Manitoba Committee Hansard — 11 April 1979 (Public Utilities Committee, Sitting 2, 31st Legislature, 3rd Session)

31-3-pu2

Manitoba — Debates (Hansard)

Legislative Assembly of Manitoba STANDING COMMITTEE ON PUBLIC UTILITIES AND NATURAL RESOURCES Chairman Mr. Warren Steen Constituency of Crescentwood Wednesday, April 11, 1979 10:00 A.M. Printed by P.N. Crosbie-Queen's Printer for the Province of Manitoba

Hearing Of The Standing Committee On Public Utilities Wednesday, April 11, 1979 ime: 10:00 a.m. THE MANITOBA PUBLIC INSURANCE CORPORATION ACT HAIRMAN: Mr. Warren Steen. THE MANITOBA PUBLIC INSURANCE CORPORATION ACT R. CHAIRMAN: Mr. Pawley. R. HOWARD PAWLEY: I would like to, for just a few moments, explore with Mr. Dutton the rates td structure. lt's my understanding that the rating of various motor vehicles, varies accor ding to e value of that particular car. Is that correct? R. J. 0. DUTTON: Yes, Mr.

Chairman, that's partially true, not entir ely corr ect on the straight tlues. lt has a bearing on the rate of course, the value. R. PAWLEV: I think Mr. Dutton was proceed ing to elaborate on this. R. DUTTON: Well, I think one of the problems we have in rating. You'r e talking about the damage the automobile itself. That's what we're talking about, the damage to the automobile as opposed R. PAWLEY: I'm referring to rating for premium purposes. R. DUTTON: Yes, premium purposes for damage ... that portion of the premium attributed R. PAWLEV: That's correct. R. DUTTON: ... for the damage to the ... All right.

When it comes to values, there's two oblems here. If we were to simply take the value of a vehicle and say, so many dollars ought be charged in replacing that vehicle if it's a total loss is one thing, and that would be a very nple matter. But what is in fact happening is that there are about 4 percent of the vehicles are er a total loss. The remainders have to be repaired. And the charge out rate from body shops 1r hour, is the same whether that car is four-five years old, whether it is a very expensive model hicle.

The parts may vary to some deg ree, but the number of hours worked on an older vehicle, 1y be more than on the newer vehicle because of the condition that the vehicle is in - putting ,rts on it. So it's not just as cut and dried as it may at first appear, that if a car gets older it ,rhaps ought to have a lower rate, or a more expensive car. Now, I know there is an inequity our system and that we haven't got the truly expensive cars lined up properly, and that one the reasons for that is because it, and has been from square one, the highly automated system :tt we have.

For instance, we know, I believe there were two Rolls-Ro yce if I'm right, I think there !re two, and they're worth around $80,000 or thereabouts. We did not build anything into the stem to take care of two vehicles out of some 500,000. Maybe what we ought to do opt line portion of it and to make charges in that fashion, which would simply mean in those cases, of urse, that they have to be handled manually and make sure that everyone got their renewal notice, �- PAWLEV: Mr. Dutton, if I could just pursue that further. You mention two Rolls- Royce.

I gather it the same inequity exists insofar as other, newer, hig her-priced cars, such as Buicks, Cadillacs, 29

etc. Public Utilities Wednesday, April 11, 1979 MR. DUTTON: There is an inequity in the sys tem, yes, Mr. Chairman, there's still an inequity the sys tem. We still get the number of categories as we had from the beginning. This has beE su bject to review, but we had hoped to make some changes a year ago, but about that time, think it's around a year ago, about that time they were coming out with the smaller model vehicle Apparently, a Cadillac is not the same huge vehicle that it once was, nor is some of the mo expen sive cars like the 98s and so on.

We have not had a complete review made and I'm su you're quite aware that it takes a tremendous amount of lead time to make change in a comput system to make sure that there's no bugs in it and we don't foul the whole thing up. MR. PAWLEY: Well, if I could just further elabor ate on that. What really you're saying, Mr.

Duttc if I'm interpreting your remarks correctly, that, in practice, we have a situation now where Buic� Cadillacs, higher priced cars, that when there is a rate increase, that rate increase is zero, is ze compa red to a rate increase for a smaller, less valued car where the rate incr ease will reflect t 5.5 percent or whatever is the increase during the year, the general rate increase. MR.

DUTTON: Well, the rate incr ease of course was 5.5 percent for all vehicles, but the po you're making that in dollars probably it . should have been far greater in the more expensive vehicl and if that's what you are inferri ng, Sir, I would agree with you. MR. PAWLEY: Am I correct then in concluding that the rate increase on a Buick dollar-wise exactly the same rate increase as for a Chev or a Ford, dollar-wise? MR. DUTTON: If they're at the top group, Group 9, yes that would be the case. MR. PAWLEY: Now, what's concerning me, Mr.

Dutton, is you indicate that a certain amount lead time is required, how much lead time do you suggest is required in order to eliminate t inequity from within the sys tem? MR. DUTTON: Well, I think the lead time requir es a change in the system, pretty well, and t is what we have been hesitating to do. I'm sure you'll rec all, Sir, that we had tremendous proble initially to develop a computeri zed system for Autopac, and it took a few years to overcome tl problem.

The system is running very smoothly at the time, but this inequity does exist and I th the change that would be required would take about six months, would be my thought on the subjE Six months to a year. Mr. Hillier is in charge of that department so I asked him. MR. PAWLEY: Well, you know I certainly don't wish to appear to be carping towards you Mr. Dut or to your staff. I have the fulle st respect for the compe tenc y exhi bited by you and by your st but let me just put it this way to you.

Can we be assured, or do I have to re-di rect this quest to the minister, that the inequities which presently exist by which Buicks, Cadillacs, Mercedes-81 receive proportionatly small increases in rates will be resolved so there's an equitable increasE rates insofar as those vehicles are concerned in relationship to the average man's car. I'm referr to the Chev, the Ford, the Volks, just the simple average car that exist in Manitoba. Will th inequities, since a 6 month period is required, will they be resolved for next year's billings? MR.

DUTTON: If I may answer that, it really is an administ rative problem that's why I am sugges1 that it is the problem that we must come to grips with, and I assure you it will be done. Of cou1 it means an increase in rates for those people with their heavier cars and the larger, more expenl vehicles. But as you point out, there is an inequity at the present time and I agree, I certai nly ag1 it ought to be done, and we will get the administ rative problems corrected. MR. PAWLEY: So that I can then gather from your remarks that it will be corrected for the 1 billing? MR.

DUTTON: 1 will make a pledge that it will corrected for the next renewal, yes. MR. PAWLEY: Now, if I could further pursue the question of billings' the rate increase this l was 5 percent? MR. DUTTON: 5.5 percent. 30

Public Utilities Wednesday, April 11, 1979 R. PAWLEY: 5.5 percent. Could I ask, insofar as the rates set for the new cars, if I could just ke an average model, a 4-door Chev., the average model and compare the rate increase insofar ; that vehicle is concerned with the rate for that same model of Chev., 19 78, could Mr. Dutton clicate whether the increase would be as well, in that case, only a 5.5 percent increase? R. DUTTON: A vehicle of that type would have gone up one step, the newer type of vehicle, Js the 5.5.

One of the problems, if I may point out, again, I make it quite clear that it's an lministrative problem. No one is directing us to run it this way. And the problem is that the computer stem was set up the same as it was when you were Chairman, and it hasn't changed at all, and l have come to the end of the steps that we can go. We have to increase the number of ranges 1d this would not make any difference, I assure you, to a person with a standard Chevrolet as what his rate increase would be.

When the steps are changed, and we do this for next year, means that the people with the more expensive cars are going to have a fairly substantial jump their premiums that will be charged. And the reason it hasn't been done is because the system :1t we have, the compu terized system, cannot accommodate it at this time. :t. PAWLEY: Yes, Mr.

Dutton, I am aware of the fact that the computer system was set up this ty - Autopac was established in 19 71, 19 72 and 1973 - but it was foresee n, I believe, even 3n, that eventually these inequities would occur and that preventive steps would have to be dertaken at some point to avoid the inequities. So if I express a disappointment it's only to the ect that the pr eventative steps have not taken place in order to avoid this point that we have �ched today where we are inequitably billing.

And I bel ieve that situation really has exceller ated er the years and has particularly been quite noticeable last year and this year insofar as the 1quitability is concerned, there was an inequitability that was beginning to creep in for some time. 1 I correct? t DUTTON: I agree. lt has been inequitable, really, from square one, that there has a certain tount of it, but I agree that the gap has incr eased since we've run to the top of the number codes that we have.

As I say, I agree with you, it is inequitable and I agree it ought to be changed d I have just made a pledge to you that we'll make the changes for next renewal. t PAWLEY: Now the reason inequitability is much greater now than ever before is that you've 1ched the top - what is it, the 8th rating? - and you've nowhere else to go. l. DUTTON: There's not. .. well on number 9, yes, 0 to 9, 0 to 9 and we've reached the top 9. Now we've got to change this, make changes in the sys tem. l.

PAWLEY: But certain cars, certain models have reached number 9 and they've been there the past 2 years and they have nowhere to go, there isn't a number 10 so basically that's the >blem. So when you answered me earlier, Mr. Dutton, to the effect that there were vehicles in :t which had reached, new models moving up automatically into a higher level, that's only the �e if it's an averaged price vehicle vehicle. If it's a more expensive then vehicle,that vehicle will 1e already reached number 9 and has nowhere to go; is that not correct? l. DUTTON: I agree with that. 1.

PAWLEY: So that we have insofar as that is concerned even further inequity insofar as new ,dels arriving on the scene, is that correct? t. DUTTON: Yes, the inequity exists with the new models arriving on the scene if they are in 1up number 9. :. PAWLEY: So again, in answer to the earlier question which you indicated that this would be :�lt with prior to next year, this problem would be resolved too insofar as the issuing of the new es involving brand new modelsis that correct? :. DUTTON: lt has to be resolved. :. PAWLEY: So that you are ... .

DUTTON: I will issue instructions that they come up with the answers for it. Of cou rse I realize t I'm asking my assistants, people to make a change without my consulting with them as to 31

Public Utilities Wednesday, April 11, 1979 what their problem work load is right now, but they' ll be instructed to gi ve it top priority and corr up with answers for me. MR. PAWLEV: Well, I would imagine that no one is wishing to weight certain vehicles with � dispr oportionate pre mium, but it would be a fact that unless this is done, there are many vehich that would be paying a higher premium than they ought to pay due to the fact there are certa other higher pric ed vehicles that are not paying their proper dollar increase. MR.

DUTTON: One could argue that but I would suggest that if you compare the rates of tho: vehicles for what is being paid in other provinces, you'll find that they're not being charged l excessive premium. MR. PAWLEY: Well, Mr.

