Auto insurance rates going up by 5.7 per cent PUB rejects MPI’s 3 per cent hike request, board ‘not confident’ amount would be enough to chip away at massive deficit By: Nicole Buffie Posted: 1:55 PM CST Tuesday, Jan. 7, 2025 Last Modified: 6:51 PM CST Tuesday, Jan. 7, 2025 Updates

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The Public Utilities Board has ordered a 5.7 per cent rate increase for vehicle insurance — nearly double the rate sought by Manitoba Public Insurance — blaming the Crown corporation for digging itself into a deep financial hole.

Beginning April 1, rates will increase $50.84 per year ($4.24 per month) for the average passenger vehicle. Exact increases will vary from driver to driver depending on factors including driving record, claims history and place of residence.

In the order, dated Tuesday, the PUB took MPI to task for its failure to consult actuary forecasting in its application.

MPI requested a three per cent increase to driver insurance in its 2025 rate application — well below its actuary’s recommendation that exceeded six per cent.

The PUB found no evidence the three per cent increase would help MPI dig itself out of the $130-million hole it posted in the 2023-24 fiscal year.

“While MPI put forward the proposal that it could return to financial stability within five years, the board is not confident of that based on the evidence adduced at this hearing,” the PUB board wrote in its decision.

During the three-week public hearing in October and November 2024, MPI president and chief executive officer Satvir Jatana said the Crown corporation settled on a three per cent ask based on various circumstances, including maintaining ratepayer affordability.

In its annual report, MPI said its massive deficit was due to a historic hailstorm and 10-week strike in 2023, along with major cost overruns on its IT overhaul, Project Nova.

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Katrine Dilay, a lawyer for the Public Interest Law Centre who represented the Manitoba branch of the Consumers’ Association of Canada during the hearings, said the request was made based on a feeling, not rooted in fact.

“There were some moments where MPI witnesses said that they felt the three per cent was was the right number. From our client’s perspective, that’s not the way to set insurance rates,” Dilay said Tuesday. “This is an evidence-based decision from the PUB and it reflects the cost pressures that MPI faces.”

The Consumers’ Association of Canada advocates for consumer interest in Manitoba through price reviews, participation in regulatory hearings and policy research. Dilay made several recommendations to the PUB at the hearings on behalf of the organization.

“While MPI put forward the proposal that it could return to financial stability within five years, the board is not confident of that based on the evidence adduced at this hearing.”–PUB decision

The board wrote this was the first year MPI sought a rate increase that was lower than its accepted actuarial practice.

On Tuesday, MPI spokesperson Tara Seel echoed Jatana’s rationale for the rate application and that it accepts the board’s various orders, including the 5.7 per cent increase.

The spring increase will follow more than 15 per cent in decreases over the previous five years and several rounds of rebates.

Among dozens of directives and recommendations in the 150-page report, the PUB again asked MPI and the province to work on a long-term funding model for its driver and vehicle licensing program.

The government provides operational funding to MPI for the program but the cash has not kept up with the costs to administer it, forcing the Crown corporation to use other streams of revenue to cover costs.

The PUB has made this recommendation repeatedly over the years.

“There needs to be updated funding agreements so MPI isn’t taking ratepayers’ money and essentially subsidizing taxpayers,” Dilay said. “If a program is supposed to be funded by taxpayers through government, then that’s the way that it should be done.”

Matt Wiebe, minister responsible for MPI, said he was open to the idea and other recommendations put forward in the PUB’s decision to get MPI back on fiscal track.

He said the rate directed by the PUB was in line with “cleaning up the (financial) mess left by the former Progressive Conservative government” while being mindful of ratepayer affordability.

“People are feeling it in their pocketbooks right now and they need to see that MPI is aware of that and is doing everything that they can to keep auto insurance affordable,” he said.

Tory MPI critic Wayne Balcaen blamed the NDP for mismanagement of the Crown corporation.

“While the NDP seems to think the cost-of-living crisis is over, families still struggling paycheque to paycheque know otherwise. Life keeps getting more expensive under the NDP and it’s clear the government has no plan to make things more affordable,” Balcaen said.

To further rein in spending, the PUB ordered MPI to closely monitor its IT costs with regards to the rollout of the third phase of Project Nova, which is to allow ratepayers to buy auto insurance online. MPI was also ordered to provide a final budget for the project and present it to the PUB during next year’s rate application.

MPI initially indicated Project Nova was $16 million over its $224 million budget. The budgeted cost of the project now stands at $290 million, almost three times the original figure.

nicole.buffie@freepress.mb.ca

Nicole Buffie
Multimedia producer

Nicole Buffie is a reporter for the Free Press city desk. Born and bred in Winnipeg, Nicole graduated from Red River College’s Creative Communications program in 2020 and worked as a reporter throughout Manitoba before joining the Free Press newsroom as a multimedia producer in 2023. Read more about Nicole.

Every piece of reporting Nicole produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.