Manitoba Committee Hansard — 1 November 1988 (PUNR Committee, Sitting 7, 34th Legislature, 1st Session)

34-1-punr7

Manitoba — Debates (Hansard)

MG-8048 first Session - Thirty-Fourth legislature of the legislative Assembly of Manitoba STANDING COMMITTEE on PUBLIC UTILITIES and NATURAL RESOURCES 37 Elizabeth 11 Chairman Mr. H. Pankratz Constituency of La Verendrye VOL XXXVII No. 7 - 10 a.m., TUESDAY, NOVEMBER 1, 1988. Printed by the Office of the Queens Printer, Province of Manitoba IS SN 0713-9 454

NAME ALCOCK,Reg ANGUS, John ASHTON, Sieve BURRELL, Parker CARR,James CARSTAIRS, Sharon CHARLES, Gwen CHEEMA, Gulzar CHORNOPYSKI, Wi lli am CONNERY, Edward Hon. COWAN,Jay CUMMINGS, Glen, Hon. DERKACH, Leonard, Hon. DOER, Gary DOW NEY, James Hon. DRIEDGER, Albert, Hon. DRIEDGER, Herold, L. DUCHARME, Gerald, Hon . EDWARDS, Paul ENNS, Harry ERNST, Jim, Hon. EVANS, Laurie EVANS, Leonard FILMON, Gary, Hon. FINDLAY, Glen Hon. GAUDRY, Neil GILLESHAMMER, Harold GRAY, Avis HAMMOND, Gerrie HARAPIAK, Harry HARPER, Elij ah HELWER, Edward R. HEMPHILL, Maureen KOZAK, Richard, J. LAMOUREUX, Kevin, M.

MALOWAY, Jim MANDRAKE, Ed MANNESS, Clayton, Hon. McCRAE, James Hon. MINENKO, Mark MA NITOB A LEGISLATIVE ASSEMBLY Thirty-Fourth Legislature Members, Constituencies and Political Affiliation CONSTI TUENCY Os borne St. Norbert Thompson Swan River Fort Rouge River Heights Selk irk Kildonan Burrows Portage la Prairie Churchill Ste. Rose du Lac Roblin-Russell Concordia Arthur Emerson Niakwa Riel St. James Lakeside Charleswood Fort Garry Brandon East Tuxedo Virden St.

Boniface Minnedosa Ellice Kirkfield Park The Pas Rupertsland Gimli Logan Transcona lnkster Elmwood Assiniboia Morris Brandon West Seven Oaks MITCHELSON, Bonnie, Hon. River East NEUFELD, Harold, Hon. Rossmere OLESON, Charlotte Hon. Gladstone ORCHARD, Donald Hon. Pembina PANKRATZ, Helmut La Verendrye PATTERSON, Allan Radisson PENNER, Jack, Hon. Rhineland PLOHMAN, John · Dauphin PRAZNIK, Darren Lac du Bonnet ROCAN, Denis, Hon. Turtle Mountain ROCH, Gil les Spri ngfield ROSE, Bob St. Vital STORIE, Jerry Flin Flon TAYLOR, Harold Wolseley URUSKl, Bill lnterlake WASYLYCIA-LEIS, Judy St.

Johns YEO, lva Sturgeon Creek PARTY LIBERAL LIBERAL NDP PC LIBERAL LIBERAL LIBERAL LIBERAL LIBERAL PC NDP PC PC NDP PC PC LIBERAL PC LIBERAL PC PC LIBERAL NDP PC PC LIBERAL PC LIBERAL PC NDP NDP PC NDP LIBERAL LIBERAL NDP LIBERAL PC PC LI BERAL PC PC PC PC PC LIBERAL PC NDP PC PC LIBERAL LIBERAL NDP LIBERAL NDP NDP LIBERAL

LEGISL ATIVE ASSEMBLY OF MA NITOBA THE STANDING CO MMITTEE ON PUBLIC UTILITIES AN D NATURAL RESOURCES Tuesday, November 1, 19 88 TIME - 10 a.m. lOCATION - Winnipeg, Manitoba CHAIRMAN- Mr. Helmut Pankratz (la Verendrye) ATTENDANCE - QUORUM - 6 Members of the Committee present: Hon. Messrs. Cummings, Penner Messrs. Ashton, Carr, Dried ge r (Niakwa), Edward s, Enns, Evans (Brandon East), Pankratz, Storie APPEARING: Mr. Harold Thompson, Chairman, Board of Directors, MPIC Mr.

David Kidd, Senio r Vice-President of Insurance Operations, MPIC MATTERS UNDER DISCUSSION: 1987 Annual Report of the Manitoba Public Insurance Corporation Clerk of Committees, Mrs. Janet Summers: Will the committee please come to order. We must proceed to elect a Chairman for the committee responsible for Public Uti lities and Natural Resources. Are there any nominations? Hon. Glen Cummings (Minister responsible for the Manitoba Public Insurance Corporation): I nominate Helmut Pankratz. Madam Clerk: Are there any further nominations? Mr. Pankratz, will you please take the Chair. Mr.

Chairman, Helmut Pankratz: I would like to call the Committee on Public Utilities and Natural Resources to order to consider the Annual Report of the Manitoba Public Insurance Corporation. Does the Honourable Minister have anything to report at this time? Mr. Cummings: Thank you, Mr. Chairman. Only to indicate to the members of the committee that we have Mr. David Kidd with us at the table today, who has been the acting CEO of the corpoiation since last spiing, and Mr. Harold Thompson, who is chairman of the board. They will be prepared to answer questions each in their own responsibilit y.

I want to indicate to the Members that it was my understanding that they wanted to spend a particular 11 6 amount of time going thr ough some of the recommendations from the Kopstein Report. We have, as Government, prepared ourselves to respond to those questions and any other questions that you would deem to be appropriate. I am ready to ahead, Mr. Chairman. Mr. James Carr (Fort Rouge): Let me first begin by ackno wle dging that the Min ist er did in fact give Members of the Opposition half an hour to read the report. We appreciated that.

Half an hour is not a lot of time to digest over 600 pages of recommendations, some of which are very complex, but nonetheless, it beats no time at all or the 30 seconds that one often has to prepare oneself for questions that the press always has to ask. ..

(1010) Mr. Cummings: Mr. Chairman, on a point of order, I would ask that the Member for Fort Rouge (Mr. Carr), when he refers to 30 minutes, 30 minutes prior to Question Period that was. Thank you. Mr. Carr: Yes, indeed, it was 30 minutes prior to Question Period. We have had an initial response from the Government through the tabling of 27 recommendations that the Government intends to implement. There is some dozen or so that we have questions about, but I think even more importantly, this will be the first chance for the corporation itself to respond to the recommendations within Judge Kopstein's Report.

So my first question would be to the chairman of the corporation. There are a number of recommendations which talk about the autonomy of the board of MPIC, that it is very important that MPIC govern its own affairs not only in the rate-setti ng process but also in the internal operations of the corporation. it think it has become more and more important that the chairman and the Board of MPIC be made accountable through this committee.

My first question is a general one. lt is to ask the chairman what his thoug hts are, what priori ty recommendations speak out to him as he and his senior officials begin the process of sorting through this very thorough and complex report. Mr. Harold Thompson (Chairman, Board of Directors): Mr. Chairman, I probably can make two statements. Firstly, my personal reaction to the report is a positive one. Yes, it does say a few good things about the opera tion of the cor porat ion in terms of ser vice expen ses and produc t in cost. lt does point out weak nesses and areas where there can be improvements.

From the board's point of view, and

Tuesday, November 1, 1988 mine particularly, I think that the report is positive, particularly because it sets out an agenda of items that the board and management have to review and a timetable for considering the implication of either then directly or any modification of them. My second comment is that it was not until Thursday afternoon or Friday morning that the Board of Directors, all the directors, received a copy of the Kopstein Report.

Management at the moment is pulling together an asses sment of those that affect the corporati on specifically in the sense of this administration, and there will be a board meeting probably next week to review the report and dete rmin e what actions or what recommendations it would make to management in terms of the specific recommendations. Once the board has had an opportunity to review it in detail and to discuss it, till then I cannot really comment any further about any of the specific recommendations. Mr. Carr: Mr.

Chairperson, it could be a short meeting of the committee then because there are all kinds of questions about the specific recommendations of the report that we would like to ask.

I think I will start and try and see how far we get Recommendation A.07 talks about the importance of the Provincial Ombudsman who should be promoted as a resource for information to people who feel aggrieved by decisions or directions of the corporation. lt has to do with the whole area of appeal when Manitobans are, for one reason or another, frustrated with their dealings with the Manitoba Public Insurance Corporation, that the Ombuds person and other Boards of Mediation be es tabli she d to deal with th ose complaints.