Dutton, when you referred earlier to one of two cars, which is the extren situation of it, I think you'd have to agree with me that there are hundreds of cars that are involv( in this inequity right now, Buicks, Cadillacs, Mercedes-Benz, Rolls Royces, but you referred to h Rolls Royces, $80,000 value, you would agree with me that the premium that's being paid the certainly is not sufficient in order to properly repair a Rolls Royce that might be a total or comple write-off as a result of an accident at the present time. MR. DUTTON: I agree absolutely on that point. MR. PAWLEY: That's all the questions I have. MR.

CHAIRMAN: The Member for St. George. MR. URUSKI: Thank you, Mr. Chairman. I'd like to ask the Chairman what steps, what progre has been made with respect to implementing a compr ehensive driver education system in our hi schools, along the lines of possibly offering the driver education cou rse as an optional credit high schools through the Department of Education and the Motor Vehicle Branch? Is the corporati putting any funds into driver education in this province? MR.

DUTTON: The corporation is quite prepared to put funds into driver education and I'm st you're aware we do at the present time put in a certain amount of money in driver education goes to the Safety Council. However, dealing with high school driver education, we have be prepared for some years to spend what I would consider to be a substantial sum of money to as� in driver education in the high schools. I am sure you will underst and, though, that we have no control over what the Department Education wants to see taught in the high schools.

We can only say that certain sums of mor will be made available, should you deem it wise to take this type of training in high school. Ag� when it comes to other departments of government, like Mr. Dygala's department, you will hl to ask him just what plans they have, but we're quite prepared to subsid ize any plans for dri· education that they can come up with. MR. URUSKI: Yes, Mr.

Chairman, I would like to ask the Minister, there were discussions an would just like to bring him up to date, between MPIC, the Department of Education and the Mo Vehicles Branch, the Branch that supplied the instructors to the schools, there were some proble that had to be worked out with respect to the numbers of cars and the numbers of instruct that had to be supplied.

That's going back several years. lt just seems that although everyone agrees that the idea is a good one, that it should be into practice, that one course, the one cou rse that teaches our youth and our future drivers improve their abilities and their skills and the area where many of our younger drivers lose tl lives or become injured, we just take a kind of a nonchalant attitude in terms of provi ding th with the necessary skills in terms of preparing them for future years on the hig hway.

We te: them everyt hing else, but yet more than, I would say, almost 10 0 percent of our youth are invol' on the hig hway and are going to require driving skills for the rest of their lives, and yet we, a society, are not prepared to put some compr ehensive program to teach them that life-ski ll, wh if we look at the Statistics of deaths and injuries on our high way, is just ever increasing in te1 of dollar amounts and the loss of lives.

I would implore the Minister and ask him whether he would convene a Comm ittee of the Mini: of Education and the Minister of Highways, and himself, and rekindle that process, the corpora is prepared to put funds into driver education. We know that probably at today's costs we're lool at probably somewhere in the neigh bourhood of $1 .5 million, maybe $2 million would be reqUI 32

Public Utilities Wednesday, April 11, 1979 :mnually to put it into motion. But at least I would ask him whether he would pull some figures :ogether and be prepared to report to the Legislature, say in two or thr ee months, as to where his program, whether the government gives this program any priorities, whether they are prepared o look at it, and whether they are prepared to move on it. We did start something and unfortunately have to say that my colleagues and even myself probably dragged their heels on it somewhat. Ne started the ball rolling and it dropped.

I am asking the present Minister whether he would be prepared to take up the cause and move t. The corpora tion , the Chairman has indic ated, they are prepared to put more funds in. Can we ake up his offer and see what we can do from here? �R. CHAIRMAN: Mr. McGill, the Honourable Minister. ION. EDWARD McGILL, Minister reporting for the Manitoba Public Insurance Corporation: Mr. :hairman, to the Member for St. George, he asked, among other things, if I would be prepared ) rekindle the interest.

I would assure him that re kindling is not necessary, that there is a very ctive interest on the part of this government and of MPIC and of the Driver Licensing Agency ' achieve a plan that will make driver education courses more attractive to the students in our c:hools, so that the interest which he has continue s and I would think perhaps is gaining some 1tensity. There have been two or three sug gested programs presented - two, I think - to over nment and we're looking at those with a great deal of interest.

We very much want to find 1e best plan to attract more and more students into a course of driver education, and that matter being examined very carefully. Mr. Dygala has mentioned and has made certain suggestions and these have been referred to 1d some consultation has been held with MPIC, who are familiar with incentive plans in other risdictions. So, Mr. Chairman, to assure the member, this is a very active consideration on the part of the )Vernment. We are looking for what we could develop as the best way of attract ing more students to a cou rse of driver education. lt seems, Mr.

Chairman, that there is a tendency, perhaps, for some students to feel that taking 1ch a cour se is a reco gnition that they really don't know a lot about driving cars and many young lople, of course, have a great deal of confidence and feel that perhaps they don't need any such lditional instruction. But we feel there are way, perhaps, by some incentive reductions in the cost licences, or in other ways, to attract more people into taking these cou rses.

Certainly I am advised at the statistics indicate that those who do take driver education have a better accident record an those who have not taken those courses. Now, I am not able to quote any specific figures that direction but 1 think it's generally held by both the Licensing Bureau and MPIC that there indeed an advantage to be achie ved by promoting and encouraging more students in Manitoba d more people in Manitoba to take driver education. �. CHAIRMAN: The Member for St. Vital. t D. JAMES WALDING: Mr. Chairman, on a point of order. Mr.

Chairman, I bring to your attention tt there appears not to be a quorum in this Comm ittee. t. CHAIRMAN: To the Member for St. Vital, we have usually follo wed the rule that we carry with the business of the Commi ttee prov iding there was a quorum when we started. If a member ;es the question' as you have, and wishes that the Commi ttee be disbanded until we can find 1uorum, then we will have to follow those instructions. ',.

WALDING: 1 bel ieve the rules require members to bring to the attention of the Speaker or Committee Chairman when there is not a quorum, and I observ e thr ee members of the Commi ttee sent. . CHAIRMAN: And is it your wish that we don't carry on with a smaller than regular nmittee? . WALDING: Well, Mr. Chairman, you are the Chairman of this, and as such, are su pposed Jphold the rules. The rules require that there be six members ... , CHAIRMAN: Yes, yes to the Member for St. Vital, and we will stop the proce edings until we a quorum. -(I nterjec tion)- We need six. 33

Public Utilities Wednesday, April 11, 1979 A MEMBER: You see, Billie and I are not on the Comm ittee. MR. CHAIRMAN: And Mr. McGill is a member of the Commi ttee. MR. EDWARD McGILL: Yes. I replaced Mr. Ransom. MR. CHAIRMAN: Back to Public Utilities Commi ttee and the Member for St. George. MR. URUSKI: Thank you, Mr.

Chairman, I appreciate the comments from the Minister, Mr Chairman, but while he indicates that there's very active interest and support, he neglected t1 mention the l<ey element in this area, and that is the Department of Education, whether their positio1 has somewhat moved and become less rigid, I recall, from about three years ago, in terms of th' position of the Teachers' Society, in the teaching of these cou rses, and what is the position of th Department of Education or is the Minister and the go vernment intending to go some other route If they are I'd like to hear some of his comments. MR.

CHAIRMAN: The Honourable Minister. MR. McGILL: Mr. Chairman, the government is examrmng some rec om mendations and som comments that have been made on a proposal by the Licensing Board, and when some consensL is achieved on what may be the best program to encourage participation in this, certainly we w invite the comments and the concu rrence of the Department of Education because, of course, E you point out, this is an area in which it's most important to have complete support.

But, at th stage we are examining what has been proposed to us and consulting with MPIC, examining wh: is being done in other jurisdictions and when we have a plan which, we feel, achie ves and provid� the best opportun ity for gr eater participation in this, certainly the·concurrence and the support , the Department of Education will be a necessary part. MR.

URUSKI: Could the minister indicate what kind of a time-frame is he working on in this arel Is he talking a year, six months, what is he really talking about, that he's examining and discussh because in our discussions of last meeting on this, he has been quite vague in his answers to 1 about certain specifics? Could the minister indicate what time-frame he is looking at in terms having some program put together that there will be some move ahead? MR. McGILL: No, Mr. Chairman, I could not be specific in terms of a time-frame.

This matt1 and others will be matters of review in respect to the general operations of MPIC, and would ! along concurrently with that review. MR. URUSKI: Am I given to understand that the Driver Education System is also part of the over review of MPIC operations? MR. McGILL: Well, Mr. Chairman, since these matters are coming under act of consideration the same time as it is contempla ted to provide for a general review, we feel that these matt1 are related and should be done concurrently. MR.

URUSKI: Well, is the minister also indicating that since these matters overlap into the Mo Vehicle Branch and the Department of Education, whether those departments will be part of 1 review process? Will they be involved in the review? MR. McGILL: Well, Mr. Chairman, in respect to this particular phase of the general review, comments of the Motor Vehicle Branch and of the Department of Education would certainly appropria tely part of that review. MR. URUSKI: Yes, Mr. Chairman. I'd like to ask the Chairman of the Board as to ...

We h: heard statements by the Premier of this Province indicating that he favours the no-fault sys1 of the Quebec plan. First of all, has the government gi ven your corporation and your board tl reasons for not proceed ing with the increase in no-fault benefits in the fall of 19 77? MR. CHAIRMAN: Mr. Dutton, are you in a position to answer that? MR. DUTTON: No, I never at any time discussed that situation. As you're aware the incr eas1 no-fault benefits were passed by the board prior to the provincial election and were submit 34

Public Utilities Wednesday, April 11, 1979 believe, by the then-Mini ster to the Cabinet. I assume that's the case but I haven't follo wed it p since then. ,R. URUSKI: Could you indicate, since there's been some sugges tion that a Quebec style of public 1surance would be favourable to some in this gov ernment, could you indicate how the Quebec tan would effect the Manitoba sys tem, if it was put into place here onto your system now? How rould it effect your program? IR. DUTTON: One has to establish just what is meant by the Quebec plan.

If you're talking about 1e entire system as an operation in Quebec as opposed to something inc orporated in the plan ut through with the Regie with the abolition of the tort and so on and we have two separate ues tions. I'm of the opinion that we ought to be looking at increase in no-fault payments and enefits and that perhaps the Quebec government had come up with a good idea, in the abolition f Tort, insofar as injuries to people are concerned. Just how this would apply in Manitoba remains > be seen, or if you can apply it.

And having said that , believing that that part of it is a good lea, I think that if we incr eased of cou rse the operations of Autopac to incorp orate the no-fault enefits in place of what you might call a partial no-fault system that we have which pays certain enefits under

Part 2 of the Act for no-fault and allows people to go to court for any incr ease I limits. The reason I make this statement, I'm of the view that the cou rts seem to lean over :�.ckwards to make awards to an injured person. This seems to be a society that's saying that �ople ought to be compe nsated if they're injured in automobile accidents, and if that is indeed ,e case, then why take up the time of the cour ts to make sure that they are comeensated. ' R.

