Manitoba government orders external review of MPI as costs rise
MPI ordered to not propose any rate changes or change operations while review is underway
The Manitoba government has ordered an external organizational review of its Crown-owned auto insurance provider after a sharp jump in the cost of technology upgrades and a steep rise in projected staffing levels.
Kelvin Goertzen, the minister responsible for Manitoba Public Insurance, said the review was also prompted by other factors including untendered contracts.
"It wasn't one thing. It was all of these things that led me to believe that this organizational review would be important." Goertzen said Monday.
The highest-profile trouble at MPI has been an overhaul of its core information technology systems, called Project Nova. The projected cost has nearly tripled in three years from its original $106-million price tag.
Goertzen said last year the corporation did not realize the scope of the work needed to make the new technology secure.
WATCH | Manitoba Legislature Report: Costs for Project Nova soar to $290M:
Recently, the corporation submitted plans to increase its staffing by 420 people, or 21 per cent, from the level before the COVID-19 pandemic. Much of the new staff would be linked to Project Nova.
That prompted a caution from the Public Utilities Board, the province's independent regulator. The board said in January that the hiring seemed imprudent and Project Nova was lacking in management control.
The board ordered the corporation to submit updated projections and discuss budget details with the board. At the same time, the board approved a much lower increase in driver insurance premiums than MPI had sought.
MPI did not comment in detail on Goertzen's decision.
"As MPI has not yet received an official directive from government, the corporation cannot offer commentary on the details of the review at this time," spokesperson Kristy Rydz wrote in an email.
"MPI will fully co-operate with the review and commits to providing information in a forthcoming manner as needed."
There was no decision on who is to conduct the review, which Goertzen said should be complete by the end of the year.
In addition, the government appointed a member of the Progressive Conservative caucus to MPI's board of directors. Ron Schuler, who once served as minister responsible for the corporation, has been given the task.
The Opposition New Democrats called Monday for the government to have MPI officials appear before the legislature's standing committee on Crown corporations so that the officials could be questioned in a public forum.
"We don't even know at this point the scope of the problem," said Matt Wiebe, the NDP's critic for MPI.
"We don't know what the organizational issues may be. Having an opportunity to sit down with the CEO, with senior leadership, and ask those questions at a Crown corporations (committee) meeting could be one way that we could get to the bottom of this."