I wonder if the chairman and his senior officials have had a chance to look at tho se rec ommenda tions and whether the y think it is appropriate that the Ombudsman be involved. Mr. Cummings: I would sugge st to the Member for Fort Rouge (Mr. Carr) that this probably more properly belongs on the side of a Government initiative and a governmental responsibility to increase the involvement of the Ombudsman. The reaso n tha t we have referred the five recommendations regarding the Ombuds man for further exam ination are that the re are financial implications, Treasu ry Board impli cations, for the Ombudsman.

I have written a letter to the Ombudsman asking for his reaction and his com ment s to the additional responsibil ities that he would be considering if these recommendations would be followed. I have too much respect for the Office of the Ombudsman to simply dump these kinds of responsibilities on him without a prior consultation and without full examination of the ramifications of how these could be handled. *

(1015) At the same time, there are other models in other jurisdictions that need to be considered in terms of appeal syste ms to provide a court of last resort, if you will, for the customers of the Crown corporation. Those are the considerations that have caused us to put this one on the list to be considered further. lt is certainly 11 7 not rejected, but we want to consider the ramifications that would be involved in turning these responsibilities over to the Ombudsman and the implications for his office. Mr.

Carr: I wonder if the Minister could give us some idea of when those recommendations might be reported back to the leg islature. Mr. Cumming s: First of all, I think that we are going to be into the new year before a decision would be made on what direction we would go in terms of an appeal process. The revision of The M PlC Act is going to be of a major nature, it would seem, if a goodly number of the judge's recommendations are accepted.

I think the whole volume of changes need to be considered together and brought through as a group to ind icate to the corporat ion the change s that Government would want to have implemented . lt would be some time before legisla tive changes could be put in but that does not pre clude the office of the Ombuds man becoming more involved in the interim. Mr.

Carr: Recommendation 1.04, that The MPIC Act be amended to preclude appointment of the Minister responsible for MPIC as chairperson of the board, is a very important one and has been accepted by the Government because it drives at the very heart of the political linkages between the corporation and the Cabinet which was the source of so many problems for MPIC over the last number of years. A recommendation that is in a sense related is that the board be required by statute to appoint the chief executive officer.

Not the Cabinet, not an Order-in Council appointment any more as has been customary in the past, but that the board appoint its own CEO. I do not believe that the Government has made any comment on that recommendation yet. I wonder if the Minister could let us know what his thinking is on that subject. Mr. Cummings: lt is an interesting recommendation from the judge. Tied to the fact that the chairman used to be the Minister, there was an obvious need to change the manner in which these positions were filled.

The major reason that we are givin g this fu rther consideration is that there are implications for all of our Crowns, and we would like to be able to assess the impact of using this type of a system in all of our Crowns before we make a decision. There are pros and cons as the critic would recognize and certainly it is not a practice that has been followed in any of our other Crowns as well. We certainly would like to see some unanimity in the way that they are handled. Mr. Carr : Is the Mini ste r in favour of this recommendation in principle? Mr. Cummings: There are some downsides to it.

The principle of separation and the principle getting the CEO in place who can fee! comfortable in his position and can feel that he is there on a long-term basis has to be achieved. This is one of the considerations that we will be looking at when we view this recommendation.

Tuesday, November 1, 19 88 ...

(1020) Mr. Carr: The whole subject of the relationship between the Government and the board of the corporation is essential in many of the recommendations contained within this report. In fact I think it is important to the restoration of public confidence and trust in MPIC. Recommendation No. 1.08 talks about the Minister being in formed within 15 days of all meetings of the board of the corporation as to what has occurred, and that no material change or alteration in the substance of insurance products or the pricing of products be approved at any meeting until the Minister has had a chance to review.

I wonder if we could just have a comment from the Minister on what he believes to be the appropriate day-to-day involvement of the Minister in the affairs of the corporation. Mr. Cummings: Large ly, as Ju dge Kopste in has outlined it, whereby the board would communicate through the chairman to the Minister of actions taken at a board meeti ng, is the proper form for communications between the board and the Minister on an ongoing basis, as far as I am concerned.

I would suggest that when we deal with the whole area of responsibility between the board and the Minister, the delineation has to be made between what is policy and what is operational decisions. The vice-presidents and the management of the corporation, in reporting to the board, have to deal with the ongoing operations of the corpo ration and service to the public. The pol icy direction that the Government wishes to give to the corporation has to be given in a clear and open manner so that the corporation and the public know where the Government is headed and what its policies are regarding the corporation.

Mr. Carr: A very controversial area is the ratemaking process and the ratemaking policies and the judge is very critical on the ability of the corporation during past years to accurately reflect its costs. In the 1987 year of MPIC, that was in fact a $46 million mistake in estimation of what the corporation's cost would be to what was the actual cost at the end of the year. The Minister has changed his mind on the relationship between ratemaking, rate reviewing and the Public Utilities Board.

The Minister had stated to us at this committee as a matter of fact, only two weeks ago, that it would not be possible for the 1989 rate year for the Public Util ities Board to approve MPIC rates. He now tells us that it is possible. We think that is a good thing. I wonder if the Minister could outline for us the

schedule of events that will occur from now until the rate-setting process is complete for the 1989 year. Mr. Cummings: Part of that process is still not finalized in terms of the precise steps that the corporation will be required to take, but the corporation will put before the PUB its proposal for the 1989 year and the Public Utilities Board will take the time at that point to establish the criteria and the amount of information that they will need to approve those rates.

That will be, 1 guess, a topic of ongoing consideration within the PUB as to 11 8 whether or not they have enough information and enough of the detail to make that decision prior to the time of printing. lt would be seen that they can take a particular amount of information to determine the level of change, if any, that the corporation appl ies for is suitable to make a judgment then they will give approval or disapproval. Mr. Carr: What role, if any, will the Cabinet play in setting of rates for MPIC this year? Mr. Cummings: None. Bear in mind the reality of the fact that the Act has not been changed.

There will be no pla ce for the Cabinet in the rate-setting process other than the ones that have passed PUB approval. Mr. Carr: The chairman of the corporation was doing some musing for us a couple of weeks back as to what rate increases there may or may not be for the 1989 year. I wonder now that we are a few further weeks down the road, whether the chairman would have any further comment on what impact the three-quarters statement, showing a profit for the corporation of some $11 million, may have on the rates for 1989? ...

(1025) Mr. Thompson: I am not sure that I mused at the hearing about what the increase might be. At the moment I am not in a position to tell you what the rate increase would be. I think that will come when the application is made to the PUB after the PUB legislation has been passed and promulgated. Mr. Carr: The Kopstein Report recommends that there be reserves within the corporation of some thing between $40 million and $50 million.

I wonder if the chairman would like to tell us what rate increases would be necessary to begin to move the reserves up to that point, and just how quickly he thinks the corporation ought to move to building up its reserves to the $50 million mark. Mr. Thompson: Two comments: (1) it would obviously be over a period of years; the rate increases I cannot give any indication of; (2) that would be a decision in our applic ation, it would be decision of the PUB ultimately. Mr. Carr: When would the Chair of MPIC be in a position to pass on recommendations for 1989 to the Public Ut ilities Board? Mr.

Thompson: After the public change has been made in legislation that requires us to report to the Public Utilities Board. Mr. Carr: To the Minister, when should we expect those legi slative changes to be in place? Mr. Cummings: Very shortly. We would also anticipate that part of that will be influenced by how long the House wants to debate it, but within a very short period

TUesday, November 1, 1988 of time that we should be able to proceed with that debat.e in the House. Mr. Carr: Re com menda tion No. 1. 24, a recommenda tion tha t has been accepted by the Government that the present requirement for annual public meetings be repealed.

Why has the Minister agreed to deny the people of Manitoba their right to annually appear in front of, not the Public Utilities Board but the executives of MPIC, so that frustrations they may feel or an expression of wrongdoing at the hands of the corporation can be vetted in a public forum with responsible officers present, so that the people of Manitoba can directly involve themselves in the process of accountability? Mr. Cummings: First of all, there are I think some criteria that the corporation should have when it goes out to meet with the publ ic.

They should have information that they want to take forward, programs that they want to explain, questions that they would like to have answered. In the forum that has been suggested, it seemed to me that we were getting into a rather problematic dog and-pony show type of a situation where the corporation would be out there putting itself before the public, without having an opp ortun ity to bring forward suggestions and opportunities for questions that involve programs and policies that they are involved with.

