MPI vows to dive deep into ‘failure'
Manitoba Public Insurance made public Thursday its decision to pull the plug on Project Nova, a $164-million 'failure' intended to modernize outdated business and information technology systems.
'We were trying to fix the plane as we're flying the plane,' the Crown corporation's CEO Satvir Jatana said.
'At this point, we need to ground the plane.'
The Free Press reported in March the Crown corporation had informed the Public Utilities Board of a revised cost estimate pegged at $435 million — 50 per cent more than previously thought — to complete the ill-fated plan, and its decision to abandon the project.
On Wednesday, Manitoba Finance Minister Adrien Sala asked auditor general Tyson Shtykalo to conduct a special audit of Project Nova.
'We need to get off the plane, we need to fix the plane before we can safely bring the passengers back on,' Jatana said, while promising that plans for replacing outdated technology at MPI will be done right going forward, thanks to improved governance, adhering to industry best practices that allow for flexibility and focusing on business priorities while maintaining fiscal prudence.
'That's the process we're taking right now and I am optimistic that we will have a solution, but it is not a solution that can be delivered next month,' she said told a news conference, flanked by MPI board chair Carmen Nedohin and Christian Dandeneau, chair of the MPI board's technology committee.
MPI said it would fully co-operate with an audit and 'looks forward to how the results can shape our work moving forward.'
Shtykalo is 'considering' the audit request on the project that began in 2019 under the previous Tory provincial government and launched in early 2023 before being officially shelved Thursday.
'I am currently reviewing the request and will seek additional information before determining what action, if any, my office will take,' Shtykalo, who was not available for an interview, said in an email.
Justice Minister Matt Wiebe, who is responsible for MPI, echoed the need for a 'closer look.'
'This is about accountability for taxpayers and a significant amount of taxpayers dollars were misspent in this case,' he said Thursday.
University of Winnipeg political scientist Malcolm Bird said there's been too much interference in the operations of Crown corporations by both Progressive Conservative and NDP governments.
The government's call for an audit sounds politically motivated, he said.
Updating IT systems is 'really, really, really hard to do anywhere — whether it's in a public-sector or private-sector area,' said Bird, who studies Crown corporations.
'You have all these systems in place working and then you want to bring in new systems,' he said. 'You have to build them and then, somehow, magically shut the one down and turn the new one on, without it being a disaster.'
Jatana said Project Nova 'was never set up for success' and MPI knows what went wrong.
'There was ineffective governance, critical business requirements were overlooked, significant changes in MPI leadership, a global pandemic and an historic strike,' she said. 'These factors have led to delays and cost overruns with many starts and stops to the project.'
In May 2023, the MPI board fired CEO Eric Herbelin following an internal investigation into his work conduct. The Swiss national with a private insurance background was hired during the COVID-19 pandemic in 2021 while MPI was pursuing the largest technology modernization in its history.
In 2023, unionized MPI workers went on strike for the first time and were off the job for 10 weeks.
An organizational review by Ernst & Young last year, ordered in 2023 by the PC government over concerns about Project Nova and financial reporting, found a litany of problems — from too many managers, to friction between divisions and significant turnover between May 2021 and June 2023.
High-level organizational changes caused instability and impacted the sustainability of ongoing programs, alongside a lack of solid strategic, financial and human resources planning, the report found.
Meanwhile, the projected cost of Project Nova climbed from $85 million in 2019 to $107 million to $290 million to more than $435 million, announced by Jatana in March.
Targets for Autopac and commercial customers being able to renew or amend insurance policies and driver's licences online and providing connections between MPI and repair shops to speed up claims processing were missed.
'Simply put, the project timelines were unrealistic. It is clear that Project Nova has experienced significant missteps and… failures,' Jatana said. 'It has not delivered the value for money that was originally planned and promised.'
She said the $164 million spent to date on Project Nova did not impact MPI customers' rates. She said the public auto insurer is locked into contracts with vendors for the project and committed to paying them roughly $88 million over the next seven years, $68 million of which would be considered of no value.
'We are hopeful and optimistic that we are in conversations with those vendors that we would be able to renegotiate those contracts and mitigate those costs.'
She said there no job losses or layoffs as a result. At one time, 200 employees and close to 300 consultants were working on the project.
