The lobby group that represents the province's insurance brokers has received more than $2 million in operating subsidies from Manitoba Public Insurance since 2011, the Free Press has learned.
The Insurance Brokers Association of Manitoba receives a $250,000 annual subsidy, payable at the beginning of every year.
Earlier this year, MPI served notice it would discontinue the subsidy. It also sought to tie strings to its 2019 payment, which it delayed for months. Ultimately, the payment went through after the Pallister government replaced its own hand-picked MPI board chair, who had been critical of the subsidy.
In a letter to the association, dated Feb. 1, obtained by the Free Press, the Crown corporation said the sponsorship agreement "reflects poorly on both our organizations."
In a letter to IBAM chief executive officer Grant Wainikka, MPI vice-president of customer service and chief operating officer Curtis Wennberg wrote the agreement "does not provide practical specificity on what the $250,000 is to be used for."
Although brokers were to report annually on how they used the money, they never did so until MPI requested a written report last fall. MPI acknowledged in its letter it had not previously requested such reports in the past.
It was apparent from the February letter MPI was dissatisfied with IBAM's report.
"We as leaders have to demonstrate that this (subsidy) agreement passes our own and our customers' 'sniff test,'" Wennberg wrote. "When one takes an honest assessment of key deliverables that were to be produced as a result of the sponsorship agreement this past year, the only conclusion is that the product was unsatisfactory."
IBAM and MPI have been at loggerheads over the corporation's desire to allow customers to purchase insurance and driver's licences online.
IBAM fears this could lead to greatly reduced commissions for brokers. It has insisted brokers control all online sales, a position — the Free Press has reported — that appears to have support within the Pallister government.
Premier Brian Pallister has since denied the government has issued any directives to MPI on the online sales issue.
Citing documents and correspondence obtained by the provincial NDP, the Free Press has also reported the government pressed MPI last fall to extend a remuneration agreement with private brokers the corporation felt was too rich.
The IBAM subsidy agreement comes to light in a new batch of documents obtained through freedom of information laws and passed on to the Free Press.
"Today, MPI's executive and board would not enter into a sponsorship agreement, with any party, that does not have clearly specified deliverables related to achieving MPI's core business interests." – MPI vice-president of customer service and chief operating officer Curtis Wennberg
MPI's February letter to IBAM notes the leadership of both organizations had changed since the subsidy was initiated. The latest three-year deal expires this year.
"Today, MPI's executive and board would not enter into a sponsorship agreement, with any party, that does not have clearly specified deliverables related to achieving MPI's core business interests," Wennberg wrote.
He reminded IBAM that MPI customers were paying for the subsidy, and he included a link to a Free Press article, dated a week earlier, that reported on the fact MPI would be slashing funding to its community support program by nearly 50 per cent.
Wennberg said the subsidy to IBAM would "not be defendable to the PUB (Public Utilities Board, which sets Autopac rates) or customers if (it were) revealed."
In its report to MPI, IBAM said it had used the funds over the years for professional development, including the education and training of brokers. It also used the money "to review challenges and opportunities in service delivery and technology from a broker standpoint."
It said the money supported "various networking and educational events" and was used to review and analyze "broker- and customer-impacting policies and agreements."
In an email Wednesday to the Free Press, Wainikka said IBAM provides several educational and professional development programs that enhance broker knowledge of auto insurance. "Historically, I believe there have been some joint advertising/branding arrangements between MPI and IBAM, as well."
In a statement Wednesday, MPI confirmed it would not renew the sponsorship agreement.
According to documents obtained by the Free Press, MPI had suggested the bulk of the 2019 subsidy be used to work on a future service delivery strategy for customers. It recommended involving third parties to help in providing feedback from ratepayers.
However, by the end of March, after the provincial cabinet installed a new board chairman (Mike Sullivan, who replaced Brent VanKoughnet) the Crown corporation paid the final installment of the subsidy without any strings attached.
Pallister said Wednesday he only learned recently of the annual payment to IBAM. He said the government has eliminated "a lot of the handout programs" it inherited from the previous NDP administration.
"We're not big on subsidies," he said.
NDP Leader Wab Kinew said the government's decision to replace an MPI board chair who had questioned the broker organization subsidy shows its priorities are misplaced.
"The Pallister government signed off on cuts that MPI was giving to (community) groups... but then when the board chair was looking at getting rid of this subsidy (to IBAM), the government intervened," he said.
— with files from Dylan Robertson
Larry Kusch didn’t know what he wanted to do with his life until he attended a high school newspaper editor’s workshop in Regina in the summer of 1969 and listened to a university student speak glowingly about the journalism program at Carleton University in Ottawa.