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Winnipeg Free Press
10-07-2025
- Business
- Winnipeg Free Press
Project Nova probe to be ‘one of the largest audits we've ever done': AG
The province's auditor general says he expects the upcoming probe of Manitoba Public Insurance's failed Project Nova to offer lessons for future implementations of computer systems at Crown corporations. Tyson Shtykalo says while he can't predict what revelations the expected year-long audit will root out, nor what recommendations will come from the results, he does know one thing. 'This is probably one of the largest audits we've ever done, in terms of public interest,' Shtykalo said on Thursday. Submitted Manitoba auditor general Tyson Shtykalo. 'The goal is, when we're done, there will be a bunch of recommendations and lessons learned applicable to other projects of MPI and other Crown corporations … We'll be reporting findings to the government and MPI. Everything will be vetted and shared and then a public report will be prepared. 'There has been a lot of interest in this project. Now, we'll have to do our job and starting digging.' The Auditor General Act gives the office the same power to subpoena people as a commissioner during a public inquiry. 'The auditor general has extensive and broad powers and we can draw on them as needed,' Shtykalo said, declining to comment on who he will ask to speak with auditors. It means former CEO Eric Herbelin — on whose watch Project Nova was initiated, began to see its cost estimates balloon and implementation time pushed back before he was fired by the MPI board in 2023 — could be compelled to speak as part of the audit. Peggy Barker, a member of the board of the Consumers' Association of Canada (Manitoba), the organization that originally asked in May for the auditor general to take on the file, said its representatives are already scheduled to meet with Shtykalo next week. 'We're really pleased both (Finance) Minister (Adrian) Sala and the Auditor General have taken note of this,' Barker said. 'We are definitely really pleased the auditor general is becoming involved in this. 'They have listened to us.' News of the audit also had NDP government and opposition parties members take shots at each other Thursday. Matt Wiebe, minister responsible for MPI, said the audit 'is about getting answers for Manitobans.' 'We know Nova was allowed to get out of control by the previous (Progressive Conservative) government. We have an idea of some of the mismanagement which led to the issues with Nova, but there's a lot more we know Manitobans need to know and that's why we've asked the auditor to step in. Manitobans deserve answers.' Wiebe said he, too, expects the audit's recommendations will help government in future. 'I would suggest, across government, when we're talking about big IT projects, it is important to understand what went wrong.' Wayne Balcaen, Tory critic for MPI, said the province's neglect of MPI's outdated computer system actually began under the former Doer and Selinger NDP governments. Sundays Kevin Rollason's Sunday newsletter honouring and remembering lives well-lived in Manitoba. While Balcaen admits Project Nova was launched by a Tory government, 'the probe, or the look by the auditor general, is something that I completely agree with. There's absolutely nothing to hide here,' he said. 'Project Nova was recommended in about 2020, with the idea to bring MPI into the 21st century. It had suffered stagnation during about 15 years at that time, neglect by any new technology or of any technological needs, by the NDP government that was in charge.' Balcaen said it made sense then and it makes sense now for MPI to have an up-to-date computer system. 'We're having people giving their financial information and records information … People really needed to have trust in the system and MPI needed to bring their services up to what's expected (in tech) in 2025.' Kevin RollasonReporter Kevin Rollason is a general assignment reporter at the Free Press. He graduated from Western University with a Masters of Journalism in 1985 and worked at the Winnipeg Sun until 1988, when he joined the Free Press. He has served as the Free Press's city hall and law courts reporter and has won several awards, including a National Newspaper Award. Read more about Kevin. Every piece of reporting Kevin 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.