URUSKI: I fully subscribe to that belief but I want to go a bit further because it's been 1ggested that there be implemented into the Manitoba system a freedom of choice in terms of JrChasing automobile physical damage collision coverage from the private sector. What impact Juld that have on the Manitoba system in terms of revenues and the like? R. DUTTON: Mr. Chairman, I don't think I should specula te on that type of thing what may be the minds of elected officials. I'd think that is not my position at all.

I don't know what is planned, 1ave not been told that this would necessarily be the case and I would imagine that when the IJdy goes on we would have ample time to be able to look at that and find out just how it would feet the corporation. I wouldn't want to answer it right now because the matter told us or told e that what you'r e suggesting is going to come about. R. URUSKI: Mr. Chairman, no one has said anything other than vague comments in the Press, 1t could you tell me if you were to give up your collision portion of your insurance portfolio, what ange in rev enue would that have on your corporation?

How much rev enue would have to be ifted? �- DUTTON: If you' re changing the question around to ask me how much rev enue we attribute injury to an individual and to collision, I could probably give you an answer to that. �- URUSKI: That's what I'm asking. �- DUTTON: Well, I would think that about 60 to 65 percent is attributable to repairing the maged vehicle. 1. URUSKI: So that means about two-thirds of your entire revenue would be collision !fer age? l. DUTTON: Two-thirds; roughly, roughly. Yes.

Again, without getting right down to details of at it is and maybe that percentage will change when I get the Cadillacs to change the es. 1. URUSKI: That will likely incr ease then, Mr. Chairman, if the rates come into being. If that !he case, can you indicate what role you see Autopac playing in terms of the no-fault injuries ·tion of the insurance portfolio? :. DUTTON: Well, we have now 10 0 percent of the whole role is ours, and when it comes to rease to an individual here, with the exception of - that's not quite true, I maybe should change t a bit - under the present system we have

Part 2 payments, as you know; the no-fault payments 35

Public Utilities Wednesday, April 11, 1979 on which a premium is paid only to Autopac and no one else, and that we get protection up t1 $50,000 third party coverage, only to Autopac, to no one else. But in excess of that, it can b pu rchased from any other sou rce and I sometimes wonder whether the committee is aware or anyon really realizes that Autopac has not got strictly a stranglehold on every thing; that every thing i mandatory and must come to us and ther efore we just have to show up in the morning and w get all the premiums. That's not true.

There is some $35 million in premiums out of our riding th� is in competition with the private sector. What the change would be would, I would sugg est, if w adopt the Quebec plan, then we would get 100 percent of the premiums relative to injuries to th individual. MR. CHAIRMAN: Before the Member for St. George contin ues on, I might mention that we ar again under the requirement of six members of the committee. -(Interjection)- Well, is it all rigl with the members of the comm ittee that we carry on or do they want me to adhere to th rule? MR. GREEN: Well, our rule was, Mr. Chairman, that we have a choice.

When there is no quorun we can't proceed. A MEMBER: lt never happened before. MR. GREEN: If you hadn't noticed it, I wouldn't say anything. ' MR. CHAIRMAN: We' re back to six now. MR. GREEN: Well, when you notice it, you can't carry on and that's it. MR. CHAIRMAN: Okay. We have a quorum again. The Member for St. George. MR. URUSKI: Thank you, Mr. Chairman. I'd like to ask whether or not the corporation still continu its investigation branch in investigating frauds against the corpora tion? MR. DUTTON: Mr. Chairman, the answer is in the affirmative. MR.

URUSKI: Could the Chairman indicate whether there has been an incr ease in fraud over tl last year or so against the corporation and what types of claims the fraud claims are bei1 perpetrated against the corporation? Is there any innovative things happening in the insurance fiE in fraud matters? · MR. DUTTON: Mr. Chairman, I don't think there is an increase in the number of fraud claims a1 some of the type of claims I do not necessarily start out with the intention of defrauding t corporation.

One of the things that does occur is that a person has an accident, usually a sin! car accident, hits a post, maybe clips a parked car and suddenly realizes that he's perhaps O\ .08, in his own mind and particularly if a person has had a few drinks, maybe thinks a little differen than he would when he is comple tely sober, decides he'd better get away from the scene of t accident, if he is going to be picked up for .08 and so they leave and then they try to figure c a way around this and then they say: "I'm going back to my apartment or my house, or whatev and I'll phone the police and tell them the car was st olen ".

If he does, the police will recover t car some hours later and phone the fellow up and say we've recovered your car in a damag condition. These are always a highly suspicious type of claims when they come in and the spec invest igation people make quite a detailed study. They will go so far as to check the type of pa damage to the car or if it has hit a post, if there's any wood chips. They take the statement to the type of claim this fellow says , when it was stolen; they' ll find out just where he was, j1 who was with him, many other questions.

And as a result in many instances the person reali; it was a very foolish move on their part to make a report such as that and they're charged VI fraud or public mischief, or whatever. But initially, I don't think they intended to start that, a of people, they just get themself in that type of corner without realizing it. I think a lot of peo are realizing now that the y can't get away with that. The special investigators, as you know, th are six of them. They are ex-policeman, all of them, and they are trained in this form investiga tion. MR.

URUSKI: Could the Chairman indicate what numbers of attempts and investigations go 36

Public Utilities Wednesday, April 11, 1979 m an annual basis of attempted frauds? You know, you have reported somewhere around 200,000 :laims a year. Of what number of those claims would be investigated? III R. DUTTON: Yes, I will get all the detailed information because that data has just crossed my lesk. There are, as you know, in excess of maybe 225 ,000 claims and the number that is investigated s very small indeed, but I will get you the correct number and let you have the number of cases vhere the police lay charges of fraud, or whatever. IIR. URUSKI: Mr.

Chairman, has the corporation changed its auditors for the following year, to 1udit their books? Or is that a better question for the Minister to answer? IIR. DUTTON: Yes, I think it might be because there has been a change in our Act. IIR. CHAIRMAN: The Minister, Mr. Mc Gill. IIR. McGILL: Well, Mr. Chairman, I bel ieve that there has been no change up to this point in the ssignment of auditors for M PlC. The legislation, as Mr. Dutton points out, may have to be examined 1 that respect but at the moment the situation remains as formerly. That's my understanding ow. IR.

URUSKI: Could the Minister indicate whether the legislation would have to be changed before ny change in the auditing system be undertaken of who the auditors might be? Is that the impression 1at he has? IR. McGILL: Mr. Chairman, I'd have to research the Act but perhaps the . Minister of Finance, ·ho is here, might comment on that. IR. CHAIRMAN: The Minister of Finance. ON. DONALD W. CRAIK (Riel): Mr.

Chairman, MPIC, like a number of the other cases where dernal auditors have been ... it has been indicated that they will be brought in, a number of 1em, including MPIC, are done officially by the Provincial Auditor and if they were to be done v Order-in-Council the Act would require changing. lt was indicated in the announcement of the Jmber of auditors that would be brought in, external auditors, that MPIC would be included, but 1e final assignment has not been made at this point. R. URUSKI: Mr .. Chairman, I'd like to ask the Minister, now that they have possibly made a R. CHAIRMAN: To which Minister?

Would the Member for St. George ... ? R. URUSKI: The Minister responsible. 1 can't question, I don't think, the Minister of Finance. le Minister responsible for M PlC, whether the announcement was an illegal announcement, in terms , as the Minister of Finance pointed out, the assignment of auditors. How was the assiqnment auditors arrived at? R. McGILL: Well, Mr. Chairman, I think any announc ements with respect to the general policy 1 the appointment of external audit operations has been made by the Minister of Finance.

I wouldn't 1re to comment on that question immediately unless the Minister himself has some further >servat ion to make on that. R. URUSK: Mr. Chairman, I would like to ask the Minister responsible, does he know what the pact will be, financially or otherwise, on the corporation in the shift of auditors that has been nounced by the government? Was there any study done in terms of the cost involved? How were ey arrived at as to who will do the auditing, what expertise they have? I mean, there has been assignment. The Minister of Finance tells us that. You are the Minister responsible for that rporation.

Have you just gone ahead and blandly accepted what your colleague says, we're signing this firm, without questioning what the cost will be, what the expertise in that firm is in ·ms of auditing? What criteria did you use in accepting the firm that you got, or which firm is � firm that will be auditing MPIC? t McGILL: Well, Mr. Chairman, the Member for St. George knows, through his experience, that 37

Public Utilities Wednesday, April 11, 1979 these general policy decisions in respect to the appointment of outside auditing firms is a polic of government and applies to all such outside appointment s and, as such, is part of the polic which we support. MR. URUSKI: Well, Mr. Chairman, I am pleased that the Minister responsible supports the publ' announcement that was made illegally by the Minister of Finance, because the Act is very specifi, In the Manitoba Public Insurance Corporation Act,

Section 11 , subsection (3), which indicates tl' books and the accounts of the corporation shall be examined, checked and audited from time 1 time, and at least annually, by the Provincial Auditor, and the cost of the audit shall be paid t the corpora tion. Is the Minister now indicating that the announcement that was made by tt government was legal and, notwiths tanding the legislation, they are proce eding with it? MR. McGILL: Well, Mr.

Chairman, of course there is nothing illegal about the statement, tt announcement by the government that certain changes will be made, and the technical requiremen with respect to amendments of course would necessarily follow? MR. URUSKI: Mr. Chairman, in the announcement, if I recall the announcement, there were speci1 announc ements made as to which Crown agencies would be audited by private firms.

There w; no statement in the announc ement made by the Minister of Finance that any changes in legislati< would be made or would be brought forward to make that coincidental with the announc emer We don't know whether the changes will be accepted by the Legislatur e, that the Minister of Finan1 has indicated that. Has the Provincial Auditor indicated ... has he talked to the firms whether th have the expertise necessary to compl ete these audits? What criteria have you used?

Have y1 gotten advice from MPIC as to whether the firm that's been selected, and could he tell us whi' firm has been selected to audit the books of the corporation? MR. CHAIRMAN: The Minister of Finance. MR. CRAIK: Mr. Chairman, the legislation the member reads is correct, of course, and the sar is true of a number of the other cases where the assignment was made by Order-in-Council tt was recognized.

There are two areas of the total of 13 that are made by the shareholder an< think the remaining six are similar to M PlC, where the Provincial Auditor is assigned the respon sibil of the audit, but the Provincial Auditor, in turn, has the right to engage others and, in this particu case, we worked in concert with him in the allocation of the assignment of the audits, and tha what has been done in this case, but by virtue of the fact that MPIC has a year-end that is nE fall, October 31 , there hasn't been any haste and the announcement that was made was subjE to approval of the fee structure from the audit company, and all of these things have not yet be completed.

MR. URUSKI: Well, Mr. Chairman, I'd like to find out who is going to approve the fee struch of the audit for the Corpora tion and I would like to ask the Minister, has this firm been in to s him or the Corpora tion, this firm that has been selected? MR. CRAIK: I' ll have to answer the first part of that again. The indication was given at the ti1 of the assignment of external audits that all of them would be subject to appr oval of the Treas1 Board. MR. CHAIRMAN: The Ho nourable Member for St. George. MR.