'Right now the numbers are very, very low,' she said, adding fewer than 50 consultants and 50 employees have been moved to 'other initiatives.'
carol.sanders@freepress.mb.ca
Carol SandersLegislature reporter
Carol Sanders is a reporter at the Free Press legislature bureau. The former general assignment reporter and copy editor joined the paper in 1997. Read more about Carol.
Every piece of reporting Carol produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press's tradition, since 1872, of producing reliable independent journalism. Read more about Free Press's history and mandate, and learn how our newsroom operates.
Our newsroom depends on a growing audience of readers to power our journalism. If you are not a paid reader, please consider becoming a subscriber.
Our newsroom depends on its audience of readers to power our journalism. Thank you for your support.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Winnipeg Free Press
18 hours ago
- Winnipeg Free Press
Infrastructure Bank CEO says it's ready to play a role in national-interest projects
CALGARY – The chief executive of the Canada Infrastructure Bank says the Crown corporation is looking forward to playing a role in Ottawa's ambitions to push ahead major projects deemed in the national interest. 'I think we're on the precipice of a really important time for our country,' said Ehren Cory. 'We're just one tool in the tool kit of that. We are far from the only part of the solution, but we're looking forward to playing our part in meeting the challenge that we face as a country.' U.S. President Donald Trump's on-again-off-again tariffs have forced Canada to rethink its relationship with its biggest trading partner and seek out ways to get resources and other goods to global markets. Key themes in this spring's federal election campaign were the creation of 'trade corridors' and other ways to remove the regulatory, legal and political logjams that have for several years prevented big projects from being built. The Liberal government has promised to put a two-year cap on the approval process for key projects. Prime Minister Mark Carney met with premiers in Saskatoon this week to talk over some of the nation-building projects on their wish lists. The infrastructure bank has already been involved in the planning around two contenders Carney rattled off to reporters after the meeting — the Pathways Alliance oilsands carbon capture and storage project in Alberta, and the Grays Bay Port and Road in the central Arctic. Cory said the bank has not yet received any updated direction from its owner, the federal government, since the April 28 election delivered the Liberals back to power with a minority government. 'They set out priorities,' he said. 'We go find deals.' The infrastructure bank, created in 2017 with $35 billion in capital, invests in revenue-generating projects that are deemed to be in the public good, but would have trouble getting off the ground with private-sector money alone. To date, it has made $5 billion in clean power investments and put $1 billion toward Indigenous-led projects. In the coming week, it is set to close its 100th deal. The bank operates at arm's-length from the federal government, which sets out broad priorities. As its stands, its priority sectors include public transit, clean power, green infrastructure, broadband and trade and transportation. Monday Mornings The latest local business news and a lookahead to the coming week. Cory said it's not up to the bank to decide whether new oil pipelines, for example, would be investments worth pursuing. But if they are, he said, the bank is 'a potential tool to doing more of them because they have the classic hallmarks of infrastructure projects.' Like many big infrastructure projects, pipelines require huge upfront investment, have long payback periods and tend to have a lot of uncertainty getting off the ground. 'And that's very hard for the private sector alone to manage and absorb,' Cory said. 'That's the kind of shock absorber that the (infrastructure bank) can be.' This report by The Canadian Press was first published June 5, 2025.
