MPI steers toward rate reduction, another rebate
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Hey there, time traveller!
This article was published 27/06/2021 (1180 days ago), so information in it may no longer be current.
For the third year in a row, Manitoba Public Insurance wants to lower premiums and, for the third time in the COVID-19 pandemic, it wants to send customers a rebate cheque.
On Monday, the Crown corporation filed a general rate application with the Public Utilities Board, for an average rate decrease of 2.8 per cent next year.
With a 3.6 per cent rise in Canada’s Consumer Price Index on a year-over-year basis in May, the new president and chief executive officer of Manitoba’s publicly-owned auto insurer explained how MPI would be able to lower Autopac rates.
“This is a sustainable decrease over time, not the one-off, and that is due to our fiscal prudence and the responsibility that we put in managing the corporation in a fiscally responsible way,” said Eric Herbelin, who took the helm at MPI in January.
“We are definitely cautious in terms of how we are all managing our expense accounts and how much we spend and that, combined, is translating to 2.8 per cent rate decrease indication,” said the Swiss-born CEO who is now a Manitoba resident and homeowner.
“Some of that is due to changes in the interest rates,” Herbelin said. “We have a large amount of reserves that are invested into various sorts of investments, mainly government bonds, and interest rates are going up and down year-over-year.
“We have a large amount of reserves that are invested into various sorts of investments, mainly government bonds, and interest rates are going up and down year-over-year.”
– MPI CEO Eric Herbelin
“But the interest rates are back where they were before the beginning of the pandemic, so in line with our long-term expectations. So we are very confident about that dedicated rate decrease.”
Last year, MPI applied for an 8.8 per cent rate decrease.
The Public Utilities Board, an independent administrative tribunal, will hold a general rate application hearing for MPI’s 2.8 per cent decrease in October, and issue its orders in December. If approved, the proposed rates take effect April 1, 2022, but, with staggered renewal dates, some vehicle owners won’t pay their new rates until March 31, 2023.
Later this year, MPI plans to file an application with the board for a $155-million rebate that would be returned to customers early next year as a one-time payment of $150 to $200 (on average a 15 per cent rate reduction).
“The rate rebate, in itself, is essentially due to the fact that there was less collisions on the roads and less claims. The reason we return that in the form of a rebate is that it’s a one-off.”
– MPI CEO Eric Herbelin
If approved, it will be third rebate cheque issued to customers since the pandemic started (one in May 2020, one in January).
“The rate rebate, in itself, is essentially due to the fact that there was less collisions on the roads and less claims,” said Herbelin. “The reason we return that in the form of a rebate is that it’s a one-off.
“It’s not something that we can build into rates over time but it really is relating to this prior fiscal year, and something that we want to return to Manitobans as soon as possible in the most effective way.”
Collision repair talks
Manitoba Liberal Leader Dougald Lamont is questioning if MPI wanting to decrease rates and offer customers another rebate will be done at the expense of companies providing collision repairs.
“There is no question that MPI is running up massive profits at the expense of stakeholders and independent Manitoba businesses,” Lamont said Monday. “That includes the collision industry, where no one has seen a raise in four years and total compensation is some of the lowest in Canada.”
Manitoba Liberal Leader Dougald Lamont is questioning if MPI wanting to decrease rates and offer customers another rebate will be done at the expense of companies providing collision repairs.
“There is no question that MPI is running up massive profits at the expense of stakeholders and independent Manitoba businesses,” Lamont said Monday. “That includes the collision industry, where no one has seen a raise in four years and total compensation is some of the lowest in Canada.”
The Liberal leader voiced his concern after the public auto insurer announced it had filed a general rate application with the Public Utilities Board seeking to decrease rates 2.8 per cent next year. The Crown corporation also plans to apply to offer another rebate to customers — the third since the COVID-19 pandemic started.
A two-year agreement MPI had with associations representing auto repair shops lapsed in April.
MPI president and chief executive Eric Herbelin said earlier the repair industry is asking for a 60 per cent increase over current compensation rates that would, if granted, add more than 10 per cent to the cost of Manitobans’ Autopac premiums.
On Monday, Herbelin said MPI is “absolutely committed” to working with the repair trade.
“As it stands, we have an arbitration that is ongoing, but we’re also conducting discussions between MPI and the associations to try and find a resolution,” he said.
“And I think that we will find a resolution soon and both members of the repair trade, as well as Manitobans, can feel comfortable about both sides coming to terms and continuing to enjoy a productive relationship in the years to come.”
— Carol Sanders
Crown Services Minister Jeff Wharton said Monday the proposed rebate is “welcome news” to Manitobans financially impacted by the pandemic.
MPI’s general rate application to the PUB includes nearly 2,200 pages of documents, reports and data outlining its financial situation and forecast posted on the board’s website.
It’s a reminder of “how crucial the Public Utilities Board is to keeping utility bills affordable for Manitoba families,” the NDP critic for MPI said Monday.
“The PUB is an independent body whose job is to lower rates when it makes sense, like when a Crown is in surplus, and to force the Progressive Conservative government to be upfront about its plans for our publicly-owned crowns,” MLA Mintu Sandhu said in an email.
“It is exactly this kind of public oversight that will be lost when the PCs push through Bill 35.”
The proposed Public Utilities Ratepayer Protection and Regulatory Reform Act would remove — at least temporarily — the board’s ability to set electricity rates. Bill 35 would have that responsibility rest with the provincial cabinet until April 2024, after which the PUB would approve rates at five-year intervals.
carol.sanders@freepress.mb.ca
Carol Sanders
Legislature reporter
After 20 years of reporting on the growing diversity of people calling Manitoba home, Carol moved to the legislature bureau in early 2020.
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