URUSKI: Can the Minister of Finance indicate what criteria the Treasury Board IS m us approving or disapproving the Es timates or the costs to be subm itted in terms of determining costs of auditing for the Crown agencies. MR. CRAIK: A number of criteria, Mr. Chairman, and in this particular case with Autopac th is a record that the provincial auditor has of his costs of operation or his direct costs, at le; and that is used to some extent.

The auditors in question in all cases have had discussions v the provincial auditor to discuss whether there are any changes or whether there is anything unus or di fferent that has to be done in the audit and the Treasury Board takes into account in all ea the rec ommendations of the provincial auditor with regard to the final fee as well. But I rep that in this particular case, with the year end coming October 31, that this particular one has been dealt with in the final stages. 38

Public Utilities Wednesday, April 11, 1979 MR. CHAIRMAN: The Honourable Member for lnkster. MR. SIDNEV GREEN: Mr. Speaker, I think the Minister is trying to slough off in a rather cavalier fashionhe provisions of legislation by which his government is bound. The Cabinet is bound by the law and cannot merely ignore the law and say that it is going to appoint auditors to examine Crown :orporations in defiance of the legislation.

And if we will look at the announcement you see that the Minister announc ed that it would be government policy that there are certain accounts that Nere previously done by the provincial auditor, were going to be farmed out to private firms. And 1e named the firm. I believe it is named in the announc ement, which one would be doing the Public nsur ance Corporat ion. And I would venture to say that that auditor has already been down to The =>ublic Insur ance Corporation, is looking at their books and dealing with them.

And I rather suspect hat that is what is happening in comple te defiance of the legislation and in contempt of the _egislature because the law cannot be changed by the Cabinet. lt requir es the consent of the _egislature including the backbenchers who are also being held in contempt. The books and the tccounts of the corporation shall be examined, checked and audited from time to time and at least tnnually by the provincial auditor. And the cost of the audit shall be paid by the corporation.

Now even the greatest Philadelphia lawyers cannot make that read, the books and audits of he corporation shall not be examined, checked and audited from time to time by the pr ovincial tuditor but shall be che cked and audited by an auditor appointed by the Cabinet. There's nobody �ho make that type of transpositi on. And the Minister now comes faced 'Nith this defiance, faced iith this contempt of the Legislature, he says: "Well, we are perpetrating a subterfuge. What we 1re doing is saying that the provincial auditor is doing it but the provincial auditor is hiring a private .uditor." Well, Mr.

Chairman, that's contempt again of the Legislature because the provincial auditor l not su bject to the control of the government. He is subject ultimately to control of the Legislature nd can only be dismissed by a two-thirds vote of the Legislature. And I suggest that what has appened here is not that the provincial auditor has hired pvate accountants but that the government as told the pr ovincial auditor that he is no longer going to be there, that the corporation will have rivate accountants.

But in the meantime in order to maintain the su bterfuge that is being comm itted y the provincial government we will continue to use your name until we dispose of you. And, Mr. hairman, that is not a proper use of the office of the Provincial Auditor nor is it a proper use f the Legislature Assembly of the Province of Manitoba, nor is it a proper use of the Cabinet. nd I suggest, Mr.

Chairman, that the Minister immediately announce that the Provincial Auditor, nd not his private auditor, contin ues to be the auditor in accordance with the legislation and the rivate auditor will not be assigned until the law permits him to be assigned. IR. CHAIRMAN: The Honourable Minister of Finance. IR. CRAIK: Mr. Chairman, the Member for lnks ter has gone a little bit further than he ought to :tve gone with the facts. But that's not unusual. He talks about contempt of the Act and if that's 1e case, Mr.

Chairman, as I pointed out in the House, the majority of these firms that are being 1gaged as external auditors were already, in one form or another over the past few years during e former government as well, doing audits either for the provincial gover nment or for some of e corporations coming under the government. -(Int erjections)- R. CHAIRMAN: The Honourable Minister of Finance. Let him finish. R. CRAIK: Let me finish, Mr. Chairman. The announcements on these audits was pointed out 1ry clearly at the time they were announced.

As a matter of fact, the Provincial Auditor was with e when the announc ement was made. And he was consulted on these and was part of the tnouncement. And it was pointed out exactly what audits, by virtue of Order-in-Council, were signed by Order-in-Council, which ones were shareholder and which ones were ones that came 1der the Provincial Auditor directly, such as the MPIC does under it's Act.

And this was pointed 1t very clearly and he recognized and it was indicated to the public generally that in those particular ses that the assignment was done with the approval of the Provincial Auditor and the actual signment was made by the Provincial Auditor. Now in due cou rse that will be changed in the :t, itself, so that the power will be there for the LG and C to make the assignment which is a rfectly normal procedure. Now 1 would ask you, Mr. Chairman, to recognize the contradiction in the arguments being :lsented across the way, that there were assignments made of external audits.

How they were tde, whether they were made by the Provincial provincial government . . . well, let me recall one Venture Manitoba Tours was one. 1. GREEN: lt wasn't required by the Act to be done by the Provincial Auditor.

Public Utilities Wednesday, April 11, 1979 MR. CRAIK: The one, Coopers and Lyband, the y were so concerned about, it was done in 1976. Coopers and Lyband were assigned by the government or the Provincial Auditor, I don't know which one or the other to do an external audit. There also, Mr. Chairman, go back - one of their owr agencies, McKenzie Seeds has been done for ho w long by way of external audit? As 1 pointec out in the Legislature, out of the total number of a dozen audits, ten of them or so were donE by external audit over the same period of time as the former government was there. And, Mr.

Chairman, let me also point out on the former question - how were these assigned' Well they are assigned by first of all looking at the capabilities of the firms and the larger firm1 I indicated the background to it . The Provincial Auditor was checked with and he said I have ne reason to believe in any of these cases that there is any doubt about their capability of undertakin! the assignment and with the changes coming on in the Provincial Auditor Act, his own plate i: going to be more than full looking after the expanded responsibilities that he'll have. MR. GREEN: Mr.

Chairman, I am astounded that the Minister has raised example which I mw gather he believes to be comparable.

Venture Tours, McKenzie Seeds, do not have legislation whic says, "the books and accounts of the corporation should be examined, checked and audited fr01 time to time and at least annually by the Provincial Auditor", and to say that other agencie1 Mc Kenzie Seeds was a company that was operating for many years with it's own appointed auditc and I can tell the Minister that if he wants me to acknowledge, which I will, that under the Manitob Development Corporation Act some of the corporations, and I think Venture Tours was one of then had the Provincial Auditor and then changed to another auditor at the request of the Board • Directors.

Because there was a problem in how much the y were having to pay the Provincial Audit< and whether that was really necessary that that was done. And I am not suggesting that we only hired the Provincial Auditor. But that's quite a differenc Mr. Chairman, from saying that the Manitoba Public Insurance Corporation, which has legislatic directed who is to be the provincial auditor, is in a similiar position. And my understan ding of tt Provincial Auditor's statement, both at the Press conference and at Public Accounts, was that I did not ask for this change and that this change will reduce his staff.

This change was a governme directive. And all I am saying, Mr. Chairman, is that it was a government directive in defiance the law, in contempt of the Legislature, and as a direction to the Provincial Auditor which shou not have been made. And if it was made during the period when the New Democratic Par government in power there would be screams of anguish about how the government was stepph on the Provincial Auditor.

And they would not only come from the Opposition but the y would I joined by all of the media people who were coming to the defence of the Provincial Auditor • all occasions, every time there happened to be a disagreement or a supposed disagreement betwe' the Provincial Auditor and the gove rnment. So, Mr. Chairman, I suggest what we need from the Corporation and from the Minister is statement that the books and audits of the corporation are going to be exa mined, checked a1 audited by the Provincial Auditor.

And I would like to know from the Provincial Auditor and I v write him a letter as was done under the previous administration and I will expect an hone st ans111 - did he request or does he approve of the fact that he is being removed from auditing the boo of The Manitoba Public Corporation? And I wonder what his answer will be. Did he make tt request? Does he agree with it? Or did he simply accept a directive because it is government polh that he hire new auditors to do this.

Because certai nly at Public Accounts he said he had nothi to do with that deci sion. lt was something that he did not argue with because it was the go vernmE who made it. But to now suggest that the Provincial Auditor was a party to this decision is somethil Mr. Chairman, which I will ask the Provincial Auditor and I will expect and hon est answer. MR. CRAIK: Mr. Chairman, I can assure the member from my experience that he'll get an hon answer from the Provincial Auditor as well. MR. GREEN: Fine. MR.

CRAIK: But I'll tell him that all the questions that he wants to pose to the Provincial Audi have already been posed to him. Not by himself perhaps but other members of the Legislat' and by the media, etc. -( Interjec tion)- The answer, Mr. Chairman, here and you know the gr difficulty with the Member for lnkster is to keep him from taking things comple tely out of contE I said that the Provincial Provincial Auditor was consulted with on the matter and the Provin ' Auditor has the power to make the assignment of the audits as he has done in the past and continue to do so as he sees fit.

That is a regular type of procedure that he can follow by vir of the fact that it was brought about by the initiation of the government to bring in external auditc But with consultation with the Provincial Auditor is quite different from the Member for lnkster � 40

Public Utilities Wednesday, April 11, 1979 rants to narrowly pick out his clauses in

an Act. There is also another Act, the Provincial Auditor's .et, in addition to this Act that allows this procedure to be follo wed. And this was, Mr. Chairman, repeat for whatever time it is, fifth time or sixth time. This was done and pointed out at the me that out of the total number of audits exactly which ones were Order-i n-Council, which ones rere shareholder and which ones were done with the blessing of the Provincial Auditor. And, Mr. Chairman, to finally cap it off the intention will be to change the Legislation in those articular cases so that there is no question on the matter. IR. GREEN: Well, Mr.

Chairman, what my honourable friend says confirms ever ything that I have 'lid, that the government in due course will try to change the legislation to make their illegal acts lmply with the legislation. And, you know, the question as to whether such legislation is passed some thing which my honourable friend will have to learn he cannot take for granted. I was involved in a case with the banks, Mr.

Chairman, where the banks came to the courts 1d said "The government is going to change the legislation, and all three parties are in favour ! it." There is no more gov ernment, and there is no more legislature, and The Bank Act remains 3 it was when the bank said that this legislation will be changed, and what you now say are illegal ;ts will be legalized. Mr. Chairman, I repeat that a government cannot proceed to behave in >mp lete defiance of the legislation , and the suggestion that the Provincial Auditor was consulted - I know what kind of consultation that was, because we heard it in the House.