Winnipeg Free Press
09-07-2025
- Business
- Winnipeg Free Press
Auditor general to review MPI's failed Project Nova
The province's auditor general has agreed to take a deep dive into Manitoba Public Insurance's technology infrastructure boondoggle Project Nova. Auditor general Tyson Shtykalo was asked last month by NDP Finance Minister Adrien Sala to investigate the now-scuttled project, which was originally estimated to cost $107 million but by the time MPI terminated it in March had grown to an estimated price tag of $435 million — of which $165 million had already been spent. Satvir Jatana, MPI president and CEO, said in a statement on Wednesday: 'We have recently received news that the auditor general has accepted the request and will be moving forward with the audit. We are committed to working alongside the auditor and his team to complete this work.' MIKAELA MACKENZIE / FREE PRESS FILES The province's auditor general has agreed to investigate Manitoba Public Insurance's Project Nova. Shtykalo could not be reached for comment. In May, the Consumers' Association of Canada (Manitoba) wrote to the auditor general asking for such an audit. The letter said it was needed 'to prevent repetition of past mistakes by MPI and other public institutions and to complement the Public Utilities Board's protection of Manitobans' interests in setting auto insurance rates.' Last month, Sala wrote to the auditor general, saying an internal government review had found a number of 'concerns' about MPI's management of Nova. 'A review, by Treasury Board secretariat, identified concerns about the selection of the software and the system integrator, terms of the vendor contract and irregularities in contract practices,' Sala wrote. 'In addition, MPI is expected to continue paying software licences that will not be used in the future years.' Project Nova was announced in 2020 by the then-Tory government as a major computer upgrade by the Crown auto insurer, enabling both its Autopac and commercial customers to go online to renew or amend insurance policies and driver's licences. As well, the system was to be designed to speed up processing of damage claims by linking together MPI and repair shops. Then-MPI CEO Eric Herbelin said at the time it would cost $107 million and be implemented within three years. Sundays Kevin Rollason's Sunday newsletter honouring and remembering lives well-lived in Manitoba. Two years later, the estimated cost of the project had ballooned to $290 million and the implementation time was pushed to five years. By 2023, Herbelin had been fired by the MPI board after an internal performance review. His replacement, Jatana, later not only terminated all future Nova work (because the total estimated cost was now $435 million) but in early 2025 also said MPI was temporarily disabling part of what it had already implemented — the computer program used for special risk-extension (SRE) renewals and new policies for commercial customers — while going back to a former paper-based system. 'Despite our significant investments in time and resources, especially in recent months, to move this work forward, we have not seen the improvements that we anticipated,' Jatana said in an email sent in April to staff members which was obtained by the Free Press. 'It has become clear that attempting to fix the system while working in it is not in the best interests of our teams, our broker partners or our SRE customers.' Kevin RollasonReporter Kevin Rollason is a general assignment reporter at the Free Press. He graduated from Western University with a Masters of Journalism in 1985 and worked at the Winnipeg Sun until 1988, when he joined the Free Press. He has served as the Free Press's city hall and law courts reporter and has won several awards, including a National Newspaper Award. Read more about Kevin. Every piece of reporting Kevin 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.
Winnipeg Free Press
27-06-2025
- Automotive
- Winnipeg Free Press
On the heels of Project Nova disaster, MPI rate application raises eyebrows
Opinion Is it tough love for bad drivers, or another back-door tax to help pay for Manitoba Public Insurance Corporation's catastrophic, nine-figure technology boondoggle known to the outside world as Project Nova? It's a question that will be difficult to answer for drivers and other informed observers even after studying MPI's latest rate application to the Public Utilities Board, which was made public this week. On the surface, it all seems so reasonable: a 2.07 per cent hike to basic insurance which, if approved, would kick in April 1, 2026, and add roughly $21 a year to the average private vehicle Autopac policy. But dig below the surface and another story appears. Tucked into the fine print of the rate application is a plan to bump the deductible for the basic Autopac coverage to $1,000 from the current level of $750. Autopac customers still have the option to pay a higher premium to get deductibles as low as $200 per claim. However, those drivers who can only afford basic level coverage are going to get hammered by what is in effect a 33 per cent hike on their share of the overall claims cost. That is, in this economy, unreasonable and unacceptable. MPI said the higher deductible was needed to mitigate rising claims costs, stabilize rates and compensate for recent inflation. Without the deductible increase, MPI said it would have had to ask for a five per cent general rate hike. However, this is also about MPI trying to recover some of the wasted money it poured into Project Nova, its ill-fated technology overhaul. After more than three years and a nearly $200-million investment, MPI was forced to abandon the project earlier this year without having achieved any of its major goals. Despite the obvious impact of Nova, it is quite telling that in an 18-page rate application backgrounder, the doomed project was not mentioned once. That is something MPI chief executive officer Satvir Jatana and her board of directors might want to explain. Nova continues to represent one of the most significant sources of pressure on Autopac rates and leaving it out cannot be some sort of inadvertent omission. The same goes for concerns about MPI's operating costs. Intervenors at the PUB have for many years demanded MPI trim its administrative overhead, which went up precipitously during the tenure of former CEO Eric Herbelin, who was fired in May 2023 after an internal performance review. Instead of owning up to its own mismanagement, MPI has decided to use inflation as the crutch for the deductible decision. Inflation has absolutely and dramatically increased the cost of both purchasing, replacing and repairing vehicles. However, inflation is an issue that is largely disappearing into the crown insurer's rear-view mirror. To quantify the impact of inflation, MPI offered calculations based on a five-year average for the increase in vehicle values and repair costs. However, the 2026 rate application seems to be entirely reliant on economic data that is already more than a year old. Inflation started going down in mid-2024 and currently sits at roughly 1.7 per cent, which is well below the peaks during the worst years of the COVID-19 crisis and more in line with pre-pandemic levels. Given this is a rate application taking effect in 2026, it's time to stop leaning on the inflation rates that hit hard in 2021 through to the early months of 2024. It is fair to say that the entire insurance industry has been ravaged by inflation. It's also probably fair to say that insurance companies are likely still trying to recoup some losses from the most volatile years. However, MPI's narrative for this rate application is so carefully crafted, it comes dangerously close to misleading. This is the second year in a row MPI has submitted a rate application that is problematic. Last year, MPI tried to get by with a two per cent rate hike despite the fact that its own actuarial calculations showed it needed a five per cent bump. The PUB ordered them to increase rates and chastised MPI for failing to reconcile the rate ask with its own calculations. This year, the rate application is nothing less than a disingenuous attempt to cover up their own incompetence by taking more money out of the pockets of basic policy owners who have the temerity to file a claim. The NDP government has essentially sat by idly and allowed MPI management to colour outside the lines in ways that don't necessarily serve the public in two consecutive rate applications. In this most recent application, MPI is increasing costs to basic Autopac customers who are already less able to absorb hundreds of dollars in increased deductible fees. Premier Wab Kinew made affordability a key policy of his first year-and-a-half in office. It will be interesting to see if he and his cabinet flag the deductible issue as an unwarranted punishment to basic level Autopac drivers. Not every issue at a crown corporation needs to become a political liability for the government of the day. But this one very well could be if it is ignored any further. 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.
