MPI pulls plug on costly IT overhaul Project Nova, cites 'missteps' and 'failures'

CBC

2 days ago

Manitoba Public Insurance is cutting its losses and killing Project Nova, the IT overhaul project that has bled money since it was first launched in 2019, and the province has requested an audit of "the decisions and management" around it.
"It is clear that Nova has experienced significant missteps, and I would be even so bold to say failures," MPI president and CEO Satvir Jatana said at a Thursday news conference.
"It has not delivered the value for money that was originally planned and promised, and we did not make this decision lightly. However, staying on this path would not be responsible nor in the best interest of Manitobans."
Project Nova was supposed to replace MPI's outdated technology with a new modern platform to provide insurance and driver licensing services and more online options for customers.
The initial budget was $86 million, but within a few years it soared to $290 million.
The MPI board and CEO who were decision makers on Project Nova are no longer in place. Jatana was hired in February 2024 and shortly after put a pause on Nova to get a better understanding of it.
In January 2025, she noted $162 million had already been spent, but only two of Nova's four phases had been completed.
At Nova's peak, close to 200 staff and close to 300 consultants worked on it. Now it's closer to 50 and 50, Jatana said.
Consultant contracts ended while staff were shifted to other projects — there were no layoffs, she said.
"There was ineffective governance — critical business requirements were overlooked, significant changes in MPI leadership, a global pandemic and a historic strike. These factors have led to delays and cost overruns with many starts and stops," she said Thursday, recapping what the review had found.
"It is evident that our aspiration did not meet our capacity, nor our capabilities. Simply put, the project timelines were unrealistic."
Finance minister wants audit
The MPI announcement comes a day after Minister of Finance Adrien Sala sent a letter to Auditor General Tyson Shtykalo, requesting an audit of the decisions and management of Project Nova.
If the project were to be completed, the updated cost projection was $452 million, according to Sala's letter, a copy of which was obtained by CBC.
The two completed phases only constitute about 30 per cent of the project's scope, and only $46.5 million of value has been derived from it, according to the letter.
An organizational review of MPI by the Treasury Board Secretariat, conducted in 2023 with a final report released in January 2025, identified issues including concerns around the selection of the Nova software, terms of the vendor contract and irregularities in contract practices, according to Sala's letter, which says MPI will be paying for software licences for years, despite the software not being used.
According to Jatana, MPI is locked into contracts for about $88 million over the next seven years. Of that, $68 million is considered "no value." However, MPI is in discussions with vendors and "hopeful and optimistic" the contracts can be renegotiated to mitigate those costs, she said.
Given the losses, there is value in a review that will inform future technology acquisitions, accountability and governance, even though the board and management behind Project Nova have been replaced, Sala's letter said.
Jatana said the corporation will co-operate fully with any audit process and looks forward to the results.
Aging technology still needs to be replaced: CEO
While reviewing the past mistakes will help identify things to avoid in the future, the need to replace MPI's aging technology still exists, Jatana said.
She also said the previous board and management failed to create a path forward for the corporation's other IT needs, which are equally outdated.
The new board and management have studied what the next phases of Nova were expected to provide, and have done a thorough review of all other IT needs "to create a rolling five-year IT road map," she said.
"This has provided a true picture of all the technological needs and allows the corporation to prioritize work into bite-sized pieces" to be done at a responsible pace, Jatana said.
That approach also aligns with industry best practices, she said, and will include regular reporting intervals for accountability. MPI will break down the replacement needs for its systems into stand-alone projects with "reasonable timelines" of 12 to 24 months, said Jatana.
A close-out report for Project Nova is coming, and will identify how much money was spent on work that has no value and will need to be written off, she said.
Jatana insisted the wastage would have no impact on future insurance rates.
"We have taken a hard look at what went wrong and we have implemented strategic changes to get us back on track," she said.
The five-year roadmap is well thought out by a leadership team that is listening to experts, said MPI board chair Carmen Nedohin.
One of the most important pieces is the governance behind it, which comes with clear decision-making accountability, she said.