National Observer
18 hours ago
- National Observer
Bill to fast-track projects gets instant pushback from climate groups and First Nations
The federal government's new bill to fast-track projects 'in the national interest' sparked immediate concerns from the Assembly of First Nations and Canada's largest network of labour unions, climate, environmental and faith groups and Indigenous organizations. If it becomes law, the federal government will essentially be able to approve certain projects before federal regulatory processes take place. Environmental and other concerns will no longer be able to stop these projects, but mechanisms will be put in place to mitigate any harms. 'Green-lighting major projects up front, before asking how they would affect communities, is nonsensical,' Alex Cool-Fergus, national policy manager at Climate Action Network Canada said in a press release. 'Bypassing democratic norms under the pretext of a 'crisis' is a tactic as old as time. This government must do better.' Bill C-5 has already prompted the Assembly of First Nations to call an emergency meeting. 'The Assembly of First Nations remains deeply concerned about the lack of time and appropriate process to carry out the Crown's consultation and consent obligations, especially given the potentially massive impact on the rights of First Nations,' AFN National Chief Cindy Woodhouse Nepinak said in a statement. At a press conference Friday afternoon, Prime Minister Mark Carney clarified that the federal government 'will not impose a project on a province.' 'Bypassing democratic norms under the pretext of a 'crisis' is a tactic as old as time," Alex Cool-Fergus, national policy manager at Climate Action Network Canada said of the federal government's new legislation to fast-track major projects. 'We need consensus behind these projects and we need the participation of Indigenous peoples,' Carney said at a press conference on Friday. This week, BC Premier David Eby said he will not support Alberta Premier Danielle Smith's vision of building a new oil pipeline to BC's north coast. Conservative Party Leader Pierre Poilievre said caucus will discuss whether to support the legislation (which also enacts the Free Trade and Labour Mobility in Canada Act, intended to reduce interprovincial trade barriers). Poilievre said it's 'troubling' Carney is giving provinces veto power when Eby has said no to 'the most promising pipeline.' Asked why provinces shouldn't be able to say no, Poilievre said they 'need to start saying 'Yes.'' The bill, tabled in the House of Commons by Intergovernmental Affairs Minister Dominic LeBlanc, would give Ottawa the authority to draw up a list of large projects it wants to prioritize and expedite their federal approval. When a project is deemed in the national interest and added to the list, it will be considered to be conditionally approved from the outset. The project will go through existing review processes such as the federal Impact Assessment Act, but the focus will be on 'how' instead of 'whether' it can be built. The bill sets out several criteria to evaluate whether a project is in the national interest. These criteria include whether a project strengthens Canada's autonomy, resilience and security; provides economic or other benefits to Canada; has a high likelihood of successful execution; advances the interests of Indigenous Peoples; and contributes to clean growth and to Canada's objectives with respect to climate change. In a background press briefing a government official said these are considerations, not a checklist, and other factors can also be considered. What it means for a project to 'contribute to clean growth and to Canada's objectives with respect to climate change' is not defined in the legislation. The cabinet and the governor in council, in consultation with provinces, territories and Indigenous Peoples, will have the discretion to define that, according to a government official. Consultation with Indigenous Peoples would happen before a project is listed. After that, staff in a new federal major projects office will help coordinate the federal review processes that determine what conditions the project must meet. This means public consultation and comment will take place after a project has already received a 'yes.' Projects will have to be at a certain state of readiness to be listed for fast-tracking, a government official explained on background. The process for how proponents can submit projects is separate from the legislation and will require consultation with Indigenous Peoples, provinces and territories. Details will be shared 'over the summer,' the official said. The federal government's goal to get projects through in no more than two years means the clock will start when a project gets listed (approved and designated for fast tracking) and end when the regulatory processes have been completed and conditions set. This goal is political, not legislated. 'Those two years are consulting with Indigenous Peoples understanding impacts on rights, specific measures to accommodate them, understanding specific interactions with the environment," a government official said, adding it takes two years to properly develop the conditions. Responding to the new legislation, Environmental Defence said projects that should be deemed in the national interest include things like a resilient electricity grid with new east-west interties and with access for solar, wind and storage; scaled-up public transportation; building millions of green, energy-efficient and affordable homes and more.