The First Minister said, "We are going to see to it that these things are done by private auditors." nd that's about the length of the consultation that the Provincial Auditor had. He was told, "We ant this work to be done by private auditors." And that's the answer in su bstance that he gave public accounts, and that was dealt with when the changes were made, that it was a question >t of. consultation but of government policy. Mr.

Chairman, I would like to deal with another question, and I will get in touch with the Provincial Jditor to find out whether he approved of, was asked whether he wanted to do this, or whether hat was done was a matter of government policy. If my honourable friend wants to talk on - want the floor for another question, but if he wants to talk on this question, I will yield to m. R. CHAIRMAN: I was yielding to the Minister of Finance answering questions on the auditing 1 behalf of the Minister responsible for Manitoba Public Insur ance, so ... R. GREEN: I didn't ask a question. I didn't ask a question. R.

CHAIRMAN: The Minister of Finance. R. CRAIK: Mr. Chairman, I want to remind yourself and the comm ittee that if the legislation were 1t changed, it is not of any great consequence in the matter of the engagement of external auditors, ovided the Provincial Auditor agrees with it. And I think that that point ought to be driven home 1ain. The engagement of the external auditors is not contingent upon the change of any legislation. 1gagement of external auditors is based in those cases where it is exclusively assigned to the ovincial Auditor, on his willingness to have the external auditors brought in.

And 1 want to point out, finally, on this matter, that the changes that will be made are done :>re to bring The Manitoba Act in line with The Federal Act, and with the past practice prior to e former government, where the engagement of external auditors is a matter of course, and where e auditing practices have proven to be , in the federal scene, far more flexible and in the best erests of the public than they have been in Manitoba. 11. CHAIRMAN: The Member for lnkster. �-GREEN: Mr. Chairman, I'm glad I yielded the floor, because the Mini$ter has now confirmed � posit ion.

He says you don't have to change the legislation if the Provincial Auditor agrees. But 's going to change the legislation. If the Provincial Auditor agrees, why is he changing the rislation? He's got the agreement. What he has indicated , Mr. Chairman, has nothing to do with � Provincial Auditor agreement, and that what was done is that the gov ernment, as a matter of licy, wanted these to be done by private auditors. And that's exactly what they announced, and �Y were very proud of it, until they now see that they have been in breach of the legislation. t if' as he says - and 1 strongly disagree, Mr.

Chairman it is a su bterfuge - if he says that · don't have to do this, that the Provincial Auditor can hire some private auditor to do it, and 1t is completely in accordance with the Act, then why is he changing the Act ? If that is com pletely hin the Act as it now stands, why are we going through this exercise of bringing in an amendment the Act and changing it? 41

Public Utilities Wednesday, April 11, 1979 There is a reason, Mr. Chairman.

The reason is that the Provincial Auditor did not initiate th change, didn't ask for it, I suggest doesn't agree with it, but is merely accepting the dictates whic my honourable friend refers to as consulta tion, that the gov ernment's policy is that this will be dor by external auditors, private auditors, who are in need of assistance, who are really in very b� shape, who are the people in the Province of Manitoba who need social assistance in such a w� that they can continue to survive and be well-fed and housed and clothed; that these are the peop who have priority from the First Minister, from the Minister of Finance, com pletely in line with hi I suggest, in substance at least, waiving of estate taxes to certain people because he feels th these people are the most people in need and therefore their estate taxes have to be waived.

Tl accountants have to be looked after. The corporations have to be looked after. And it doesn 't matt if the law says that it shan't be done that way; that the government uses any device, in this cas a subterfuge, in the other case, a ministerial directive rather than a Cabinet Order-in-Council, see to it tha t those very poor needy people are looked after by this gover nment. MR. CRAIK: Did you say greedy or needy? MR. GREEN: The needy, needy. MR. CHAIRMAN: The Minister of Finance. MR. CRAIK: lt seems somewhat difficult to put this rather useless debate to rest, because ' keep digging up other facets of it.

But the changes will be made for two reasons; one is for wt we consider to be a change to normality, what seems to be a normally accepted procedure in me jurisdictions where a government doesn't have the blinders on to contributions that the combinati of private sector and public sector involvement can do together, and the second reason is tt there are anomalies in the legislation now where a large number of the assig nments, namely one-h of the assignments that we are now making on external audits are done without the Provinc Auditor, and the other half are under his jurisdiction.

Now if the member's argument had any complete logic to it at all, and he had this great conce you know, during his eight years, and if it was such a matter of great concern to him, why c he not change it so nobody except the Provincial Auditor on any account of the provinc government, Crown Corpor ation, or anything else . MR. GREEN: Because I never agreed with it. MR. CRAIK: Well, Mr. Chairman, I'm trying to tell you, it seems very difficult to pin the meml down once he gets his bli nkers on. , that in fact, there are anomalies in the legislation now tl must be evideent, even to the most elementa ry mind ... MR.

GREEN: Hold on a minute .. .. to your elementary mind, yes - your elementary mind. W let him not talk about elementary minds . . . MR. CRAIK: ... out of the 13 that are assigned MR. CHAIRMAN: The Minister of Finance has the floor. MR. CRAIK: Of the 13 external audits that ... MR. GREEN: He started this . MR. CRAIK: ... are to be engaged, seven of them - seven of them - are done either Order-in-Council, or by the official shareholder for the particular corporation. Now the member's question was, and I simpl y bring it back to him, his question was "Wh the government chang ing?" lt's obvious . why it's changing it.

But what's obvious to him isn'1 obvious to some one else. But the reason is that what is going to be done, is that we're gc to return to a more normal condition, where by Order-in-Council particular external a1 assignments can be done, but The Provincial Auditors Act is also being changed, Mr. Chairrr which is long overdue, that will give the Provincial Auditor the overview of the entire public inter but will provide within that for the engagement of audits external to the government and wl I'm sure we'll find is in the best interests of Manitoba and finds the full agreement of the Provir Auditor.

But if he doesn 't, he'll have the full right to speak out against it. 42

Public Utilities Wednesday, April 11 , 1979 IIR. CHAIRMAN: The Member for lnkster. IIR. GREEN: Mr. Chairman, I want the record to note , and look at the discussion that preceded he remark, and who are the people that behave in an insulting way on this comm ittee. Now, Mr. Chairman, I agree that it is useless to argue with those who have elementary minds, nd ther efore it is of no value for me to continue this argument with the Ho nourable the Minister f Finance, and I will go to another point and we will deal with the question when the legislation omes before the House. Mr.

Chairman, I believe that I am a friend of the concept of public automobile insur ance. I do ot bel ieve that I have to, sort of, register my credentials in this respect. I think that what is happening 1 this comm ittee room, what has happened over the last eight years with regard to the people I this province, showing that they had prior to 1972 the capacity to handle what the insur ance gent said was mystical and magical and cannot be done by a public. I bel ieve that that has been ell proven , and I have absolutely no argument with the concept.

And furthermore, I feel that the nd of discussion that we are having today, other than the last 20 min utes of it, indicates that ith the public unde rwriting their own insur ance, they have an input as to how it's handled, in a ay which cannot be compared in any respect with what happens in the private sector when they �rmit the private sector to do it. Now, having said that, Mr.

Chairman, although I wish to indicate that I am a friend of the concept • public automobile insur ance, I am also going to indicate, and I say this without the least bit offence to the Chairman of the Corporation, that bureaucracy scares me more in the public sector, 1ly slightly more, than it does in the pr ivate sector, and there is bureaucracy in both tctors. The difference is that when bureaucr acy is in the public sector, -that the elected representatives tn do something about it, when it's in the private sector, they can do very little about it.

And :ompare the bureaucracy that existed under private insurance and that which exists under public ;urance. And I say that there has been a definite impr ovement. But impr ovement, Mr. Chairman, doesn't mean that it is perfect. And, as a matter of fact, 1at I'm going to say in a few moments is going to be very critical, in the hope that I can prove at public bureaucracy can be dealt with in a way which is much more meaningful than private 1reaucracy. And I'm going to deal, Mr.

Chairman, with two personal experiences that I had with 1topac, and 1 having had them, I bel ieve that every citizen of the Province of Manitoba has to ' through this process. And I am now talking from the point of the citizen who has to go through They deal with the making of a claim, the going to a Claim Centre, and the filing of a claimand ing paid. Now, I can tell you that from the point of the claim being accepted, to the point of being satisfied, that there is absolutely no problem whatsoever; that I perceived that it was an cellent syste m.

From the point of having the accident and being able to get the claim finalized, •elieve that although there has been improvement over the private sector, that there is much be desired, particularly where they relate to small accidents and very small damages. And I'm ing to give the kind that I'm refer ring to. One is the th eft of a tape deck in an automobile, which is worth maybe $75 - $80.00.

They up to higher figur es than that, but that's only for people who have great solicitude from the lvincial government for the fact that they've inherited half-a-million dollars and are in bad shape that acc ount, or private auditors. The other is the scrape of a door - $12 0 in body damages, nd that there is almost nothing that can be damaged now that doesn't cost $1 00 to fix - it's y rare. So, you first of all find that no matter what the complaint is, the only person who the Claim 1tre will talk to is the owner of the vehicle.

Now in the one case, it was my daughter who was he vehicle when it was damaged and she wanted to go down to the Claim Centre and go through proced ure without my presence, and I was told that I would have to be there. And the same 19 was true of the tape deck. lt wasn't me, it was my wife who ... now, I guess really what complaining about is that I had to go there, even though they were minor things, and it seems ne that the information could have been obtained from somebody other than the registered 1er. But I was told that it had to be the registered owner.

So being a dutiful citizen , I drove m to the Claim Centre on Pembina High way. There were, I would estimate, maybe a dozen to �ars in front of me. I did not know at that point what was sup posed to happen. I stood in a behind a series of cars. I asked my daughter to run in and find out what we are sup posed lo, and she did, and of course she came out with the bad news that you stay in this line and wait, and then you find out. I stood in that line for appr oximately one hour, waiting to get - to be the first car to where those doors open.

I mean, it was almost like opening the gates 1aradise when I got to that door, after sitting for an hour and waiting. Nobody said a word 43

Public Utilities Wednesday, April 11, 1979 to me. Nobody told me what I was waiting for; nobody told me approximately how long 1 a1 going to have to wait. Nobody paid any attention to me wh atsoever. When I got in, Mr. Chairman, I thought that I had entered paradise. But no. I was taken fro the garage into a waiting room where, Mr. Chairman - I hope I'm not going to exaggerate · I had to wait for another three-qu arters to one hour after walking up to a desk and being askE my name and address and then again I wasn't told what was happening or what would be tl case. I sat there, and then I noticed, Mr.

Chairman, I did not notice a smile in that office fro anybody. Now maybe I'm overreact ing, but I can tell the Minister that I'm a citizen, that I did n notice anybody smile through the entire thr ee-quarters of an hour. What I did notice is that a you1 official-looking man or woman from time to time would walk out and shout "Minaker, Ferguso1 and that means that you can come up to them and they take you into another room where Y' go to the adjuster and make the claim, and at that stage, you feel at least that you are doi some thing. Now, Mr.

