Manitoba’s crown-owned auto insurance company offered more details on Tuesday about recent unrest that has led to the departure of senior executives and a sharp rise in the cost of technology upgrades.
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Ward Keith, who took over as chair of the board of directors of Manitoba Public Insurance this spring following the resignation of his predecessor, explained the departure last week of the director of information and society, Siddharta Party.
Parti lived in Ontario and the company paid for his travel expenses to Manitoba, Keith said.
“Based on an arrangement between this individual and the former CEO, travel costs to and from Manitoba were billed to the company. This is another reason why I found this not to be an acceptable arrangement,” Keith said.
A company official later said Parti received a total of $19,021 in travel expenses over nine months, including commuting and business travel.
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Parti was asked to move to Manitoba, but chose last week to quit instead, Keith added. The Canadian Press could not reach Parti for comment.
This resignation came shortly after the departure of CEO Eric Herbelin. MPI said last month that Herbelin was fired by the board after a review of his conduct at work.
Herbelin did not respond to an interview request. Keith provided a few more details on Tuesday, aside from saying the review covered more than his interactions with employees.
“Based on the results of this investigation, the board met and determined that there was sufficient concern to terminate his employment with cause,” Keith said.
Manitoba Public Insurance has been plagued with questions over the past two years, primarily over a plan called Project Nova, to upgrade its various technology platforms. The project includes plans to allow the public to purchase auto insurance online.
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“Manitobans need to know what’s going on at MPI,” Keith said. “Manitobans need to know what the board and chair of the board expect from management and senior management and they need to be informed of these important initiatives.
The planned cost of the project has increased from $106 million to $290 million. Its timeline has been extended to five years instead of three.
Keith said Tuesday the new price includes $60 million in emergency funds and he is confident the cost of the project is now under control.
“To date, virtually none of these contingencies have been used,” he said.
The company also faced controversy over plans it submitted to hire 420 people – a 21% increase from the workforce before the COVID-19 pandemic. Many new employees would be linked to Project Nova.
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This prompted a warning from the Public Utilities Board, the provincial regulator, in January. The board said the hiring seemed reckless and that Project Nova lacked adequate management control.
There were also questions about untendered contracts. Kelvin Goertzen, the minister responsible for MPI, cited this as one of the reasons he ordered an external review of the company this spring.
This review is expected in December.
In the meantime, MPI is preparing to file its plans for the 2024-25 fiscal year with the Public Utilities Commission. That plan is to include a freeze on its overall fare revenue, although certain categories of motorists may see small increases or decreases, Keith said.
“It does every year,” Keith said. “At this point, I don’t have details on what proportion of vehicle owners will see decreases versus increases, which rate categories will increase and decrease. I expect everything to be made public when the press release is filed next week, as is usually the case. But I just wanted to set expectations.
“Individuals’ rates will always vary based on the jurisdiction they live in, based on their own driving record, based on the cost of claims and insurance usage they are in, and based on the rate overall.”