EN FR

MPI Brouhaha

Author: Victor Vrsnik 2000/11/12
The NDP mistook Manitoba Public Insurance for a Mexican piñata, replete with surpluses galore. After a few whacks from the provincial government and the MPI Board, the crown corp. nearly split open at the seams, ready to shower $20 million of motorists' premiums on Manitoba universities. Little did they know the piñata would become a lightening rod for political protest.

Premier Doer and company finally did the right thing and ordered MPI to return the $20 million tax grab back to Manitoba motorists.

Despite having been sandbagged by taxpayer protests, the NDP have not perished the idea of raiding crown reserves in the future.

First of all, the $20 million raid from MPI profits was an admission of guilt that Manitoba motorists are paying $20 million more than they should in auto insurance. The money itself was the smoking gun.

If MPI had enough in premiums to cover its claims, why did it propose to overcharge motorists

More to the point, why does it continue to have a monopoly in Manitoba The latest round of political meddling in an arms length crown corp. is the best reason to privatize MPI and open up competition in the auto insurance industry. The provincial government makes a convincing case that it can't be trusted with our insurance money.

Such an abuse of trust would unlikely occur in the private sector insurance industry. Competition keeps business honest.

If a CEO or a Board of a private insurance company frittered away $20 million in profits, heads would roll. Shareholders wouldn't put up with that kind of tomfoolery.

But in the hazy world of government monopolies, positions and decisions are usually insulted from reality and shareholder (i.e. taxpayer) accountability.

The last time I checked MPI's mandate was auto insurance not universities. The crown corp. was formed to provide effective auto insurance for Manitoba motorists at a fair rate. Taking insurance money from motorists to cover government operating costs is stealth taxation. The morbid result would have been artificially high insurance rates.

Equally offensive is how the decision was made. The proper place to settle spending priorities is in the Legislature where expenditures are debated at the committee level and voted upon in the budget.

The $20 million tax grab was hatched in a closed-door meeting between government-appointed directors of MPI and the Minister responsible Becky Barrett. Only after the protest snowballed did the government finally come to its sense.

In a perfect world, the MPI scheme would have come off without a hitch. Manitobans would eventually acclimatize themselves to the idea of using MPI as a cash cow for government operations.

It wouldn't be long before the NDP declare open season on other crown corps like Manitoba Hydro and Centra Gas. Income taxes or the PST would never see another increase because the money would come from your other pocket - the one that pays the utility bills. Mercifully it hasn't happened - not yet.

I can hear the Premier now, "rats, foiled again by those pesky taxpayers."

A Note for our Readers:

Is Canada Off Track?

Canada has problems. You see them at gas station. You see them at the grocery store. You see them on your taxes.

Is anyone listening to you to find out where you think Canada’s off track and what you think we could do to make things better?

You can tell us what you think by filling out the survey

Join now to get the Taxpayer newsletter

Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

Join now to get the Taxpayer newsletter

Hey, it’s Franco.

Did you know that you can get the inside scoop right from my notebook each week? I’ll share hilarious and infuriating stories the media usually misses with you every week so you can hold politicians accountable.

You can sign up for the Taxpayer Update Newsletter now

Looks good!
Please enter a valid email address

We take data security and privacy seriously. Your information will be kept safe.

<