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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
25-06-2025
- Automotive
- Winnipeg Free Press
MPI applies for 2.07 per cent rate hike
Manitoba drivers will pay more to insure vehicles next year if a proposed rate hike is approved by the Public Utilities Board. Manitoba Public Insurance has requested a 2.07 per cent increase to its overall basic insurance rates starting on April 1, 2026. MPI says if PUB approves the increase, the average insurance cost of a private passenger vehicle would increase by $21 a year. MIKAELA MACKENZIE / FREE PRESS FILES Satvir Jatana, CEO for Manitoba Public Insurance which has requested a 2.07 per cent increase to its overall basic insurance rates starting April, 2026. 'While the market remains volatile, and the cost of claims continues to rise, this rate request truly emphasizes MPI's commitment to keep auto insurance affordable for all Manitobans,' MPI president and CEO Satvir Jatana said in a statement on Wednesday. 'We are taking decisive action to manage these pressures as we continue to deliver value for our customers across the province.' However, based on what has happened in recent years, it's not certain whether the board will approve the MPI rate increase. Last year, MPI proposed a rate increase of three per cent, but that was rejected by the PUB, which imposed a 5.7 per cent increase. The PUB said the change was needed because even MPI's own calculations concluded it required a 6.77 per cent increase. While MPI requested no change to overall rates in 2023, the PUB ordered a five per cent increase. The PUB said last year it had reduced rates overall by more than 15 per cent during the previous five years while also approving rebates of more than $400 million in 2021 and 2022. Jatana said MPI is scrapping its $750 deductible and adding a $1,000 deductible, which will cost less. 'We're pleased to give customers the flexibility to maximize the affordability of their mandatory coverage by choosing a higher deductible, or to keep their existing coverage by selecting a lower deductible at an affordable price,' she said. 'Furthermore, a proposed overall increase of two per cent to our extension line of business, which includes products like rental vehicle insurance, additional third-party liability insurance and lower deductibles for basic insurance, will keep all products affordable.' Sundays Kevin Rollason's Sunday newsletter honouring and remembering lives well-lived in Manitoba. MPI is creating a new merit level for good drivers. Jatana said the new merit level of 20, under the Driver Safety Rating, will mean a savings of 53 per cent on the cost of automobile and driver insurance for the safest drivers. 'This is great news for Manitoba's safest drivers and we are proud that this fair and simple system allows us to recognize their contribution towards safer roads through incentives like discounts on insurance premiums,' she said. If approved later this year by the PUB, drivers would start paying the new rate anytime between April 1, 2026 and March 31, 2027, depending on when their insurance needs to be renewed. 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.
CTV News
05-06-2025
- Automotive
- CTV News
MPI shuts down failed IT project as costs drive up
Manitoba Public Insurance says it is closing Project Nova, an initiative to update the technology for insurance and driver licensing, including adding online services. Nova was announced in 2019, with a budget of $85 million. To date, MPI says the Crown corporation has spent $164 million on the project. It decided to pull the plug when estimates showed the costs would increase to $435.7 million. On top of that, none of this included a fourth and final phase. MPI said NOVA was plagued with delays, ineffective governance, procurement problems, and significant changes in leadership. It says the pandemic and the 2023 strike also impacted plans. Satvir Jatana, president & CEO of MPI, said the aspirations never met the Crown corporation's capacity or capabilities. 'Project timelines were unrealistic,' said Jatana. 'It is clear Nova has experienced significant missteps, and I would even be so bold to say failures.' In early 2023, the then CEO of MPI was replaced after the former PC government ordered a review. The current NDP government has now asked the auditor general to probe Nova. MPI said it will still move ahead to replace the outdated technology but is promising 'a more pragmatic approach,' including breaking down plans into smaller projects to better predict costs and timelines.
CBC
05-06-2025
- Business
- CBC
MPI pulls plug on costly IT overhaul Project Nova, cites 'missteps' and 'failures'
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.
CBC
27-01-2025
- Business
- CBC
Manitoba's public auto insurer restarting much-maligned technology overhaul after pausing it
Manitoba Public Insurance is forging ahead with its much-maligned technology overhaul project that significantly overshot cost projections, saying it paused the project last year to get a better understanding of how to deliver it. CEO Satvir Jatana told a legislative committee hearing Thursday the Crown corporation needed to take stock of Project Nova, an IT renewal project launched in 2019 that's intended to let customers and brokers complete more of their auto insurance business online. "We took a pause. We didn't want to continue because we have not been successful, I'll say, thus far," she said. "We did not want to blindly spend additional funds without truly understanding what it is that we're building, what are the needs and how are we going to deliver this." Project Nova has faced major cost overruns, with a budget that rose from $86 million to nearly $290 million over a few years. MPI has spent $162 million on Project Nova so far, Jatana said. "I can't sit here and say that we have realized the full value of that [money], so hence why we needed to pause," she said, in response to questioning from MLA Wayne Balcaen, the Progressive Conservative critic for MPI. "We needed, with this board, with this leadership team, to ensure that we don't just continue to spend ratepayer dollars without delivering value, and that's what we've been focused on." 'Lots of defects': CEO The replacement of the public insurer's outdated information technology systems was supposed to be completed this spring, but only two of the four phases are finished, and one of those phases had "lots of defects," Jatana said. She didn't reveal a timeline or cost estimate for the remaining two phases, which consists of "the majority of the delivery," Jatana said. An MPI spokesperson said Project Nova is in the midst of "a detailed planning phase that will help us understand the requirements that must be in place before we move forward with implementing any further changes." She promised MPI will reveal more details in the coming months. Asked Friday when the pause took effect, MPI wouldn't give an answer, but Jatana said at a committee hearing last March the corporation needed to "rethink [and] re-plan" the IT overhaul. She also said Project Nova's next steps would be released that spring, but that didn't happen. The first phase of the project involved shifting trucking and commercial insurance customers to an online-based platform, but it's been dogged by problems since its 2023 release. Jatana said MPI stopped migrating customers over to the new system several months later to address defects. With half of commercial customers currently using the new system and the rest continuing to use the old system, all customers are continuing to be served properly, she said. The second phase of Project Nova, which shifted the vehicle registration system for trucks and buses travelling outside Canada online, was released last summer. After the pause to Project Nova, work to fix the bugs plaguing its first phase has continued, and Jatana said significant progress has been made in the last five to six months. Frustration with lack of progress The limited progress on Project Nova stems from the corporation enduring a 10-week strike in late 2023, the subsequent work to clear the backlog, and multiple leadership changes, said Jatana, who was named CEO early last year. She said there's frustration internally, especially among staff who have worked diligently on the project. "I can never say enough to them, 'This is not you. This is the situation we put you in.'" Balcaen, the Tory MPI critic, told the committee he's glad to hear Jatana say she doesn't want to "overcommit and under-deliver." That's a trend "I've seen with this [NDP] government," he said. However, he wasn't happy Jatana said she couldn't speak further about Project Nova's future steps without permission from MPI's board, whose chairperson, Carmen Nedohin, told the committee the plan for the project still needs to be finalized. Matt Wiebe, the NDP minister in charge of the MPI file, used part of his final address to the committee to allege Balcaen was "really starting to acknowledge the mess that was left by the previous government." The sharp jump in costs for Project Nova and the corporation's attempt to hire a few hundred more staff were among the reasons the former Progressive Conservative government ordered an external review of the corporation in 2023. That audit found the insurer was top heavy and contending with instability from various leadership changes, and that Project Nova "dominates and consumes" discretionary resources. Jatana has previously said Project Nova cannot be abandoned because MPI must upgrade its outdated technologies.
