Manitoba Crown corporation questioned over exceptions to hiring freeze

WINNIPEG – Manitoba Public Insurance is likely to face more questions later this month over a hiring freeze which, it turns out, does not cover most positions at the provincial Crown corporation.

MPI has been under pressure from the Public Utilities Board, the provincial regulator, to look for cost savings as a way to limit increases in driver insurance rates. The corporation has a monopoly on basic vehicle insurance in Manitoba.

Last December, the board cut MPI’s request for a 1.8 per cent rate hike for 2014 to 0.9 per cent and ordered the corporation to outline its efforts to control costs and staffing levels.

When MPI submitted its annual request in June, it asked for a 3.4 per cent increase to take effect in 2015. It also said in papers it submitted that “a hiring freeze has been implemented for an indeterminate period of time.”

The hiring freeze, however, does not apply to most workers.

“The hiring restraint applies to any staff member who does not fall within the definition of a front-line staffer. This definition is: a staff member who has regular, direct contact with customers, or our business partners who directly serve our customers,” MPI spokesman Brian Smiley wrote in an email.

“Sixty per cent of MPI staff fall under the definition as front-line.”

The other 40 per cent of positions aren’t firmly frozen either, but will be “closely reviewed, with managers needing to fully justify why the position needs to be filled,” Smiley wrote.

The issue was first raised at a legislature committee hearing last month by Kelvin Goertzen, MPI critic for the Opposition Progressive Conservatives.

“I don’t think that you can ask for a rate increase without first proving to Manitobans that you are controlling costs within the corporation,” Goertzen said in an interview last week.

The revelation that the hiring freeze does not cover nearly two- thirds of the positions “brings into question whether or not the submission to the Public Utilities Board is actually founded on fact, and whether or not it’s a true representation of what’s happening,” he added.

Manitoba is generally regarded as having one of the lowest auto insurance rates in the country, but the provincial regulator has been warning MPI to keep its expenses down. MPI has said its finances were hit by a spike in accidents last winter — one of the coldest and longest on record.

The utilities board noted last year that staff levels at MPI had jumped 12 per cent in the previous five years. MPI responded with the hiring freeze and by promising to cut about 30 positions within two years.

MPI also told the board in June it had “restricted for an indeterminate period of time” out-of-province travel and conference participation.

The restriction is not an outright ban. Three MPI officials travelled to Colombia recently to attend a conference of the Research Council for Automobile Repairs. MPI represents Canada on the council.

Regulatory hearings on MPI’s request for a rate increase in 2015 are scheduled to resume Oct. 22.

Goertzen said he wants to see proof that MPI is cutting spending.

“I think people are talking a good game that they’re looking to control costs. But when you drill down a little further, that doesn’t seem to be what’s actually happening.”