Chairman, I believe that the procedure is probably . well conside red and is consider to be necessary. I am not sure that it's necessary. I'm not sure that there is not a better way handling small claims which can be filed by affidavit or some other way, because I sat for two hOl in that Claim Centre, most of the time doing absolutely nothing. But let us assume for the momE that ever ything that occurred to me is absolutely necessary and there is no way out of it. Whi I don't accept. I believe that with imagination, there are ways of dealing with these claims, a in some way reducing the amount of waiting.

But let us assume that you have to do those thin Why is there not some attempt to make the citizen who is, after all, the consumer, who is our mast somewhat more at ease with what has occurred . When he gets into the line, why does he not ! somebody giving him an information sheet? Saying that the following steps are being taken a it takes approximately ten minutes a car. You can count how long you're going to have to w Why indeed, Mr.

Chairman, is there not a clip board with much of the information that is be requested inside, give it to each car owner as they drive up, telling them to fill it in with a li map, detailing the accident. Now I know what the answer is. The bureaucrats will say, "They ne fill it in properly." That's what they'll say. But at least they're doing some thing, and you know, so of them may fill it in properly. What have you lost? The paper? We're in Churchill Forest lndustr the paper helps us if they use the paper.

But what have you lost if you gave each one of th car owners who is sitting for most of the time doing nothing to put in his name, his address, phone number, his driver's lic ense and with a map and a short description of the acci dent. may then walk into the adjuster; the adjuster can read it. He can fill in perhaps a blank or · that has been left out, or he can say, and I hope he would say it with a smile, "I'm sorry, isn't exactly right. Let's try again." But the fact is, it may be done properly, and at least it giv es the citizen something to do. \ indeed, Mr.

Chairman, do we not have what I' ve seen , and I'll gi ve full marks to the private sec that certain people do things with waiting rooms. A magazine is the obvious. There are no magaz in the waiting room. There is nothing. lt is a cold, spartan waiting room where people are trel as - I'm going to say as numbers, but I wish they did use numbers rather than names. Why 1 Why should a citizen not have some anonymity in a waiting room? Instead of saying, "Mr. Minak why don't the y give you a number and say, "Number six"? Then you walk up and say it wi smile, not "Number six!" Mr.

Chairman, these are small things, but they are very important th to the citizen. Why are there not, perhaps - I'm going to be perhaps outrageous - checker ga in the waiting room? Why, when the person is in the car is there not perhaps doodads or somet to - well, Mr. Chairman, I have been in restaurants where they gi ve you little puzzles to fi out while you are waiting for your meals, and I find that the service is much better in tl restaurants. Not because it comes quicker, but because you are not waiting. You are t entertained while this is happening. Now, Mr. Chairman, these are non-costly items.

They can fit into that budget with almos expense and the y mean a great deal to the service, and furthermore, and perhaps what is 1 important, the person who is doing this becomes aware that these people are not th ieves wh< coming, they are people who are your bosses, and you are their civil servants, and the y . a1 be treated nicely. They are to be treated courteously and they are to have every thing done is possible to make them comfortable. Now, Mr. Chairman, I regret to say and I tell the Chai this with all friendliness to what we are doing, that it is not that way.

I bel ieve, and I cannot � for this, but 1 bel ieve you can check it, that when the emplo yees in that place take their after 44

Public Utilities Wednesday, April 11, 1979 reak, everybody takes the afternoon break. So that the people in the lobby are sitting there and 1ere's nobody working inside. And I don't care - it may be logical that it's just as well that they tke it then as now, but when there are thir ty people waiting in a waiting room and nobody is orking inside, it is agg ravating. Mr. Chairman, I am not certain of the last point, although I looked and saw the break being tken during this waiting period, and there was nobody working inside. I peeked, Mr.

Chairman. laybe I'm wrong about that, but I believe that they all take - they're entitled to an afternoon reak. I mean, it's not like the Hansard emplo yees who have to work for six hour s with no break. don't believe - that. I bel ieve that they're entitled to an afternoon break.

But I think that the tizen should not feel that there is a - or why don't they say to the citizen, "Afternoon break. o out and have a cup of coff ee." There's no place at the Pembina one, where it's close to have cup of coffee, but if you had a number and you were number 15 and you were aware that it kes approximately 10 minutes, you would know that you were going to be a half hour. You should � able to walk out with that number, have a cup of coffee and come back. Now I don't know 1ether they do that. Mr. Chairman, I can't remember ever ything that happened to me there.

I cannot remember 'ery thing, but I do remember the feel ing. Which is the important thing. We see the bottom line, e gut feeling. And the gut feeling was that these people don't care very much about me. They e grudgingly going through the procedure of handling my claim. They are doing absolutely nothing try to facilitate it being done easier. They are doing absolutely nothing to accommodate the fact at perhaps for a $75 claim, I'm going to have to be sitting out there for two hours, and it can ' two hours, don't tell me it can't, because I'v e been there for two hours, and on a relatively 1all claim. And, Mr.

Chairman, I don't mind saying that my time, I charge for much more than :tt when I have a paying client, that it would be a loss if I had a client at that particular time. td I don't know why I had to be down there in the first place. Why could not I have sent a surrogate? :till have - this will show some of my colonialism - there are still children of mine who will , that type of thing for me. I mean, it might not last very long, but there is still that situation. td I am not permitted to do that. I phoned. I asked them , could I send somebody down. Mr.

Chairman, I believe that the Autopac procedure can be impr oved immeasurably at no cost, at virtually no cost, merely upon people considering that they are dealing with their emplo yers d that they want that person to walk out feel ing that he has been well served. I say with the epest regret that that is not now the situation, and I say that from personal experience. 1. CHAIRMAN: The Member for lnkster, could Mr. Dutton perhaps try . and answer some of Jr concerns from the first hour of your two-hour experience at the Autopac claim . . DUTTON: Well, I am quite aware, Mr.

Chairman, that what-was said was said in all sinc erity, 1 I know it's meant to a construct ive criticism. A criticism it certai nly is, no question about that. : not the policy of the Corporation to treat any claimants in that fash ion. If they're being treated hat fashion and - well, you've just stated the case - you have drawn a number of problems nind, one is that the PR office staff is not good. They don't smile at you; it costs nothing to le, and 1 think they ought to and we'll see what we can do to crack that.

When it comes to 19 there for a minor claim, 1 agree with you, and I could advise you that the system has been ked on, and we've had a Task Force working on this, including a member of the public who a claim to assist us, to try to get an outside view and what we're going to call Dial-A-Claim, :h will not be necessary for the type of claim that you mentioned to even go to Autopac.

Now hol dup here is - to say it can be done instantaneously is one thing, but why it can't be done 1ediately is that we do need bigger switchboards, that we find that the switchboards we have ur claim centres will not then take all the claims. Now what we do, we transfer an irate claimant tg to a claim centre to one that couldn't get through on the phone and say, "Big joke". We 9n't got such a thing as Dial-A-C laim, but these are on order and will be coming up for our �ow that could take care of a good deal of the problems.

There are other areas that we are <ing on; 1 bel ieve I detected the claim centre that you were at, and I believe that our problems greater in that particular centre than the others, and really why, I'm not sure as yet. But we trying to keep abreast of it. We have just recently instructed them, incidentally, to put in coffee hines. They have put in phones - they've got them on the outside, but they're putting pay 1es on the inside. We have just recently spent a fairly substantial sum of money to try to brighten 45

Public Utilities Wednesday, April 11, 1979 the place up, to make it look a little more pres entable. Now with your point about all the staff going for coffee breaks, I assure you, Sir, it just seem like that. That is not the case, they do not all go at once. They get 15 minutes coffee break i the morning and 15 minute coffee break ... and that's the union agreement, because they're entitle to it. it's up to the manager to make sure that they are properly assigned to their coffee period: And I'll look into that point too, to make sure that that is correct.

I think it would be terrible, c course, if they all went out for coffee and left people sitting there. Now the point with the numbered system I think is a good one too. Even if they're calling ye by name, surely everyone should be called Mr. or Miss or Mrs. I wouldn't want them to say, "HE Jones". MR. GREEN: They may have said Mr. I don't want ... MR. DUTTON: Again, too, with the delay, there has been an unusual delay this winter.

We've h� more claims than should - this last year have been increasing substantially all the time, and tl problem is, you put people on staff, they're just bodies, it takes a year to pretty well train an adjust so they can do meaningful work. They have to know a bit about the various components of a c1 they have to know a bit about The Highway Traffic Act; they have to know a little bit about la· they have to know a little bit about injuries to the individual, to find out what the problem is, wh they're worth; so we just can't pick someone off the street, and say, now you are an adjuster. takes time.

But it might be argued that the planning is wrong, and that we do not properly project the numb of claims we're going to have next winter - well, it's pretty difficult to do, and one of the thin we don't want to do is to be overstaffed and again, costing more money to the motorists w have their claims settled. But your comments, Mr. Green ... I'm only sorry that my Director of Claims wasn't here he could have heard them . . . but I will get Hansard, and I'll see that it gets go distribution. MR. GREEN: Well, Mr.

Chairman, although I dealt with some of the other things which are toleral:: which you've mentioned, the big problem is the wait in ig norance . MR. DUTTON: Without telling you what's going on. MR. GREEN: Yes, when you drive up, the wait in igno rance - not knowing what happens wt you get under that door - and then not knowing what happens after you go through; the otl things possibly become magnified by the irritation that you've had with the wait. And that's v some of the other things . . . but the other things can be corrected too. MR. DUTTON: Yes, of cou rse they can. MR. GREEN: Mr.

Chairman, I do not think that they smile. That was my op1mon. I also, Chairman, say that this could be well handled if Autopac set up a very very small branch; a v very small department called Customer Relations. MR. DUTTON: We have one. MR. GREEN: Well, you have one. What do you call it, by the way? Customer Relations? Is 1 what it's called? MR. DUTTON: Yes, I think that is what it's called, Customer Relations - Customer Service, I tt it is. lt's in the phone book, the yellow pages. MR. GREEN: Customer Services? Well, Mr.

Chairman, I would think that there should be a Gusto Services and Relations, because once you put the name to it, the person who is doing it is direc has his attention directed, that his job and in his terms of reference, to make the customer entir ely comfortable about his claims procedure.

Now if you eliminate the Small Claims by Dial-a-Claim, you will go a long way to improving this situation, because immediately even VI a customer comes in with a big claim which can't be handled by Dial-a-Claim, he will come there will be two cars instead of twelve, because ten of those cars will be eliminated by Dial-a-Claim, and that could make a big change. But 1 don't really care, even if a person is waiting for ten minutes, there is no reason why Autc 46

Public Utilities Wednesday, April 11, 1979 10uld not know that there's a man there sitting in his car waiting, and how can we deal with his iit to make it as painless as possible? Nothing, Mr. Chairman, I repeat, nothing, has been done that regard. You can't tell me that they do anything for the waiting motorist, nor for the brightening 1 the room of the wait - I supp ose that's a good thing, but I would prefer even a spartan room I had something to do. You know, a deck of cards to play soli taire - something - it is irritating ending 45 minutes just waiting.