There are several recommendations throughout the Kopstein Report that indicate that the corporation should involve itself in pub lic heari ngs:

(1) Take informat ion to the public.

(2) Under our Cr own Accountability Act which will be introduced as I say, very shortly, I think you will find that there are provisions there that will accommodate these kinds of requests. *

(1030) Mr. Carr: I would just like to reiterate our view tha t the Government and the corporation have absol utely nothing to lose and everything to gain by offering the people of Manitoba an opportunity to quest ion senior officials of the corporation. I think that would be good for the public process in Manitoba so that all those who had a thought, a frustration, an opinion, a point of view, had a chance to air it in public with those who are accountable for the affairs of the corporation. There is everything to win by allowing the people such access to the corporation, and everything to lose by depriving it.

I would ask the Minister if he would reconsider his embracing this recommendation and consider the value and the advantage to Manitobans to have that kind of open access. Recommendation 2.0 1 talkS about the Government along with the Canadian Bar Association establishing a voluntary mediation process through an appointed board. lt is a two-year pilot project for the resolution of disputes in automobile accident cases. I wonder if the Minister would give us his thoughts on that recommendation. Mr. Cummings: Yes, it is a valuable recommendation.

Obviously; the only reason that-or not the only reason 119 but one of the reasons-o ne has to view it with some reservations and put it on a list that it would require that it have a little bit more study is that we would want to sit down with the parties involved and make sure that they would be wanting to cooperate. Mr. Carr: Moving along now to some of the nitty-gritty of surcharges and merit systems, discounts, etc., Recommendation 3.03 says that, effective not later than insurance year 1992, the corporation should replace its accident surcharge system with the syst em of discounts and surcharges.

I wonder if the chairperson of the corporation would give us a comment on that recommendation. Mr. Thompson: Certain ly, the corporation will be looking at it. I hope that in our deliberations, if we find that it is a practical and the appropriate thing for Manitoba motorists that we will make changes, the impr ovements, su bject of cou rse to Pub lic Utility Board's approval, and hopefully perhaps sooner than indicated in the report. Mr. Carr: The report is implicitly very critical of the current merit/demerit system and of the surcharge sys tem. lt talks about more equity and more simplicity.

What that means to us is that the current system is inequitable and complex. I wonder if the Chair of the corporation can tell us just how soon this more equitable system can be introduced and what the elements of it might be. Mr. Thompson: The present merit system was only introduced less than a year ago and we have not had that much experience to be able to analyze it. I think the answer to the question I gave when I answered the previous question. Mr.

Carr: Recommendation 3. 12 says that an effective not later than insurance year 1981, MPIC developed an actuarially sound and statistically-driven rate-making sys tem-1 99 1. That is astoni shing tha t a publi c insurance corporation is criticized through a thorough review of its operations for presumably not having an actuarially sound and statistically driven rate-making system. Graham Lane told us at committee two weeks ago that it was not until 1987 that the corporation actually had an actuary on staff and, in all those years prior to 1987, there were none.

Since the corporation has been very ineffect ive in estimating its costs from one year to the next, I would like a specific answer from the corporation on how it intends to develop that actuarially sound and statistically driven rate-making system. Mr.

Thompson: Two comments, one as far as the past is concerned, I think it is appropriate that the committee recognize that the concept of rates for many, many years, as Judge Kopstein covers in his report, was one of levelling, where there was very relatively little spread between the lowest premium and the highest premium for a class, where, as the judge reports, that obviously those in-i f you want to call it-the better drivers or

Tuesday, November 1, 1988 better vehicles with less accidents or no accidents are in a sense supporting the higher risk areas. That has been a concept that has been ineffective virtually from the corporation's inception. Yes, there were spreads but not great spreads. Under those circumstances, the statistical information or actuarially-driven rates would be of no real help if all we are looking for is the total amount of prem ium required to pay the claims for the following year with a very narrow spread between the rates.

What has developed in the Kopste in Report, and I think what has developed since the introduction of the merit program earlier this year, and what appears through comments of the public and the media, that the public and the judge is much more concerned with greater fairness and equity between the various classes of the insureds, of the policyholders, and that there should be a greater spread between the low and the high premium based much more on driving record as the merit program does and on accident record. That is a major change and certainly does require a much more statistical and actuarial balance.

The decision on what should be done about it is in two parts. The corporation has continued to employ the services of Tilling hast as its consulting actuaries. The corporation is in the process of recruiting an actuary for the corporation in a major position.

I think secondly, how far that sprea ding by actual experience and actuarial techniques should go will depend to a very large extent on the reaction of the Public Utilities Board to any recommendation by the MPIC Board in its application that the rates be increased. lt becomes to a large extent a decision of in a sense social policy as to how far it should go. That will ha ve to be a decision of the PUB. If it moves in that direction in the future, then I think it has to take two serious considerations.

One, should it be done all at once if that is the right decision or, if not, over what period of time; and No. 2, the mandate of the corporation has been to provide a good product, good service, at cost and at affordable cost. Therefore the affordable cost, because it is a monopoly and every one must have it- there is no underwriting- helps to det ermine what the upper limi t on rates in bad categories is acceptable to the PUB. The higher it is, obviously the lower it will be for the better drivers or accident-free vehicles.

If they want a lower upper limit, then obviously there will be, as the report talks of cross subsidizing between different classes. The ultimate decision would be that of the Public Util ities Board to the extent that the Government by the legislation is not allowed to establish any social policy towards that. Mr. Carr: Mr. Chairperson, I wonder if the Minister would give us his opinion on the necessity of including social factors in rate sett ing. Judge Kopstein says that rate increases have often borne no relationship with risk in cost experience.

Is it the Minister's view that these rates should be set with actuarial and statistically driven criteria as the sole ones, or that social issues ought to be a part of the process and, if so, who ought to determine what that social responsibility is? * (1040) 120 Mr. Cummings: The PUB will have an opportunity to consider all of the ramifications of any rate changes when they are placed before them. Obviously one of the considerations that they will have to look at in my estimation is whether or not the costs in certain areas come to the point where it becomes impossible for someone to obtain insurance.

That has to be one of the considerations I am sure that will be brought before the PUB. When they hear presentations from the public, they will be gi ven an oppo rtu nity to view tho se recommendations in the light of the fairness and the sharing of the risk. Mr. Carr: Mr. Chairperson, another recommendation of the report says that effective insurance here in 1989, as part of the basic Autopac coverage, MPIC should provid e automatic prote ction for claims against underinsured motorists up to the limit of third-party liability purchased.

Does the Chair of the corporation believe that he will recommend to his board that recommendation be adopted? Mr. Thompson: I think that the answer is that after the legislation has been promulgated, we will be going to the PUB and all of the changes in coverage and use will be disclosed at that time. I do not think it is appropriate for me to make any comment on any of the individual things that might be. I think it is unfair. Mr. Cummings: Mr. Chairman , if I could interject at this point, I do not think maybe the Member for Fort Rouge (Mr.

Carr) was implying this in his comments, but I think there is some misinformation or some confusion out there about how long the report has been available and how long the corporation has had an opportunity to become involved with it. In the acknowledgments at the front of the report, Judge Kopstein points out that the report did go past due dates originally set for its completion. The time frame as to when I received the report is as I stated in the House. No doubt the corporation, if they had the report early in the year, would have had a lot better opportunity to react.

The chairman has stated earlier today that the corporation is working on providing information and providing analysis for the board as to how they will deal with the recommendations in the report and just simply to indicate, not in any defensive way but simply in a manner of process, that a lot of the recommendations that have come through the report will as a result become very much part of the 1990 process. Mr. Carr: Mr. Chairperson, I appreciate the Minister's remarks and I understand that it takes a long time to absorb and beg in to process these recommendations.

We in the Opposition understand that particularly well because we had a half an hour to read it and to respond to reporters' questions. I would like to ask-and then I will yield the floor because I know my friends would like to ask some questions, and I will save some for after. The whole issue of installments is to make the very tough insurance nut be a little easier for motorists in Manitoba. The report reco mmend s that there be four qu arte rly

Tuesday, November 1, 1988 payments, and that there be special stickers given to motorists who would choose that option. I wonder if the corporation has had a chance yet to review that recommendation and how soon, if at all, they intend to implement it. Mr. Thom pson: I have read the recommendation. I have thought about it and the board will be considering it at its next meeting. Mr. Leonard Evana (Brandon East): Mr. Chairman, I have a few questions that I would like to ask. My colleague has a few on the area of Autopac.

