MPI forks over $65M for driver and vehicle licensing

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This article was published 30/03/2022 (903 days ago), so information in it may no longer be current.

Manitoba Public Insurance has diverted additional funds to cover costs at driver and vehicle licensing.

In a statement Thursday, the Crown corporation said it had recently transferred $65 million to fill Drivers and Vehicles Act funding shortfalls, bringing its total in the controversial manoeuvre to $125 million — well above the $113 million initially forecast.

Opposition party members decried the move, blaming the Tory government for driving MPI to such action.

“Instead of lowering of rates by 10 per cent, during an affordability crisis, the PCs are taking money from ratepayers to pay their own bills,” said Mintu Sandhu, NDP critic for MPI.

“What’s worse, they tried to hide this from Manitobans and threatened to sue journalists for reporting the facts. The PUB also criticized the government for hiding the information about their plan that is costing Manitobans money,” the Maples MLA said.

“Government should be making life more affordable, not less.”

In October, the Free Press revealed the plan to divert $113 million in excess revenue from Autopac’s “extension” or optional line of insurance. A subsequent column criticizing that decision resulted in a lawyer acting for MPI and its chief executive officer and president Eric Herbelin sending a letter to the newspaper, giving notice they intended to sue for defamation unless a retraction and apology were published.

The first $60 million was transferred in March 2021.

On Thursday, vice-president and chief financial officer Mark Giesbrecht reiterated the additional $65 million comes from MPI’s competitive side — including rental insurance and third-party liability coverage — and not from its compulsory basic insurance.

“The transfer is in full compliance with all applicable statutes and regulations, and Manitobans can be assured that the corporation will remain financially strong across all of its lines of business in its delivery of services,” he said in a statement.

No matter, Liberal Leader Dugald Lamont said, the shortfall at driver and vehicle licensing should not be paid by insurance ratepayers.

“The PCs are using MPI in two ways. First, as a cash cow to hand out (Autopac) rebate cheques; and second, to require it to pay what the government should pay for at driver and vehicle licensing,” Lamont said.

“This is not good for MPI or for all the people MPI serves. This is a political decision foisted on MPI.”

Byron Williams, a lawyer who has represented the Consumers Association of Canada (Manitoba) at MPI hearings, said Thursday his clients “are gravely concerned that Manitoba Public Insurance is using captive automobile insurance ratepayers’ money to subsidize government purposes.”

“From our clients’ perspective, this runs contrary to the initial intent in establishing the MPI monopoly that captive automobile insurance ratepayers’ money would be directed exclusively to automobile insurance purposes,” he said.

Williams said it is also why a section of the MPI Corporation Act specifically states no profits earned by the vehicle insurance corporation can be “taken, used or appropriated by the government of Manitoba for any purposes whatever.”

During a committee hearing in January, Herbelin said the money transferred to driver and vehicle licensing annually since 2004 prevented those funds from being rebated to customers.

Herbelin said MPI is working with the government to get possible reimbursement on future costs so it could break even.

On Thursday, a spokesman for Kelvin Goertzen, minister responsible for MPI, said “the Manitoba government and MPI are working together to establish a permanent funding formula for DVA, to eliminate the need for these ad hoc transfers.”

kevin.rollason@freepress.mb.ca