Winnipeg Free Press
18 hours ago
- Winnipeg Free Press
Ignorance far from bliss, PC leader pleads in effort to leave stench of '23 campaign behind
Opinion Obby Khan wants to make it perfectly clear that the Progressive Conservative Party of Manitoba's controversial 2023 election campaign is not an accurate reflection of who he is. Khan, who became PC party leader in late April, said he continues to struggle to explain his role in that campaign, particularly ads and flyers promoting him as the champion of 'parental rights,' a well-established dog whistle for anti-LGBTTQ+ activists in Canada and the United States. When the idea for the advertisements was first brought up, Khan said no one from the central campaign team ever warned him the term 'parental rights' was being used in heavy rotation by anti-LGBTTQ+ activists seeking to remove books from school and public libraries and expunge any reference to sexual orientation or gender in public school settings. MIKE DEAL / FREE PRESS FILES Progressive Conservative Party of Manitoba Leader Obby Khan says he supports the LGBTTQ+ community and would never knowingly promote hatred towards them. 'People will believe me or not believe me on this,' Khan said in an interview on the Niigaan and the Lone Ranger podcast. '(But) I did not know the parental rights was a dog whistle. I was legitimately, like, 'It makes sense, you want to be involved (in your child's education). Let's go, let's go do this.' And then, it was afterwards… that I was made aware of (the meaning). People were talking to me about this and it was kind of like one of those 'a-ha' moments.' Khan said he supports the LGBTTQ+ community and would never knowingly promote hatred towards them. However, he said during the campaign, the parental rights issue was presented to him as a way of pledging support to families struggling to get their children's' education back on track after the worst years of the pandemic. Although he is reluctant to say he was misled by the campaign, Khan did say that he now realizes how divisive the term is and wants to apologize to anyone who thought he was promoting a hateful concept. 'I do believe parents should be involved in their children's lives but it's really sad and unfortunate that we used it in a way to create divide and anger and hurt some people, because that was never my intent. My intent was really about trying to protect all kids. If it has caused some harm to some people, I apologize for that.' Niigaan and the Lone Ranger | Khan said he also had an 'a-ha' moment on the 'stand firm' against the landfill search campaign ads. In fact, he said the first time he learned of the advertisements was when he drove past one on a McGillivray Boulevard digital billboard with his son in the car. 'Seeing the damage that it's done, the divide it's created, and anger… I'll say it again: unequivocal apology to the families and… the entire province of Manitoba.' Khan is not the first Tory to argue the most controversial planks in the 2023 election campaign were kept from candidates until the moment that they were broadcast in advertisements and plastered across digital billboards. However, many of the other candidates from that election have moved on, while others enjoy a political existence that is well away from the spotlight reserved for political leaders. The 2023 campaign is clearly still an albatross for Khan, the lens through which everything he says and does is assessed. For example, Khan had to scramble recently to explain why he did not participate in last Sunday's Winnipeg Pride parade, the annual celebration of LGBTTQ+ culture. Pride organizers said neither Khan nor any of his MLAs signed up as an official entry in the parade; Khan said he personally could not attend because of a conflicting obligation and besides, Pride organizers did not invite anyone from his party to participate. In any other year, with any other leader perhaps, this might not be a big concern. But when the poster boy for an ill-fated parental-rights campaign advertisement does not reach out to the Pride community, it leaves both leader and party open to criticism. Can he rise above the meanness of the 2023 campaign and once again stake out ground near the middle of Manitoba's political spectrum? On the positive side of the equation, he seems wired for the job. Despite a lack of experience in politics — he won a 2022 byelection to replace former Tory premier Brian Pallister in Winnipeg's Fort Whyte riding — he is gregarious and unafraid of wading into a room full of voters. Khan is also used to a certain degree of success in his personal and professional life. Tuesdays A weekly look at politics close to home and around the world. A superstar lineman in the Canadian Football League, Khan spent only eight years in professional football but won folk-hero status here in Winnipeg. After retiring, he became a successful business owner with two different local restaurant chains. As for politics, it goes without saying that his victory in 2023 in Fort Whyte was important for his party; Khan was one of only three Tories to win seats in Winnipeg. He quickly translated his political resilience into a leadership win. Now that he's in charge, Khan said he is looking for ways of getting past the mistakes made during the 2023 campaign. 'For any of the hurt or the damage that's been caused throughout the (campaign), I apologize for that. It was never my intent. My intent is always to work for a better Manitoba, for everyone.' Dan LettColumnist Dan Lett is a columnist for the Free Press, providing opinion and commentary on politics in Winnipeg and beyond. Born and raised in Toronto, Dan joined the Free Press in 1986. Read more about Dan. Dan's columns are built on facts and reactions, but offer his personal views through arguments and analysis. The Free Press' editing team reviews Dan's columns before they are posted online or published in print — part of the our tradition, since 1872, of producing reliable independent journalism. Read more about Free Press's history and mandate, and learn how our newsroom operates. Our newsroom depends on a growing audience of readers to power our journalism. If you are not a paid reader, please consider becoming a subscriber. Our newsroom depends on its audience of readers to power our journalism. Thank you for your support.