I also have some questions, which I can reserve till later, on the General Insurance Division and, depending on how the committee goes, we cou ld be finished today, but depending on how things go. I do not have too many questions. Mr. Carr indicated earlier that he thought he would wrap it up today, but maybe that is not the case. Well, that remains to be seen. I just want to point out on a point of order that I have general insurance questio ns that I want to bring up subsequently and I will just confine myself to a few questions at this point on Autopac rates and that side of the corporation.

First of all, I want to say that I agree wholeheartedly with the comments made by my colleague from Fort Rouge (Mr. Carr) that it is absolutely essential that the corporation fulfil! what is now required under legislation, the requirement to have public hearings to allow people throughout all parts of Manitoba to provide ideas, vent their frustrations perhaps, or whatever they want to do, provide suggestions, make criticisms and so on. The Minister refers to it as a dog and pony show. That is a rather demeaning remark to make about a process which I think is in the public interest.

I think the Government would make a very serious mistake by not proceeding, by not continuing that requirement as laid down by law which was passed during the previous Government's administration. I think there is everything to be gained and nothing to be lost, maybe a little bit of expense in hiring a few halls around the province and travelling around a bit, but that is surely a minimal cost compared to some substantial benefits that could be accrued.

I think Judge Kopstein himself appreciated the fact that although some of the hearings did not have that many people at them, nevertheless he ap preciated the advice that he was being given and that information was valuable to him.

I would certainly hope that the Minister backs off on this and allows the corporation, in fact, requires the Government to continue to require all Cr own corporations, including MPIC, to have these public hearings or sessions with the public so that they can have an opportunity to let the Government, let the corporations involved know where they stand and what they have, what those people in that community have as concerns with the way the corporation is operating. The area of the Kopstein Report, by and large, I think everyone welcomed the report. lt made a lot of excellent 121 suggestions.

We in the NDP Opposition agree with the number of the recommendations made, particularly with regard to-w ell, I will only mention two, there are many, but I will just confine myself to two. That is the one, he refers to it in a number of pla ces, but including page 40 Judge Ko pstein states, and I am reading at the bottom of page 40, "Colli sion coverage should remain mandatory for the time being because otherwise Autopac might lose its economies of scale which permit it to offer service throughout Manitoba.

However, as noted above, deductibles at . fixed gradations above $350 and at lower premiums should be allowed as an option." I think Judge Kops tein has made a sensible recommendation to the Government, and I believe both the Liberal Party and the Conservative Party talked about this not being mandatory, that this be totally optional during the campaign. I do not want to put words in anyone's mouth, but I thought that was the position of both Parties, and here Judge Kopstein is going agains t tha t positio n. He is sayin g on his consideration it should remain mandatory, as I read it.

I guess my question then to the Minister is how is the Government going to react to this recommendation? What is your reaction to that recommendation? Are you going to carry on with the present system as Judge Kopstein recommends in this respect? Mr. Cummin gs: This is properly a recommendation that will go through the corporation and up to the board for consideration. I believe it was the Member for Brandon East (Mr. Leonard Evans) or the Member for Fort Rouge (Mr. Carr) who asked me a question, however, the other day in the House regarding this type of a recommendation.

I indicated at that time that the judge se ems to have made a responsible option available here, and that is all I care to say about it until the corporation has had time to evaluate it. Mr. Leonard Evans: As I understand the Minister then, the Government per se will not take any position on this particular aspect, but will leave it entirely to the board of directors and the MPIC organization. *

(1050) Mr. Cummin gs: I view it as one of those areas that is primarily an operational responsibility. Bear in mind that until anyone, any of us in this room could make a decision, we have to know the ramifications of the option that the judge has recommended. To that end, I think it is a hypothetical question until we have got all the information in front of us. Mr. leonard Evans: I am simply reiterating what the judge has recommended. I do not know all of the detail, but I assume tha t he has lo oked at the various ramifications and has come to that particular position.

The other area which is very important is the pure no-fault plan which the judge has suggested, and again he makes reference in different parts of the report, but certainly in pages 29 and 30 he states-and I am just quoting here-

TUesday, November 1, 19 88 I will not read this. Everyone can read it. The point is, he feels that it is an excel lent way to go. He notes that there are constitutional problems. He deals with that. He also notes that it is in effect in the Province of Quebec. He points out that there will be more benefits in income replacement to people who unfortunately may have to claim for benefits. But at the same time, he notes that Autopac, at least in 1987, could have saved almost $40 million, $39.8 million savings. He said it would result in reducing the losses for bodily injury compensation by about 44 percent.

I think this is a very important recommendation, and therefore I would like to get a reading. First of all, is the Government going to take a position on this? Has the Government taken a position on this, or will the Government take a position on this? I ask that of the Minister. Mr. Cummi ngs: Obviously, the first thing that the Government has to consider is whether or not this recommendation has any constitutional impediments to it. I have given the commitment and the Government has given the commitment that we will monitor the courts to see what the constitutional ramifications might be for this.

Certainly no one in my position and no one in Government should leap into one side or the other of a fray such as this without becoming fully cognizant of the information that is available around the continent and in fact around the world. We will be taking the time to apprise ourselves of the various volumes of information that are available and de termine whether or not all of the judge's recommendations are fully adoptable or whether there are other sides to the no-fault issue that need to be reconsidered. lt has been a very controversial topic in other jurisdictions.

As I say, there are volumes and volumes of information that need to be considered. Mr. leonard Evans: Mr. Chairman, I want to get something clear here. I asked the Minister about the Government's position, and he gave me a response. The other questio n, he talked about it being an operational matter and more or less would leave it to the MPIC Board. Is he saying in this case of the implementation of a pure no-fault system that this would be a position that the Government would de cide upon and then direct the corporation one way or the other? Is that what the Minister is saying? Mr.

Cummi ngs: lt would certainly be a policy decision of a Government to become involved in something as drama tic as this. Tha t does not mean tha t the corporation, however, would not have an opportunity and would not be requested -i n fact, it would be necessary for them to provide statistical and management expertise to the Government. But this is such a dramatic departure from the system that we presently have that it would be a policy decision.

Mr. l.. eonard Evans: On page 31 of the report, Volume I of the report, on the left side, Recommendation 2:03, I will just quote this sentence, this recommendation that "the constitutional iss ues relating to restriction of court access presently before the Supr eme Court of 122 Canada be monitored.

If the issue decided by the Supr eme Court of Canada leaves doubt as to the constitutionality of a pure no-fault automobile insurance plan, that a reference be directed to the Manitoba Court of Appeal for its opinion concerning introduction of a pure no-fault claim in Manitoba." My question is will the Government go that far? If for some reason or other the Supr eme Court leaves doubt re: constitutionality, is the Government prepared to go and take the ini tiative, take the action as sugge sted by Judge Kopstein, and that is to have a reference directed to the Manitoba Court of Appeal? Mr.

Cummings: I think it is somewhat hypothetical to say what will we do if the Supr eme Court does not give a clear reading. We will do our due diligence to make sure that the inf ormation requ ired for the publi c discussion on thi s issue is com piled, and if tha t decision-we will wait and see what the decision of the Supr eme Court is. Mr. leonard Evans: I would like to just ask a couple of concluding questions on the Autopac side with regard to rates and rate setting. I am not clear exactly what the process will be this year.

Perhaps the Minister made some reference to it earlier and I may have missed it because I had to step out for a minute. Exactly what wil l be the process thi s year? Judge Kopstein is suggesting one thing. The Minister had said one thing a couple of weeks ago or so and then the position was reversed. The Premier (Mr. Filmon) said something else. The position seemed to be reversed . it would seem to me that there is a matter of legisla tion being passed as well before you can do what you may wish to do, but as I say, Mr. Chairman, I am still not quite clear.

I wonder if the Minister could very briefly indicate to the committee exactly what the process will be this year with regard to rate setting and the involvement of the Public Utili ties Board-jus t very briefly. Mr. Cummings: The corporation will appear before the PUB with all of its rates for the coming year. The PUB will make a judgment based on the depth of information they think is appropriate to approve or di sapp rove the rates for the coming year . The governmental involvement will be eliminated by that process.

We will be introducing legislation very, very shortly that will require all of our Crowns to appear before the PUB. I am looking forward to having cooperation from those parties in the Opposition to deal with that legisla tion, not in blind haste but with due consideration and reasonable pace so that we can accomplish this end for the 1989 insurance year. Mr. leonard Evans: Can the Minister advise, or maybe the chairman of the board, the role of reserves in rate setting for automo bile insurance by MP IC? How significant is the role of reserves? How significant is the decision on reserve levels in rate setting?

