable. To continue on the current course, especially given indicators of system problems, will likely lead to additional cost overruns and questionable value to ratepayers.”

Herbelin would not last long after his April public relations campaign.

With evidence of mismanagement mounting, the PC government ordered an external review of MPI operations. Herbelin was fired in late May.

Although he may be gone, his legacy will be felt for years.

MPI is desperately short of executive leaders and expertise at the top, wobbling in its effort to complete Nova and locked in a strike with 1,700 of its employees.

In many ways, you can look at the two-month-old labour action and see Herbelin’s fingerprints. The then-CEO’s decision to give himself and other non-unionized staff retention and performance bonuses — while front-line staff suffered through a wage freeze — is an aggravating factor.

Add in Greenlay’s pointed criticism and troubling questions arise about what appears to be a lack of oversight at a government-owned insurance company.

Those questions are why the new NDP government wasted little time in gutting the MPI board, replacing all Tory appointees but one (Diane Roussin, a community leader and member of Skownan First Nation).

When he signed the order in council Oct. 20 to replace the board, Premier Wab Kinew said he had no idea about the testimony scheduled for PUB the following week. However, in Opposition, the NDP was fully aware there was a disconnect between what Herbelin was saying and what was actually going on.

Throughout the spring, the NDP hammered the PC government over Free Press reports detailing problems with Nova and decisions by Herbelin to give himself raises while also spending an inordinate amount of time away from Winnipeg on vacation and business travel.

History will show the Tory government did not take action to investigate until after the Free Press stories began to pile up. That alone raises questions about whether the former government was remiss in its oversight of MPI.

Crown entities such as MPI legally operate at arm’s length from government; cabinet ministers can direct Crowns to take specific actions but only by public directive. Still, all governments have a political accountability for problems at Crowns.

Then-justice minister Kelvin Goertzen, who was also responsible for MPI, did eventually order an external review of MPI operations and issued several public warnings to dial back hiring plans and keep Nova within budget.

However, Goertzen also continued to express a general confidence Herbelin and the Tory-appointed board had things under control.

As testimony this week clearly shows, however, things were much worse than Herbelin was admitting.

Was the then-CEO misleading Goertzen or were the Tories concealing the truth in the lead-up to a provincial election?

We know one thing for certain: Herbelin was not just a stranger to the truth; he knew the truth and deliberately kept it from Manitobans.

dan.lett@winnipegfreepress.com