The tribunal that provides oversight of the province’s public utilities has approved a small decrease for Manitoba Public Insurance ratepayers and ruled a new provincial regulation to be illegitimate.
The Public Utilities Board approved MPI’s request for a 0.6 per cent decrease on basic insurance premiums Tuesday.
MPI spokesman Brian Smiley said the Crown corporation had initially asked for a rate increase of 0.1 per cent, but based on interest rates and the company’s financial position, amended its application to reflect an overall 0.6 per cent decrease.
"There was a positive movement in the interest rates, which does have a major impact, and so we saw some very favourable financial returns," Smiley said.
An estimated 610,000 ratepayers in Manitoba will see a drop in their insurance premium, an average $10 annually, Smiley said. The overall rate decrease is the first MPI has requested since 2012, and takes effect March 1.
"We’re obviously pleased that they’ve accepted our ruling of a minus-0.6 per cent," Smiley said. "I think it’s very noteworthy that MPI and Manitobans are receiving a decrease compared to other jurisdictions in Canada, which are seeing double-digit increases."
Motorcyclists and taxi cabs, however, will see rates increase at 5.1 per cent, and 10.4 per cent, respectively.
The overall decrease follows MPI’s annual general rate application to the PUB, made in June. During the application assessment period, the board also evaluates the corporation’s basic stabilization reserve and typically orders MPI to keep a certain amount of cash on hand to buffer the public from unexpected rate increases caused by one-off events.
The provincial government issued an order in cabinet in April, directing MPI to hold an amount equal to 100 per cent of its minimum capital test in reserve, and restricted the use of any surplus reserve funds.
The validity of the reserves regulation order was challenged by the Consumers’ Association of Canada during PUB hearings, with lawyers arguing the regulation interfered with the PUB’s independent rate approval authority.
The PUB agreed, and said the regulation, without statutory authority, restricted the rate-setting jurisdiction of the board.
"If the board's powers are to be circumscribed or limited, the authority to do so must be set out in statute, thus the regulation is found to be invalid," the PUB said in a statement.
A representative of the Consumers’ Association of Canada was not immediately available for comment.
Crown Services Minister Jeff Wharton said his department will be reviewing the decision.
"The part that I am aware of is, again, Manitoba ratepayers are going to recognize a 0.6 per cent decrease in their insurance, in basic insurance. So that’s good news, and I’m certainly looking forward to getting briefed on the remainder of the PUB’s order as of today," Wharton said.
Smiley said the PUB’s decision won’t impact how the corporation maintains its reserves.
"It will be business per usual. We are going to be following the government regulation as prescribed by government," he said. "This rate decrease, and potentially future rate decreases, was built under this transparent framework."
Danielle Da Silva
Danielle Da Silva is a general assignment reporter.
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