Mr. Thom pson: lt is quite important, particularly when the corporation a year ago started with a $9 million deficit and requires what I like to refer to as a Rate Stabil ization Fund to accomplish two things: to provide for the future, if there are increases that they be

Tuesday, November 1, 19 88 moderate and consistent from year to year so that there is a stability of rates. Second, that there is sufficient reserve to take care for the odd year when there are exceptional weather or other hazards that increase the claims. The most recent ex ample of extreme was the Novemb er 1986 st orm.

Last Wednesday was a good day for cl aims, obviously, but those things are normaL That ha ppens regularly but it is important that there be an appropriate level of a Rate Stabilization Fund so that if there is an extreme weather condition that causes excess claims, over those that would normally be the case, that that does not figure a sudden increase, or major increase in premium rates. Mr. leonard Evans: Can the chairman advise the committee what his opinion is about the current state of reserves of the MPIC? Is he satisfied with the situation?

I am not trying to put words in his mouth or any thing, or is he very unhap py, or what just specifically can he tell us very briefly is his opinion on the reserve situation. *

(1100) Mr. Thompson: With our third quarter nine-month report showing a $7 million-odd earnings for the year, that brought our deficit down from $9 million to $2 million-ob viously, still of some concern. I am sorry, that should have been retained earnings rather than reserves. Mr. leonard Evans: Has the Government- maybe I should direct this to the Minister responsible for the Manitoba Public Insurance Corporation (Mr. Cummings) or to the chairman-a ny position, has it any view on this situation of retained earnings?

Some people use the term "reserves" or whatever, this cushion that is required, in the event of a disaster of some kind which would then of course have a dramatic effect on rates without having that cushion. I think we know what we are talking about, whatever. You prefer to use the term "retained earnings," I gather. So has the Government any particular position on this? Mr.

Cummings: The PUB , when it has an opportunity to review the rates for the coming year, will have to, I would consider anyway reasonable, will have to be cognizant of the impact that these reserves will have in terms of the operation of the corporation. In fact, their approval or disapproval of rates will probably be that one of the factors that they will be considering is the amount of reserve.

So while I may have some personal feelings about it, I would prefer to leave the issue until the PUB has an opportunity to make a judgment in the light of what they see to be a reasonable cushion for the benefit of the public. Mr. Leonard Evans: I would like to ask the chairman then, would he feel comfortable in seeking guidance from the Government, either the Minister or the Premier or the Government, on reserve levels, retained earnings levels, would he like guidance, would he be seeking 123 gu idance, or has he had any gu idance from the Government on this matter? Mr.

Thompson: We have had no specific guidance from the Government, but I think the indication in the Kopstein Report leads to a basis that he considers reasonable, where he talks of a target average of some 15 percent of written premiums which currently would be $40 million to $45 million. I should point out that that recommendation of his, the 15 percent level, is less than half what would be required for a private insurance company subject to the financial capital requirements of The Insurance Act. lt obviously is not practical or even perhaps reasonable to try to build that up in one year.

I think that it has to be over a period of years as the judge has recommended, and the corporation will be looking at that. I think quite properly it should get enough factual and financial information to the Public Utilities Board so that it can make an intelli gent decision on what the level should be and over what period of time and what average period. Mr. leonard Evans: Thank you for that response and information.

So he is telling us tha t, as such, at this point the Government has not taken any position on the question of level of earnings because it is a sensitive question, I think we should understand. lt has a direct bearing on rate adjustments. This is very important to me to get clear that the Government is staying absolutely neutral, is not taking any position, has not given any advice or suggested any position to the chairperso n, the chairman of the board with regard to reserves, or buildup, or draw down of reserves, or retained earnings. Mr. Cummings: That is correct. Mr. Leonard Evans: So th ere is no advice.

The Government has not given any direction or made any position known regarding this matter to the chairperson of the board, the chairman of the board, and therefore the corporation. Mr. Cummings: Mr. Chairman, the one thing that is pretty obvious in all this discussion, however, is that the Government has stated clearly, and the corporation has been, I think, very cognizant of the fact that the public will not stand for rate shocks, evident by the reaction that came from the public last year.

The Member has clearly identi fied that the setting of reserves, or retained earnings, can become a significant impact on the ultimate rate setting. While I have some concerns in terms of reserves and future potentials for catastrophes and that kind of thing that it has to be all put before the PUB for their analysis, is what will be in the best interests of the public. If they deem whatever level of reserves the corporation has to be too high or too low, that would certainly have an impact on whether or no t they approve any possible rate presentations tha t the corporation would make. Mr.

Leonard IEvans: Yes, I appreciate what the Minister is telling us, but my specific question is has the Minister,

Tuesday, November 1, 19 88 or the Premier, or the Government given any indication to the chairman of the board to the corporation as to what may be a desired level of change in the retained earnings or reserve situation? Mr. Cummings: I have not. Mr. l.. eonard Evans: So there has been no indication from the Premier or the Government, or the Minister to the chairperson of the board with regard to this very sensitive matter? Mr. Cummings: That is correct Mr. l.. eonard Evans: Well, maybe Mr. Thompson would like to comment on this because it is a very significant area and I do not want to rag it around.

This is about my last question, so I wonder if the Chair would like to comment on this, whether there is guidance at all been given to him with regard to this particular matter. Mr. Thom pson: As the Minister commented, he has not-o n the other hand, from my own personal business experience, I am very conscious of the need for an appropriate, not excessive but an appropriate, level of retained earnings, and we will be analyzing that in determining what average rate increase we would be applying for with the PUB.

We would give the PUB as much finan cial informa tion, as much det ailed background so that they could agree, or disagree, approve or modify the recommendation and, hopefully, to give MPIC a direction of what they consider to be an appropriate average level of retained earnings to take care of the violent swings that can happen in claims from year to year. Mr. leonard IEvans: Yes, I app reciate what Mr. Thompson is telling us.

I thank him for that information, but he is, in terms of the initiatives taken by himself the board, the corporation, as they go to the PUB , do not feel that they have any particular general guidance from the Government, however it may be transmitted to the chairperson, with regard to the level of reserves. He feels he has a free hand on what he and the corporation- because it is a judgment call; ultimately, it is a judgment call. I think someone somewhere said ratemaking was an art more than a science, and it is a matter of judgment and we want to have good judgments on this.

So therefore, has the Government in its wisdom indi cated a position to the ch airperson of the board? • (11 iO) Mr. Thom pson: Mr. Chairman, I think the answer to the question is that the Minister, The MPIC Act itself, charges the board with managing the affairs, and part of the managing of affairs is to make sure that financially the board is accomplishing subjectives of providing the right products at cost to the public and is cognizant of the volatility that can occur in claims from year to year and attempt to have a levelling of rates and a levelling over a period of time of the retained earnings.

I consider that to be part of the managing and our recommendations to whomever, they would make the 124 ultimate decision as to whether the managing in that area is appropriate or not. Mr. leonard Evans: I am going to wind this up. The point is what we get here and what we got with general insurance is certain statements made here and then the Premier of our province making other statements outside saying something totally opposed to what has been said here.

So what the chairperson is telling us I hope is that he feels he has a clear mandate to go to the PUB asking for rates making the sound judgments that he and the board wish to make and the corporation wishes to make with regard to the question of retained earnings, reserves, the cushion, whatever we call it, and that he is not going to be guided or influenced by statements that may be made by the Premier let us say outside of this committee. Mr.

Thom pson: I think the proper answer to that is that, when The PUB Act is revised to have MPIC go to the PUB for its rate setting, then the answer on that question does become the responsibility of PUB and not the Government. That is my understanding of what the legislation would provide and what the responsibilities of the Public Utilities Board is and all its actions to all Crowns. Mr. Cummings: I think the Member for Brandon East (Mr.

Leonard Evans) is probably acutely aware of the responsibility for the Rate Stabili zation Fund or for the reserves of the corporation, because that was in fact why there was such a rate shock last yea r. The corporation had been not reserving itself properly in previous years.

I think that it is only correct that, given the enormous importance of this particular aspect in relationship to the ultimate rates that the corporation will have to extract from the drivers of the province, if you will, the enormous importance that this reserve has in relationship to that, that the PUB be given the proper authority to examine that in relationship to the rates. When we appointed the board of directors to M PlC , we appointed a group of people who are of independent mind, who have good background, good business sense, and, as Mr.

Thompson has demonstrated this morning, are willing and ready to leave the corporation and provide advice as a board should. Particularly in the rate-setting area which is the first most obvious impact that the driving public sees in terms of the corporation, the process has to be seen to be above and bey ond the sticky fingers of Government. I do not want anyone being left with the impression that from my comments at any point indicated anything other than wanting to appear before the PUB.