MEMBER: Take out a subscription to Hansard. �-DUTTON: No, I appreciate your problems in that area. �-CHAIRMAN: The Member for St. James. �- MINAKER: Well, Mr. Chairman, I listened with much interest to Mr. Gr een with his concern out the problems at Autopac. I wasn't here during the Autopac debate, but I listened with interest the beaches at Grand Beach, because we thought at that time the then government would fall, d I might have to get involved in running for the Progressiv eservatives at that time. So I listened h interest. But I'm just wondering, Mr.

Chairman, if the honourable member would have given the same 1d of speech then as he did today, because it seems almost, Mr. Chairman, that the Honourable . Gr een for lnkster is becom ing a capitalist and is being affected by some of his socialist dreams, cause really what he is descri bing happens to everybody every day of the week. I'v e received 1ny phone calls and complaints about having to stand in lines, whether they are big claims or le claims, and the complaint being that I'm subsidizing Autopac; that my time is worth money. d I'm sure that Mr.

Green has indicated that now that he's no longer government and has some 1e to look after his practice ... I know any good practicing lawyers probably earning $30,000, $40,000 a year, that obviously his time is worth a lot of money; that what he is talking about that it affects me, so I'm not friendly to the system any more, we have to change it. Because .t was his opening remarks, that I'm a friend of Autopac, but ... So, Mr. Chairman, I kind of listened with great interest because really what he's reciting we've 1rd from many of my constituents; that if we institute what Mr.

Gr een suggests, that we have nebody there to receive us as a rec eptionist; to have more bodies so that we don't stand in 1 or have an office to cut down the line, then we're looking at higher costs, higher rates. And :he old days, in the other syste m, the auto accident occurred and your adjuster came out and � you, and you didn't waste your time; but now all of a sudden, Mr. Chairman, now because was personally affected, that it cost him his own pocket money and time to sit around, that s trying to imply that they can improve the bureaucrats. Well, Mr. Chairman, I sugg est it's built into the sys tem.

They laid it out; they as a government 1 out the system that we have; we have to stand in line when we have the accident; and I might that I'm fortunate - and I'll touch wood - that the name Minaker has only been called out :e since Autopac went through. lt wasn't very long ago, when I sat in line, but even the Honourable mber for lnkster would have them call out a number, not a name - a number would be quite 1quate, but not a name - and then he would have us put in pool tables or card games or 1ething so that we could forget about the cost that is affecting the private individual or the 1panies; because it's built into the syste m, Mr.

Chairman. I don't know what we can do about We can suggest, like Mr. Green has suggested, that we get more bodies, but then the next g he would be complaining about would be the high cost, that we were inc reasing it. , GREEN: I never sugge sted more bodies . . MINAKER: He suggested that we have somebody that would let them know what happens n you get through those two big magnificent doors, let them know what's happening inside building. And it seems, Mr. Chairman, that Mr.

Green was all for Autopac and all for what they've ,d for and every thing's fine, until he pers onally gets affec ted, and all of a sudden that $30,000 140,000 a year, that two hours mean a lot of money to him. lt didn't matter that much when vas Minister responsible for the government, because he could go down there in Public Works, �ar was fixed, but when it individually affects a person or a company, and it's out of his pocket, 1 someth ing's wrong with the bureaucrats. They don't smile. I'll have you know, Mr.

Chairman, to be a friend of Autopac, when I did have that accident and I had to go down, I waited some an hour, but when I went in they were friendly to me. They seemed to smile; were quite friendly; the people who interviewed me for the accident were quite friendly. So, maybe Mr. Green hit 47

Public Utilities Wednesday, April 11 , 1979 them on Friday afternoon, or Thursday afternoon - I don't know - but the attitude of the peo� who were working in there, they seemed to be overworked, the ones that I saw running arour and when I went in there it was about 10:00 o'clock in the morning, and 1 stood in line for 1 gue about half an hour. lt wasn't the bureaucrats that were creating the problem, it was the syste m, and 1 never thou� that I would hear the honourable member across the way start to complain about certain thin that he helped institute. MR. DUTTON: Mr.

Chairman, to the Member for lnkster, I have a list that 1 •• MR. GREEN: Mr. Chairman, I would like to answer as you gave the Minister of Finance opportunity to answer . . . MR. CHAIRMAN: Well, the Minister of Finance was given an opportun ity to answer on behalf the Corpora tion, and the questions that were being asked about ... can the Member assure 1 that he can gi ve a short answer, so we can get on with this report? MR. GREEN: Yes, I can give a very short answer. MR. CHAIRMAN: The Member for lnkster. MR. GREEN: Mr.

Chairman, there is nothing that I said that would cost money; seco ndly, I g1 my criticisms of what I see in the present system, and I did it in an effort to try to improve and I say that I couldn't have done this in the private sector. If I was to now give my criticis of the bureaucr acy that existed under private insurance before the public took over, it would t1 me two hours; it would be scath ing, Mr. Chairman; it would be sca thing ... well, I am going criticize the bureaucracy, Mr. Chairman, I am going to criticize . MR. CHAIRMAN: The Member for lnkster has been recognized. MR.

GREEN: I'm going to criticize - - on behalf of the Corporation which we set up I'm go to say that the bureaucracy that existed in the private sector was intolerable - intolerable - - t the amount of time that was wasted, that the number of lawyers that you had to see, that number of garages that you had to take your car to, that the number of lines that you had wait in in the adjuster's offices or other places, was absolutely intolerable, so intolerable that people wouldn't toler ate it, and I would not tolera te it. And I'm sugges ting, Mr.

Chairman, that se of the problems that exist with the new system can be corrected, and the reason that they she be corrected is that the public, of which I am one, aren't in control, and if my honourable frir says that the only reason I'm doing this is because it happened to me personally, he's absolu incorrect. I'm doing this because it affects the citizens of the Province of Manitoba. I know it affE them. lt has happened to me personally so that those who have spoken to me about it do have to convince me, and I'm bringing it to the attention of the Chairman. He has indicated ' it is a point well taken.

I believe it is. I bel ieve that we now have the power to correct it, and rr power for that. We did't have the power to correct it when my honourable friends werE charge. MR. CHAIRMAN: The Minister of Labour. MR. MacMASTER: Yes, Mr. Chairman, I just want to for the record clear up what I think an insinuation by the Member tor lnkster' when he was talking about the people at Autopac tal a coffee break like the poor people at Hansard could not. This is absolutely incorrect.

The per at Autopac have a defined, specific time in which they take a coffee break; the people for Han1 do not have a timed, specific, defined period when they can have a coffee break but they d< fact, have their coffee breaks . MR. GREEN: They do not. They are permitted to drink coffee between tapes, but there is no cc break and it's contained in their own literature. MR. CHAIRMAN: The Member tor Elm wood is the next person on my list, and hopefully he get back to the Public Insu rance Corpora tion's Annual Report. The Member for Elmwood. MR. RUSSELL DOERN: Mr.

Chairman, I wanted to comment on the suggestions of the Mer 48

Public Utilities Wednesday, April 11, 1979 >r lnkster because I think his attempts to make some positive suggestions were well taken, and think that what he's proposed is not something that will result in more staff man years, etc., tc. I recall being at the North End Drive-in Claims Centre. Is it on King? And I have to go on memory, ut I believe there are some large printing and signs which tell you what to do, et., etc., and I ssume that that sort of thing might be looked at.

Tbat may be one way of explaining to people hat they are getting into and maybe more of that, or embellishments of ttiat would be helpful. ne thing that occurs to me is, rather than hiring somebody to go and - you know, how do you >lve the problem put by the Member for lnkster? Well, one way would be to have pamph lets printed, 1d a person going from car to car as each car pulls up. That means another perso n. That means msiderable expenditure.

But if you had explanatory pamph lets and a box or a "Take One" type a situation when you first roll on to the property or at a particular point, that would solve that irticular problem. The other thing is that I hope the Chairman isn't going to direct his staff to smile incessantly 1 we're confronted with a whole score of sickly grins or toothy grins and gr eater work for the thodontic professi ons. Every body has great big capped teeth.

The obvious solu tion is pol iteness 1d pleasant dealings with the public, and I would say to the Chairman something that he knows ·eady, and to the Minister in particular, and that is that I think the public is quicker to condemn e government corporation compared to the private corpor ation. I bel ieve that if they've received 1ual treatment from the private sector and the public sector, they will bitch and complain about latment in the public sector and they may not utter a word against a private corporation.

I believe it's the way it is, partly because there's a certain attitude towards government and in this particular se, there is a feeling or a thought that it is their own corporation and that maybe they deserve tter treatment or that they expect more because they own it; it's their own company.

So I just think that some of the discussion this morning, I think, simply to underline that point the Minister and to the Chairman, that I think there has to be a constant examination and examination of how they are dealing with the public - for want of a better expression " public ations point of view" - and to make sure that people are treated in as good a manner as can expected. l. CHAIRMAN: Pass - the . Honour able Minister of Finance. l. CRAIK: Going back onto the topic of Autopac, Mr. Chairman.

I was hoping the Member for ster was going to be here because I was going to tell him I also had an experience at the Pembina tim Centre, that there is a way around his problem but it's rather a painful way around and that o have your car damaged so badly, you can't drive it in, which I can relate to him brings about Jy rapid service because you . don't have to stand in line; you walk in and deal with the blem . . CHAIRMAN: The Honourable Member for St. George . . URUSKI: Thank you, Mr. Chairman.

The Minister of Finance was answering questions with >ect to the auditing of the Public Insurance Corporation to the Member for lnkster, he indicated t it was with the concurrence of the Provincial Auditor that the changes are being made. Am 1rrect in that assumption, essentially? . CRAIK: Yes. URUSKI: Well, Mr. Chairman, on February 2nd during the Public Accounts Committee, the >'incial Auditor, upon being questioned about the auditing being distributed by the government, he was asked whose decision was it that the audit - and specifically of the Liquor Control 1mis sion - will be as you say, contr acted out?

The answer was that it was the gover nment's 1est for cont ract ing. And the follow-up question was, it was from Mr. Cherniack, "Mr. Ziprick, read the Act, and the Act,

Section 28, su bsect ion 3 says: 'The books and records of the 1mission are at all times subject to the examination and audit by the Provincial Auditor.' Does mean then that you have been requested, or may I say instructed, is that the wrong term ucted - that in the case of the Liquor Control Commission, you should contract the work o private enterprise?" "That's right", was the answer by Mr. Ziprick. And the follow-up question "And that decision then is not your decis ion." "That's not my decision, Mr.