Winnipeg Free Press
10-06-2025
- Business
- Winnipeg Free Press
Unresolved questions require independent commission
Opinion Manitoba's ethics commissioner, Jeffrey Schnoor, recently released a report in which he concluded that former Progressive Conservative premier Heather Stefanson and two of her former cabinet ministers violated the province's conflict-of-interest laws after losing the 2023 election. They were accused of breaching the rules in an effort to approve the controversial Sio Silica sand mine during the short 'caretaker period' before the new NDP government was sworn in. Schnoor found that their actions 'lacked ethical and constitutional legitimacy,' but failed to identify what motivated them to act so recklessly. He says he found no evidence that any of the them acted for personal benefit but, if that wasn't the reason, why did they do it? MIKAELA MACKENZIE / WINNIPEG FREE PRESS Then-premier Heather Stefanson and finance minister Cliff Cullen announce the 2023 budget to media. Columnist Deveryn Ross says it's time to have an independent commission examine PC spending decisions. That's just one of many serious questions still swirling around the former government. Last week, Finance Minister Adrien Sala asked auditor general Tyson Shtykalo to investigate what went wrong with Manitoba Public Insurance's Project Nova technology project. MPI abandoned the program two months ago after a review estimated that total project costs had soared from $107 million to $435 million. The project was initially justified as an upgrade of MPI's digital capabilities, which would enable Manitobans to renew or amend their auto insurance and driver's licences online. It would also provide 'seamless connectivity' between MPI and repair shops. That was the hope back in 2020. Five years later, however, MPI Minister Matt Wiebe describes the program as a 'waste of taxpayers' money.' Where did all that money go, and why did MPI keep spending it? In April, the Kinew government asked Shtykalo to investigate an (almost) $100-million taxpayer-funded contract to build daycare facilities throughout the province. It alleges that the project, in which the province partnered with a company named JohnQ Public Inc., 'may not have followed normal provincial or municipal procurement practices.' Specifically, the government claims the contract enabled the previous government to funnel $2.8 million to Boom Done Next, a company owned by Marni Larkin. Larkin was the campaign manager for the Tories' 2023 doomed re-election campaign. How does a company earn almost $3 million on such a project? Two weeks ago, a CBC report revealed that the previous government gave an $18 million grant to JohnQ Public days before the 2023 provincial election was called. There was no public announcement of the funding, which was reportedly for a large land purchase in the RM of Ritchot to develop a proposed 'Winnipeg regional rail port.' Why the secrecy and rushed timing of the grant? In February, at a debate between PC Party leadership candidates Obby Khan and Wally Daudrich, Kahn alleged that Daudrich was the party's top donor for 12 years and accused him of receiving 'licensing permits up north under the table' from the previous government. Daudrich's company, Lazy Bear Lodge and Expeditions, first received approvals to operate off-road vehicle tours near Churchill in 2004. The total number of permits for all tour operators in the coastal plain of the Churchill Wildlife Management Area was limited to 18 between 1984 and 2020. Five years ago, however, the former Tory government reportedly approved two additional permits, both of which were awarded to Lazy Bear. Did Khan have inside knowledge that permits were improperly issued to Daudrich's company, or was his accusation simply bluster in the heat of the moment? There is no evidence that anybody acted improperly in these instances, let alone illegally, but there are many questions and few answers. Weekday Evenings Today's must-read stories and a roundup of the day's headlines, delivered every evening. The Kinew government and many Manitobans are counting on the auditor general to expose and explain the questionable conduct of the previous government, but their hopes may be overly optimistic. That's because Shtykalo has significant discretion as to which matters he chooses to investigate, and his office has limited resources. Even if he decides to review the issues referred to him, more than a year could pass before any reports are issued. That's neither good enough nor fast enough. The better, more efficient course of action is for the government to appoint an independent commissioner to investigate the many unresolved issues, and to give that commissioner the power to compel testimony and gather evidence if necessary. Manitobans deserve to know the truth. An independent commission is the best path to those answers. Deveryn Ross is a political commentator living in Brandon. deverynrossletters@ X: @deverynross
Winnipeg Free Press
06-06-2025
- Business
- Winnipeg Free Press
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 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.