The question was that the manner in which that process would be followed, and I think that the chairman has indicated quite clearly that when the rates are finally announced for 1989 that it will not be as a result of a directive from me or from the Premier or from the Cabinet. lt will be a result of a careful examination of the needs and the presentation to the PUB so that they can pass judgment on whether or not that was a correct and proper process. Mr. leonard Evans: I thank the Minister for that comment, but the point is, and he may wish to respond

Tuesday, November 1, 1988 to this, that the corporation has to take a position. lt has to do the research on the rates, given all the data it has. lt has to take into consideration the Rate Stabili zation Fund situation. So I sort of wonder when I hear from the Minister, well, we are going to give everything to the PUB and it will set the rates. I do not think that is how it is going to happen. The corporation has to use all its intelligence, its know-how, the data, its understa nding of the insurance industry to make sugges tions.

Part of that will be a judgment call on the Rate Stabil ization Fund and that is why I keep harping that is a very critical matter and nobody wants to see excessive increases in rates. Certainly, when you are in Government you do not want to, because if you are dealing with a monopoly, it is like talking about taxes, in effect. So nobody in his right mind wants to see that on either side of the House ·b ut especially on the Government side. I want to get that clear. Sur ely, the Minister agrees with me. I mean the corporation will be sugges ting a

schedule of rates, and based on that recommendation to the PUB for subsequent approval, will be a decision made about the Rate Stab ilization Fund. Mr. Chairman: Any more questions? Mr. Storie. Mr. Jerry Storie (Fiin Flon): Thank yo u, Mr . Chairperson. Just a couple of questions, the first one to Mr. Thompson.

I guess the Minister has, over the last couple of weeks, clarified his position with respect to the setting of rates for the 19 88-89 year, and I am wondering whether the chai rman had deve loped a posit ion about the appropria teness of the PUB se tting the rates inde pendent ly , in effect , of the corporat ion. I am wondering whether he app roves of that process or whether the chairman of the board would prefer to see MPIC set its rates in accordance with its own needs, in accordance with its own time frames. Mr.

Thompson: I do not think that the board or the PUB would be setting the rates independent ly, as you indicated. I do not see how that is practical. What will transpire is that when The PUB Act is revised and we are required to get approval of the PUB, we will make an application for hearing under whatever the process of the PUB is, and in that application we will be recommending the specific changes or rate increase or changes in coverage or usages that we recommend that would apply to the 1989 rate year.

Included with that information will be all the financial and statistical information that we have available to support that recommendation, and then go througlr-\Yhatever the Public Utilit ies Board process is until the board comes down with a-1 guess they call it an order or conclusion, or yes or no, or in-between. Mr. Storie: The P.U. Board, of course, would have an opportunity to make recommendations or, in effect, impose rates which were not recommended by M PlC.

So to that extent they would have the ultimate authority for esti itstishing rates in the province. 125 I guess my question would be following up on my colleague, the Member for Fort Rouge's (Mr. Carr) comments about the public not liking to see rate shocks, increases of 18 percent. We know that in other parts of the country 18 percent, 20 percent, 22 percent, 25 percent rate increases in private Insurance companies are not uncommon. With all of their much highly vaunted skil ls in est ablishing rates and es tablishing the parameters for rate increases year over year, it still happens.

I guess the question is, and the people of Manitoba will want to know, whether even given the responsibility to PUB to set rates, is it possible that in future rate increases might be 15 percent or 20 percent? Mr. Thompson: lt is hypothetical but yes, it could happen, but I would temper that ans wer with a communic ations program that the corporat ion is planning on has reasonably developed. Part of it is in the quarterly reports that will be sent out.

There will be information to the public regularly so that if we have three disasters in a year, in terms of claims, that the public will not be waiting till the end of the year to see what actually happened and what the rate increases would be. Obviously, our part of communication is if in the early part of our year there are tremendous claims and we get into a very loss position and it is followed by another, obviously, it is our responsibility at that time to not just table whatever the financial results but to give a commentary of why and what the future holds. lt may. Who knows?

If the Rate Stab ilization Fund is used up in the first three months, something has to be done the following year. *

(1120) Mr. Storie: I simply want it to be on the record that the process of estab lishing rates through the PUB is no guarantee. The rates will not fluctuate from year to year and some time s dramatically becaus e of exten uating circums tances and I think that should be a given.

I guess my final question, or my further question, is given that the PUB process can be lengt hy, that interveners can consume large amounts of time, questions will be addressed, detailed questions with respect to specific rates and specific groups and specific territories, is not that lengthy process going to impede the best inter ests of the corporation? Mr. Thomp son: I do not know exactly what the PUB process is or will be.

All I can say is that when The PUB Act is revised to have us make application to the PUB, we will be making application for our rate increase for 1989 and the PUB will determine the period of time or length or whatever. I do not know their process. I am somewhat new at it. Mr. Storie: I appreciate that Mr. Thompson is somewhat new and obviously, depending on the circumstances, the PUB process can be quite simple or quite complex, quite short or quite lengt hy. I am sure Mr. Thompson has read the Kopstein Commission Report. Page .19 says, "Because of a

Tuesday, November 1, 1988 significant time factor implicit in a public utilities board approval of actual rate increases, the corporation's ability to estimate, accurately, its needs for the ensuing year, could be seriously prejudiced. Prior PUB approval of rate increases is not practical. The Public Utili ties Board should, nonetheless, serve the equally important function of reviewing the corporation's ratemaking policies and practices, and report publicly upon those reviews." Mr. Kopstein says it is not practical to have the PUB establish rates. We watched Mr.

Cummings, with some amusement, flip-flop from one decision to another and follow up on one political promise and abandon another and then decide that it was more important to follow the political promise in the first place. I think that there are many people who would make the suggestion that this is polit ical opportu nism, that in fact the corporation's interests are being sacrificed because of a political promise that was made. Mr. Kopstein certainly seems to be of that impression. Is this good management becoming opportunistic rather than waiting, I guess, for the report and for Mr.

Kopstein's recommendations? The Minister flipped flopped back and forth and finally said, well, he put his finger into the wind and decided that is the way he should go. I am not sure that is as responsible a decision as we would have hoped to see. Given your confirmation this morning that rates could increase just as dramatically under PUB review as under any other kind of review, given the right circumstances, I think it is rather funny that the Minister has gone out on a limb and sawed himself off and ends up doing what Mr.

Kopstein would indicate is not the responsible thing because he clearly says, "Pr ior PUB approval of rate incr eases is not practical ." A rather te lling statement. I guess to the Minister, the little squabble you had with the Premier (Mr. Filmon), and perhaps I should blame the Premier for the final decision because he overruled the Minister's rather common-sense approach perhaps, that the Premier decided that politics should take a front seat and a practical business approach should take a back seat.

I am wondering whether the Minister has tried or is considering moving the Premier into a more right-thinking mode. Mr. C11.1mmings: The only confusion regarding the amount of time and the amount of backlog that could be created in the corporation revolves around the examination of the individual rates of which there are thousands within the corporation. The Member for Flin Flon (Mr.

Storie) can have a little fun with me if he chooses, but let us be very clear that in referring this question, the confusion is in the minds of the beholder, because when we look at the examination by the PUB of the rates for the corporation, we have to be able to put it in the context of making sure that the public is satisfied , that the decision is one that is made totally without influence for political consideration. The amount of depth that the PUB chooses to go into in the examination of any application by the 126 corporation will dictate the time frame by which they will have to operate.

This is new for them as well as for us. Certainly, the discussion and examination of the process will yield a process that will be useful for all Manitobans in the future. To have the job done, as we are attempting to do, will once and for all make it so that Manitobans feel that decisions on monopoly costs are not being made for reasons that are anything other than operational decisions in the best interests of the corporation's ability to serve the public, and ultimately means giving the public the best value for their dollar, either that or the necessity for a Crown corporation virtually becomes negated. Mr.

Paul Edwarc:ls (St. James): Mr. Chairperson, I really want to interrupt at this stage. Now that we are ge tting into discussions and debating as to the further use of the Public Utilities Board, I want to declare a conflict of interest due to my employment and ! will be exiting the committee at this time. Thank you. Mr. Chair man: Are there further questions on PUB? Perhaps the Member does not have to exit. Mr. Driedger. Mr. Herald Drie dger (Nia kwa): Not a further question as to PUB, just a different area, and I do not want to pre-empt the Member for Flin Flon (Mr. Storie). Mr. Chairma n: Okay, we can carry on.

Mr. D riedger. Mr. Hero!d Driec:lger: I just have a few questions. They probably have been touched on in the past, so I just want to very quickly clean them up.

