MPI ratepayers on hook for ex-VP’s commuting costs from Ontario By: Danielle Da Silva Posted: 6:22 PM CDT Tuesday, Jun. 6, 2023

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This article was published 06/06/2023 (1140 days ago), so information in it may no longer be current.

Autopac customers paid $19,000 for the chief information and technology officer of Manitoba Public Insurance — who has since quit —to commute to Winnipeg from his home in Ontario over the past eight months.

MPI board chair Ward Keith said Siddhartha Parti resigned as a vice-president with the Crown corporation rather than move to Manitoba, as requested by the board, as part of his employment with the publicly owned auto insurer.

“I had significant concerns about an executive member and officer of a Manitoba Crown corporation residing outside the province,” Keith said during a briefing with reporters on MPI’s operations at its downtown Winnipeg headquarters Tuesday.

As first reported by the Free Press, Parti resigned effective June 2.

Keith said the former vice-president’s travel costs were charged back to MPI under an arrangement approved by former chief executive officer Eric Herbelin, who was fired with cause on May 21 following an internal investigation into his “work-related conduct.”

Herbelin took the top job at Manitoba Public Insurance in early 2021 and Parti was hired that spring as the corporation pursued the largest information technology modernization effort in its history, known as Project Nova.

The $290-million project will allow customers to make collision claims, process licence renewals and receive other basic services online when it’s completed in the 2025-26 fiscal year.

Nova was initially estimated to cost $100 million and take three years to complete, in 2019. Cost overruns and delays have been blamed on incomplete advice from consultants hired to prepare the initial business case and necessary changes to successfully roll out the program.

According to MPI, Parti initially moved to Manitoba after he was hired in May 2021 but relocated to Ontario in October 2022.

Since then, the corporation spent $19,021 on his travel expenses, which included flights, accommodations, and other expenses incurred during travel to and from Manitoba. Other business-related trips are also included in that figure.

Keith called the arrangement unacceptable and said no other officers of the corporation currently reside outside of Manitoba. Just seven of the more than 2,000 employees on its payroll live elsewhere, he said.

MPI is pursuing a hybrid work arrangement for its local employees which would require them to return to the office for part of their work week.

“None of these folks are in executive positions and none of them are officers of the company and they are all working in very, very specialized actuarial and IT fields,” Keith said. “These remote work arrangements — this is clearly the exception.”

The board chair said MPI is not trying to recover any executive travel expenses. He pinned responsibility for the decision to cover the former vice-president’s travel expenses on Herbelin.

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Last month, the Free Press reported MPI’s total executive travel expenses for the fiscal year ending March 2023 exceeded $88,000 — four times what was spent on travel in 2018-19 prior to COVID-19 pandemic travel restrictions.

Herbelin, meanwhile, spent 38 business days, or the equivalent of 7 1/2 weeks, travelling for the corporation.

Keith said he could not comment on whether the former MPI boss’s time away from the province was necessary and confirmed Herbelin resided full-time in Manitoba.

Since he was appointed to the board in May, Keith said he has instructed the corporation’s executive management to be “completely focused on financial prudence.”

“We need to look at ways to maintain and contain our costs,” he said.

MPI will submit its 2024-25 general rate application to the Public Utilities Board on June 15 and will request no change to Autopac base rates, as ordered by the Progressive Conservative government in April.

However, Keith said the corporation will submit the actuarial indicated change for basic insurance program to the independent rate setting authority, which MPI has forecast to be in the range of a 0.1 per cent increase and 0.15 per cent decrease.

“The corporation really is in a strong financial position, overall, across its lines of business,” Keith said.

The application will contain changes to the driver safety rating program in keeping with the PUB’s decision on MPI’s 2023-24 rate application. The average driver had their insurance rates increase 1.54 per cent this year.

Nova, meanwhile, remains within the project’s stated scope and its $290 million as it moves into the next phase, Keith said, noting he does not share concerns about mission creep for the project. As of Tuesday, the project’s $60-million contingency fund had been virtually untouched, he said.

“We need to look at ways to maintain and contain our costs.”–MPI board chair Ward Keith

MPI is laying the groundwork needed to launch online vehicle registration and licensing in 2024 and will have a better idea of the exact timeline and costs to migrate those services to its website this fall, Keith said.

A new consultant will be hired to provide governance and oversight of the project, as recommended by the PUB, within the next two weeks, he said.

The corporation has ended its relationship with global consultant McKinsey and Co. after it awarded the firm two untendered contracts valued at over $12 million to assist with the rollout of Nova.

Keith said McKinsey is not in the running for the new governance contract and MPI continues to process outstanding invoices from the firm against work performed.

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MPI intends to award a contract to conduct a government-ordered organizational review within the next two weeks.

The two contracts are expected to be covered by Nova’s approximately $3-million governance and advisory budget.

On Tuesday, the NDP repeated its accusation that the government has mismanaged MPI at the expense of ratepayers.

“We don’t need an internal organizational review to see (Justice Minister Kelvin Goertzen) failed to hold MPI’s leadership accountable or represent the best interest of ratepayers,” an unnamed party spokesperson said in a statement. “We need a public committee to force the government to be transparent.”

Goertzen, minister responsible for MPI, did not return a request for comment.

danielle.dasilva@freepress.mb.ca