NDP asks auditor general to probe failed IT project at MPI By: Dan Lett Posted: 4:46 PM CDT Wednesday, Jun. 4, 2025

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This article was published 04/06/2025 (404 days ago), so information in it may no longer be current.

The NDP government has asked the provincial auditor general to probe Project Nova, the doomed technology project undertaken by Manitoba Public Insurance.

In a letter to auditor general Tyson Shtykalo, which was obtained by the Free Press, Finance Minister Adrien Sala stated that after spending $165 million on Nova, most of the promised features — including full online access for Autopac customers — remain unfulfilled.

Sala stated in his letter that an internal government review identified a number of “concerns” about MPI’s management of Nova.

“A review by Treasury Board Secretariat identified concerns about the selection of the software and the system integrator, terms of the vendor contract and irregularities in contract practices,” Sala wrote. “In addition, MPI is expected to continue paying software licences that will not be used in the future years.”

If Shtykalo decides to do a deep dive on Nova, he will be examining one of the most costly and controversial projects undertaken by a Crown corporation.

First announced in 2020 at a cost of $107 million, Nova was supposed to allow Autopac and commercial customers to renew or amend insurance policies and driver’s licences online while providing connections between MPI and repair shops to speed up claims processing.

All of these new features, former MPI CEO Eric Herbelin said, would be offered within three years.

However, in less than 24 months the cost of the project had risen to $290 million and the timeline was extended to five years. At the same time, concerns arose about costly untendered management contracts and the hiring of hundreds of additional staff in contravention of a government-wide hiring freeze.

In the spring of 2023, the board of MPI fired Herbelin after an internal performance review.

In March, current CEO Satvir Jatana announced the total price tag to complete Nova had risen to $435 million, or 50 per cent more than the previous estimate. As a result, Jatana said all work on Nova had been terminated. In May, MPI disabled one of the few parts of Nova that had become operational because it wasn’t functioning properly.

Jatana and other senior MPI officials will confirm the audit and discuss its consequences at a media event on Thursday.

In the letter, Sala noted the treasury board review concluded that of the $165 million spent to date, only “$46.5 million of value was derived from the project.” The letter did not elaborate on which parts of Nova were up and running.

The idea of having the auditor general examine Nova was raised last month by the Consumers’ Association of Canada. On May 21, the Manitoba branch of the association wrote to Shtykalo asking that he undertake an audit “to prevent repetition of past mistakes by MPI and other public institutions and to complement the Public Utilities Board’s protection of Manitobans’ interests in setting auto insurance rates.”

The association had previously criticized MPI for using reserve funds normally dedicated to lowering Autopac rates to help pay for Nova cost overruns.

The request for a full audit was made under Section 16 of the Auditor General Act, which states that the auditor general may, by request from the minister of finance or lieutenant governor in council, “examine and audit the accounts of a government organization, recipient of public money or other person or entity that in any way receives, pays or accounts for public money.”

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The act says the auditor general “is not obliged to do so if he or she is of the opinion that it would interfere with the primary responsibilities of the auditor general.”

If an audit is undertaken, findings will be reported to the minister who requested the review and to the minister responsible for “any government organization concerned.” If the auditor finds it to be in the public interest, a report can be submitted to the legislative assembly no later than 14 days after it is provided to the minister responsible for the government entity.

The office of the auditor general not only reviews government financial accounts on an annual basis, it is also empowered to examine the finances and operations of any entity operated and funded by the province. Although unusual, it is not unprecedented for the auditor general to delve into the activities of a government entity or Crown corporation at the request of a government minister or MLA.

In 2021, Shtykalo investigated allegations made by the NDP, which was in opposition at the time, that former premier Brian Pallister had interfered with the management of Manitoba Hydro. However, no report was produced from that probe.

dan.lett@freepress.mb.ca

Dan Lett
Columnist

Dan Lett is a columnist for the Free Press, providing opinion and commentary on politics in Winnipeg and beyond. Born and raised in Toronto, Dan joined the Free Press in 1986.  Read more about Dan.

Dan’s columns are built on facts and reactions, but offer his personal views through arguments and analysis. The Free Press’ editing team reviews Dan’s columns before they are posted online or published in print — part of the our tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.