Whene ver you have a large monopoly corporation like MPIC has become, you have a perception when individuals either have conflict with the corporation or they have what they perceive as a problem that has not been significantly add ressed; in other words, you run into the perception the corporation is not, if I may use a computerese term, user friendly, where the clients actually find that the corporation is insensitive to their needs or something to that effect.

I would like to just reference within this, for instance and I am sure it has been talked about before-jus t as an example of this, that the deadline for time payments which was indicated to be the 30th of August instead of the end of the month, which is just a small little statement, just a small little glitch probably in the computer program, but is there any thought on the part of the corporation to perhaps set up some sort of an agency that could perhaps intercede on behalf of individual clients who feel that they had been hard done by even if this may not have been legally the case, not c4l jure but more like de facto, if you understand what I mean? *

(1130) Mr. Thom pson: The corporation does have a Customer Service Department that attempts to deal with all kinds of complaints that are raised. Your comment, in the earlier part of your questioning referring to user friendly, that is an excellent term. lt

Tuesday, November 1, 19 88 is one tha t I, just a few min utes ago, tried to explain in terms of our comm uni cations program with the publi c for 19 89 and well into the futur e. There are a numb er of thin gs tha t the corpora tion is proposing to do in tha t communic ations program tha t should minimi ze the kind of concerns, whether it be time payment or other thi ngs. We have a prog ram getting ready to go into effect for the 19 89 year tha t will make the corpora tion, in the minds of the people, mu ch mor e user friend ly. You will see the results of it as the next few months develop. Mr.

Herok:l Driedger: On the same topic of user friendly then , in one of the summar y statements made in the Kopstein Report dir ectly relati ng to the fact that there is a perception in some in stances tha t adjustors tend to apport ion liabili ty equally to both parties sim ply to try and either to- I do not kn ow what the motiv e might be- but they have the percept ion tha t the actual appor tioning of fault or the appor tioning of liabili ty has not been fairly done. Is this same kind of com munic ation going to be add ressed in this prog ram tha t you are talking about, Mr. Thompso n? Mr.

Thompson: lt is constantly being add ressed. Your first statement is wrong, tha t there is undue in fluenc e in the shari ng, in the shari ng of risk. The complaints, in that order, have been less than 1 percent to 2 percent. Mr. Herold Driedger: A point of clarifica tion, I did not mean to ind icate that this was. I am just reading from the summ ary statement tha t th ere is no evidenc e of such a policy but there sometime s tends to be a perception. That is the only thing I am add ressing, the public perception.

If your communi cation program is going to add ress that, then this is exactly what I think is necessary. Mr. Thompson: Yes. Mr. Herold Driedger: I do not mean to imply the other your correction as it were. I have one mo re question of the Mi nister. The Kopstein Report, if I und ers tand Mr. Thom pson corr ectly , indic ated tha t- Mr. Chairman: Mr. Driedg er, before you have the question, did Mr. Thompson want to reply to your last comments? Mr. Thompson: We do have a prog ram to cover that. lt will be coming up. Mr. Chairman: Go ahead with your qu estion Mr. Driedg er. Mr.

Herold Driedger: Just in my own mind, the reserves tha t were referenced to be some thing of 15 percent of premiums, would it be fair if I were to ask, does that have a simi lar relationship to a debt equity ratio of a normal corpora tion, tha t 15 percent, where you have 85 percent liabil ity as oppo sed to 15 percent reserve equit y? Mr.

Thompson: No, it ha s no relationship to the debt equity. lt is simply a Rate Stabili zation Fund or a capital- 127 type requirement that even private insu rance compan ies mus t have, but the recoml)"lendation by the judge in hi s report, is tha t the level requir ed for MPIC should be slig htly less than half tha t requi red as a minimum for pri vate corpora tions, but it is a capit al-type thing. Mr.

Herold Driedger: Foll owing up on tha t then , just how does the corpora tion handle a situation then, if you did not have this adeq uate level of reserves, and you had your series of dis asters, if you want, where your reserves were entirely used up and you had another large similar liabili ty to have to cover, where would you go then to make up the shortfall? Mr.

Thompson: Ultima tely the shor tfall would have to be hand led from two sou rces, in creases in premium rates over a period of years to replenish the deficit back to at least a zero or a positiv e posi tion, or the Government of the Day in its wisdom, if, as and when it ever happens, is the ulti mate sou rce. Mr. Herold Driedger: All right, I will pass on questioning because the debt equi ty, this reserve does not match up qui te either way I was look ing at it. So I will just pass on it. Mr.

Carr: I would like to conti nue on the theme of customer relations and the notion of service to the motori ng public of Man itoba. Could one of the seni or officials tell us how many complaints were received by the corporation in 19 87? Mr. Thompson: My un derstanding is tha t there were about 80,000 complaints of a variety of natur e, and some were probably not so much in the area of complaint but in the area of getting in form ation and cla rifi cation. Mr. Carr: Eig hty thousand complaints in 19 87, or inquir ies?

Let me follow up and ask if the corporat ion has categ oriz ed the natur e of tho se complaints, and tell us what they are. Mr. Thompson: I think the 80, 000, tying it to complaints is an error on my part. That is, the Customer Service Department hand les all of these telephone calls and letters and many of them are for clarifica tion and informa tion. Yes, the results are categorized and I would ask Mr. Kidd if he could gi ve some of the major categ ories. Mr. David Kidd (Sen ior Vice-President, Ins urance Operations): I do not have any documentation with me toda y tha t ind icates specifics of them.

I would say th at in this past year there w as a sign ificant in crease in inquiries to our Cus tomer Servi ces Department rela ting to two prim ary issues, one bei ng the in troduction of the merit program . Many , many mem bers of the public were phoning and inqui ring about how it worked and how it operated , and, yes, in deed there were some concerns over the equity of the merit prog ram. The second issue was of cou rse the introduction of the thir d payment on time payments. There were a lot

Tuesday, November 1, 19 88 of people asking qu estions and inqu iring just how tha t worked . Those two issues alone, plus public irritation over rate incr eases, caus ed a sign ificant in crease in inquir ies and activ ity from the public this year in our customer services area. Mr. Carr: Perhaps tha t figur e would be even mo re astonishing if we had some context in which to comp are it. Do members of the corporation have figur es for 19 86 and 19 85? What is the trend line? Are people becoming mor e agg ressive in their com mun ications with the corpora tion?

Is this staggering figur e an aberration of one year or has the corpora tion been su bject to this kind of barrage of unh appi ness from the public for a num ber of years? Mr. Kidd: The normal level, I am just advis ed, wou ld be about 50,000 a year, inqui ries through the Customer Services area. That increased this year to about 80,000, as I ind icated primarily in another program, the rates and the ... . (The Acting Chairman, Mr. Ha rry Enns, in the Chair .) Mr. Carr: lt is nice to see you in the Chair looking so bright and fit. The Actin g Chairma n (Mr. Enns): I mus t apologiz e, Mr.

Carr, to comm ittee mem bers. I had a little discussion with some cows this morning who were particu larly obdur ate. lt caused my delay in attending this im portant occasion. * (11 40) Mr. Carr: One would not want to un derestim ate the power of obdur ate cows. With a further question to Mr. Kidd, I gu ess. A qu ick calcula tion reveals then that there has been a 60 percent incr ease in complai nts or inquir ies from the public over a one-year period, from a normal of 50,000 to a 19 87 level of 80,000.

Wha t is the corporation doing in a posit ive way to not only deal with these complai nts as they come in one on on e- 1 imagine it mus t be an enormous burden-to take away the sou rces of ir ritation tha t have created such an in credib le backla sh and concern in the com mun ity? I gue ss question No. 1 would be, how many emplo yees of the corpora tion spend all or some of their time handling these 80, 000 complaints? Mr. Thompaon: I do not think the numb er of empl oyees handling the complaints is the issue.

The issue is the fact tha t the change in the program created the 60 percent incr ease or mo re in the merit program and the related thin gs. What the corpora tion does and has to do is, No. 1, always be prepared to answer the phone and handle inqu iries, handle complaints. lt is part of the service aspect of the organiza tion. Whether that goes from 60,000 to 80,000, for whatever the reason, we must always be geared to handle those complai nts and those inqu iries and handl e them effectively.

In terms of mi nimi zing the inquir ies, our communic ations prog ram for 19 89, hop efully we will 128 do tha t in the sense th at the motoring public will have the opportun ity of being much more informed about their coverage and about their rates and the things tha t go on thr ough the brochur es and having their Autopa c guide giv en to th em at the time they pay their in surance premium which has not been done in the past. Mr.