Chairman". he Provincial Auditor has already stated to the Public Accounts Comm ittee that it was not his ;ion but it was the gov ernment's intent, not as the Minister of Finance has stated to this nittee, that it was on agreement of the Provincial Auditor that it is with his concurrence, he 49

Public Utilities Wednesday, April 11, 1979 has no involvement in it. He has indicated to this comm ittee on February 2nd of this year tha it was the gov ernment's decision and he had no

part in that decision in terms of the auditing c the of the Crown corporations that are by legislation to be audited by the Provincial Auditor an not as the Minister of Finance has indicated. So I would like to also know from the Minister resp onsible as to what the criteria will be i terms of the cos ting, how they will estab lish the costs and what the costs will be under the privat firms. How will they come up with the criteria and how effective ... who will measure whethE they are getting their money's worth? MR. CHAIRMAN: The Minister responsible for Public Insur ance. MR McGILL: Mr.

Chairman, there were some comments made earlier by the Member tor St. Geor� about whether it was the decision of the Provincial Auditor or concurrence. I would point out · him there is quite a difference in the two terms, and the Provincial Auditor quite correctly sa he doesn't make that decision, but the Minister of Finance, of course, has pointed out that essentia concurrence was established in this general change. As to the appointment of specific auditors ar their tees to be charged, that is a matter still to be determined by the Treasury Board and tt will be discussed in due course. MR.

CHAIRMAN: The Honourable Member tor St. George. MR. URUSKI: Can the Minister indicate to me whether th ey will be paying or accept costing tt is higher than the Provincial Auditor? MR. McGILL: Well, Mr. Chairman, that's a question that cannot be approached until we kn, specifically what the charges that will be established work out in terms of the total cost. MR. URUSKI: Mr. Chairman, I am going to make the assumption that the Provincial Auditor's eo were very high. Are you prepared to indicate now that you will accept equal or higher costs un• the private sector? MR.

McGILL: Well, that is a decision of government and we don't know as yet what those ea will be. MR. URUSKI: Mr. Chairman, cer tainly you don't know what the costs will be, but 1 am ask whether you will accept costs that will be higher than the costs of the Provincial Auditor? I saying that the costs of the Provincial Auditor are high, that his fees are fairly high in termf the auditing, and I'm using that assumption. Are you telling me that you are not concerned ab the costs of auditing? MR. McGILL: Mr.

Chairman, of cou rse we're concerned about the costs and what tee sched1 are proposed , and what tee schedules are accepted will be related of cou rse to what the pre� costs are. MR. URUSKI: Well, I want the Minister to tell me whether they will accept costs that are hi! including in those costs the normal costs of inflation, whether they will accept those costs f the private firms; if they are higher than last year and built in to that additional cost will be normal cost of incr eases of salaries and the like, whether they will go even above that that is b charged by the Provincial Auditor. MR.

McGILL: Well, to make a comparison of costs, Mr. Chairman, will necessarily involv• examination of the extent of the service being provided by the cont ractors and to compare the costs and the extent of the service presently provided, so that it's not entirely a mattE comparing numbers in this whole area; whether there will be any extension of auditor services and above that which is now being provided would be a factor. MR. URUSKI: Mr.

Chairman, is the Minister indicating now that there is a change in the sy of auditing that they are proposing to undertake or are they doing an annual audit that would non be done with the normal checks and balances of an audit of a corporation of that size? 1: Minister now telling this comm ittee that the audit procedures are being changed even betor, review that he has indicated has been undertaken? Are we into a new ball game of auditin he now saying that the entire system is changing even before his so-called study that he sa 50

Public Utilities Wednesday, April 11, 1979 l revie wing? Because that is what he is telling us. IR. McGILL: No, Mr. Chairman, I am not suggesting that, but I say that to compare the costs f the present auditor service and that which is contemplated from the private contractor, is not imply a matter of comparing dollars. IR. URUSKI: Can the Minister tell me whether he belie ves that there have been any shortc omings 1 the present auditing of the corporation that would require additional areas of auditing that have e>t been undertaken over the last seven years? IR. McGILL: No, Mr.

Chairman, I am not suggesting that there have been shortcomings. I am lt ruling out the possibility that there may be additional information that can be helpful to the leration generally. R. URUSKI: Well, Mr. Chairman, there is no doubt that the corporation has its own internal audit •stem that does its own on-going auditing and the Provincial Auditor or any auditor that would lme in would test the reliability of those systems that are in place internally.

I am asking the Minister explain what he really is talking about when he says that there may be additional auditing that ay be employed when the new firm comes in. I would like some elaboration on that. R. McGILL: Well, Mr. Chairman, I'm really trying to respond to the question earlier put by the 3mber that he wonders whether a certain dollar figure which is established as the cost of the esent audit, would be exceeded by the proposed fee for a private contractor, and I'm suggesting him that there may be other factors involved other than simply the total dollars. :r. URUSKI: Then, Mr.

Chairman, if there are other factors, could the Minister give us the other ;tors that may be involved since we don't know, for example, what criteria was used in selecting � auditors. All we have is a statement from the Minister of Finance who indicates: Well, these � national firms and because we borrow money on the international market, and these firms have ernational reputat ions, we should accept that they are good and that's it. We have no other ection or criteria that the government has established.

We have had even no tendering system the nature that we've had in the Department of Agriculture where there has been the type of lding and reserve bidding that has been put out on the quotes. We have had no quotes in terms the allowing of the auditing to go out, not even a request for tender but having the firms at st put in proposals on the tender. We have not even had that process.

All we have had is a 3Ction of government saying that firms will do it and these are the firms, and the Provincial Auditor d that that is the gov ernment's decision irr espective of what the Minister of Finance had said t it was with his concurrence. I can just imagine how that concurrence was arrived at, that you tll do it and here are your terms of refer ence. Let the Minister explain what govern ment intentions in this case . . McGILL: Mr.

Chairman, I think the Minister of Finance is adequate when he explained the sons behind the go vernment decision to place more of the workload in external audit and private tor audit firms. I think there is little to be gained by going over the general comments and pons es that were made in that respect . . CHAIRMAN: The Honourable Member for St. Vital. . WALDING: Mr. Chairman, for the record I'd like to ask Mr. Dutton how much the corporation l in auditing fees to the Provincial Auditor for the financial year ended October 31s t, 8? DUTTON: 1 know the answer to that; I'm pretty sure I'v e got the figure.

No, no, we received 11 from them the other day. I'm quite sure that the figure of $35,000 that was presented across desk. Is that not so ? lt would be a case of not being paid either and perhaps it would be 1ar under what we're talking about in here, but it would certainly be set up for the amount. of fees from October 31 st, that's 19 77, - -(Int erjec tion)- that's what you actually paid well, don't know what the total amount is. But at the end of October 31 st, 19 77, it would be around 000.00. Well, my figure is roughly right, we can get the figures for you, but I think around $35,000 1 annual cost to us.

I stand corrected, but I'm just speaking from memory; I'v e seen the bill e through. 51

Public Utilities Wednesday, April 11, 1979 MR. CHAIRMAN: The Member for St. Vital. MR. WALDING: I'd like to ask Mr. Dutton if he is satisfied that the audit was done in a prop( and adequate manner. MR. DUTTON: The Provincial Auditor? I think the Provincial Auditor certainly is doing an adequa job. There can be no question in my mind that he looked into every facet of our business. MR. WALDING: Mr. Chairman, we asked a few questions of Mr. Dutton last week and he sa that he would get the answers to those questions. Does he have them now? MR.

DUTTON: No, what we do with answers to any questions -a nd if I am wrong, he can corre me otherwise, but I can get Hansard and make sure that we understand every portion of that questi' that was asked before the answer in writing is returned. MR. WALDING: You write the individual members who asked the questions? MR. DUTTON: Yes, and it goes to the individual members. I MR. WALDING: I did ask Mr. Dutton if MPIC had bid on insurance for the Public Housing Autho (• I wonder if he has those answers now? I MR. DUTTON: No, I haven't, but that's one of the questions that we're going to answer.

I'm $' you'll realize that this covers a rather broad area -if my memory serves me right, you inc orpora: two or three questions in one, and this is one of the areas of course, that if you had last ye! premiums, whether public tendered or elected blanket coverage on sight- there were a num of questions that came in here. 1 I MR.WALDING: Right. MR. DUTTON: If you don't mind, wait for Hansard, because I give you an answer in writing 1 isn't exactly what you asked, then you've got every right to criticize me. MR. WALDING: Mr. Chairman, I'd like to ask Mr. Dutton if the corporation writes any ma insurance. MR.

DUTTON: Wet marine insurance? A very small amount. MR. WALDING: Did MPIC cover the insurance on the Lord Selkirk 11 when it was owned by gove rnment? MR. DUTTON: No, we've never at any time had insurance on Lord Selkirk 11. MR. WALDING: The corporation was never asked to bid on it? MR. DUTTON: No, I'm quite sure that's the case. MR. WALDING: No further questions. MR. CHAIRMAN: Is it the wish of the comm ittee that perhaps, we could now proceed pa£ page through the report?

Page 1- pass; Page 2- pass; Page 3- pass; Page 4- pass; Page 5-J Page 6- pass; Page 7-pa ss; Page 8- pass; Page 9-pass; Page 10- pass; Page 11 -p ass; 12- pass; Page 13-p ass; the Member for St. George. MR. URUSKI: Yes, Mr. Chairman, I had a couple of questions with respect to agents and the dE with agents where there have been errors and suspensions. I believe last time, when the comr met, Mr. Dutton indicated that there were thr ee or four suspensions. Am I correct in that assurr last year of agents who, for one reason or another, were suspended because of ... ? MR. DUTTON: Suspended, yes. MR.

URUSKI: There were some suspended. 52

Public Utilities Wednesday, April 11, 1979 R. DUTTON: Yes, I bel ieve that's correct. R. URUSKI: Could you indicate whether any were cancelled as a result of initial suspension? Jtopac agents, I'm referr ing to. R. DUTTON: In my rec ollection, your Autopac agents of last year, the suspensions were all lifted ter we had our sessions with them. R.

URUSKI: Was there a length of time of suspension meted out, say one week, two week or 1s the suspension primarily pending a hearing and the outcome of the hearing? ft DUTTON: They have quite a lot of protection really, an Autopac agent, and he cannot be ncelled unless he is gui lty of some misdemeanour.

And that procedure is set out I believe, in a regulations or the Act, I'm not sure which it is now, that I have to cite the reasons for suspending a agents and then give them five days to show cause why that should not be made permanent, d they appear, of course, within that period of time and state their case. �- CHAIRMAN: Page 14- pass; Page 15- pass; Page 16- pass; Page 17 -p ass; Page 18- pass; ge 19-p ass; Page 20- pass; Page 21 and the final page- pass. That conclude s 19 78 Annual port on the Manitoba Public Insur ance Corporation. Comm ittee rise. 53

Document details

Collection	Manitoba — Debates (Hansard)
Citation	31-3-pu2
Type	hansard
Volume / chapter	31st 3rd hansardpdf pu2.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	8bc13dd2c08e2541841c01bc245dc9002cba1d41

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