Carr: When the volume of inqu iries or complaints or whatever you want to call them rises in one year from 50,000 to 80,000, then one of two thin gs has to happen: either mo re people have to be given the responsi bil ity of handling tho se complaints, or the custom ers who are aggrie ved have to wait longer to have tho se complaints listened to. Whi ch is it? Mr. Thompson: I am sorry, I did not catch the last part of that. Mr.

Carr: When the numb er of complaints rises as drama tically as it has over the past year, either more emplo yees of the corpora tion have to be gi ven the responsi bil ity of handling tho se complai nts, or the people who are complaining have to wait longer for th ose complaints to be dealt with? Which is it? Mr. Thom pson: More emplo yees are put in place in order to handle the inquir ies qu ickly and satis factori ly. Mr. Carr: How many more emplo yees have been reassigned or hired in the Customer Service Department to handle these 80,0 00 complai nts? Mr. Thom pson: David, perhaps you should answer. Mr.

Kidd: We offloaded a numb er of the inqui ries and complaints to dir ect lin e areas in the past year. In other words, if there was a rate issue, we offloaded the inquir y to the Autopa c Servi ces Department. If it was a time payment issue, we offloaded it down to the accou nts people. We want to bring all of th ose inqu iries back to the central Customer Servi ces area in 19 89. We do antici pate, through our com mun ications prog ram in 19 89, tha t th ere will be less inquir ies than the 80,000.

We have, however, bud geted for an incr ease in staff in the Customer Servi ces area to bring the staff levels up to where we believe will be req uir ed to adequa tely add ress all of the inqui ries within the right time frames. Mr. Carr: Th ose of us who sit in Op position receive letters and telephone calls li terally everyda y from customers of M PlC who have a complaint or an inquir y. I wonder if Mr. Kidd could inform the comm ittee how many complaints MP IC has received over the issue of im position of $20 late fee charges at the end of August. Mr.

Kidd : I do not have an exact count, but there have been nu merous complai nts. Mr. Carr: I wonder if Mr. Kidd would agree to find ing out the exact numb er and writing a letter to mem bers of the commit tee to inf orm us of just how ma ny that would be. Mr. Kidd: I will agree to provide an estimate of the num ber, yes.

Tuesday, November 1, 19 88 Mr. Carr:- Okay. I am interested in broad categ ories and the nature of these compla ints. We und erstand tha t because the system cha nged qu ite dramatically in February of 19 88, there were questions about the merit system, there were qu estions about surch arges, and there was some considerable adjus tment not only for the corporation but for its customers. Beyond that, I wonder if Mr. Kidd cou ld provide us with major categ ories of complaints th at are received from customers of MP IC. Mr. Kidd: As I indic ated earli er, I do not have a list with me of the major areas.

We have them all identified and I would provide that inf ormation to the mem bers of the commit tee at a later time. Mr. Carr: Mr. Acting Chai rperson, I do not want to push this beyond what is reasonable, but I think something very impor tant has come out this morning. lt is no secret to th ose of us who everyday deal with the citi zens of Manitoba who have had problems with M PlC. Wha t is im portant, I think, is to look to the futur e to find ways of minimi zing these numb ers of complai nts.

Judge Kopstein makes several recommendations within his report that talk about com mun ication with the publi c, printing of brochur es so the publi c is better inform ed, systems whereby th ose who have problems with the corpora tion can air tho se prob lems. We think tha t it is a mis take for the Government to take away the oppor tuni ty for Manitobans to speak dir ectly to the corporation at the annua l meeting once a year. But 80,000 inquir ies, many of which are complaints, to a monopoly public corpora tion gives rise to the whole question of service.

I wonder how many of th ose inqui ries are related to service that mem bers of the motoring public receive from M PlC. Would it be possi ble to isola te tha t figur e? Mr. Thompson: Mr. Kidd has ind icated tha t he will supp ly, in writing, to the mem bers of the comm ittee the information breakdo wn on the inquir ies by category. Mr. Carr: Thank you. Mr. Steve Ashton (T ho mpson ): Mr.

Ac ting Chairp erson, I have a series of questions tha t relate to a concern tha t I kno w was raised at the Kopst ein hearings. lt has been raised in the past, and it is a particular concern , I know, outside of the City of Winnip eg. Tha t is in regard to the current rate zone structure that we have for Autop ac. We currently have four rate zones which treat people di fferently in terms of the insu rance they have to pay for the same vehicle depen ding on where they are resident in the province.

In the Kopst ein Report , th ere appears to be mix ed news for tho se of us who have been urging tha t we adopt a system simila r to the situa tion tha t occurs in Saskatche wan, as I unde rstand it, where there are no rate zones in place. I would in fact go even further and say even if we are not to mo ve away from a rate zone structure, we certai nly need a comp lete overhaul of the current rate zones because there are some real anomalies. I kno w for example in the North, Thompson pays more than The Pas and Flin Flon because it is in 129 the north of 55 zone.

The Pas and Flin Flon pay more than com mun ities south of 53. There are all sorts of anomal ies within regions. Brandon, which is a major urb an centre, is treated in the ru ral rate-zone area. lt is twice the size of Thompson, and yet it pays less than people in Thomp son do. I am sure there are concerns within regions as well. I know th ere are people in the northern region, in Th icket Portage for example, there are th ree cars and yet they pay the hig hest rates in the province. There are all sorts of anomal ies tha t do exist.

As I said, the Kopstein Report seems to ind icate some continued supp ort for a rate-zone structure which is di sappo inting for us- there are concerns about this but on the other hand, did call for review of the cu rrent rate zones in place to determine whether they were equitable both within the rate zones and whether there should be an overall restructuring. My qu estion is to the Min ister and th at is, does the Min ister suppor t the Ko pstein recommendation, which I un derstand wou ld have a review take place prior to the end of 19 89 of the current rate-zone structure?

Further, does the Min ister believe tha t Auto pac should have differential rates appl ied, depending on where you live in the province? Mr. Cummings: Discussion of that rightly will flow from the management decisions within the corpora tion up through the board in terms of making a judgm ent on whether or not they want to deal with the rate setting in terms of regions or in terms of differential rates tha t are related to the location of the vehi cle. Certain ly, part of tha t becomes the usage in the zones arou nd the larger centres and so on.

Tha t is not a polic y directive tha t I am prepared to giv e the corpora tion. I will be waiting to see what their in ternal di scussions lead to in terms of whether or not they will be making any recommendations. Mr. Ashton: I am a bit di sappointed actually, specifical ly gi ven the fact tha t the Kopst ein Report does have recommen da tions tha t at least would look at the analysis of the rate zone. I kn ow the Min ister ind icated that a good numb er of rec ommenda tions of the Kopst ein Report are bei ng ado pted without any further consid eration.

Is tha t recommenda tion one of the recommendations tha t will be adop ted, tha t is, an anal ysis of the rate-zone structure? Mr. Cummings: I did not ind icate that it was not being consid ered . I ind icated tha t it is one of the recommendations tha t the corporation will be studying and tha t the board will be examining. That, I think, should ind icate to the Mem ber tha t the corpora tion is open to all sugges tions, as is the Government, in terms of im provi ng this service to the drivers of the provi nce.

I would suggest tha t after the corporation has had a chance to look at the ramifica tions of it and the board has had a chance for dis cussion that an oppor tuni ty will then be made for the decision-making process to proceed . Mr. Ashton: The reason I raise this is because I think it, once again, is one of tho se types of issues that gets

Tuesday, November 1, 1988 to the question, the very mandate of MPIC and the Autopac Division. We just recently, for example, moved away from discrimination in terms of age, which had been in place previously, whereby younger drivers paid a far higher rate for Autopac rates than those over the age of 25. A lot of people, I think, certainly in the North feel this is a similar sort of issue. They feel that it is discriminatory that they should pay more based on their area of residence. 1t does not matter how good a driver they are.

Compared to a similar driver with a similar vehicle in another area of the province, they pay more. As I said, in the case of north of 55, they pay more than even other northern communities in the case of The Pas and Flin Flon. There is a lot of concern about how fair that is. is the Minister saying tha t he is not willing and his Government is not willing to look at this issue in the context of the mandate of MPIC? Is he not willing to even state his own opinion right now as Minister as to whether it is fair for Northerners, in particular, to pay more for their Autopac than other residents of the province? *

(1150) Mr. Cumming lii: Two things, Mr. Acting Chairman. First of all, it is not something that should be compared to discrimination on the basis of age and sex. That is a human rights issue that certainly is separate and apart. Seco ndly, the PUB, as they have an opportunity to go through the rates and examine them in the way to making approvals will, I am sure, have an opportunity to hear discussion and presentation both pro and con in the relative fairness of this present system. Mr. Ashton: One final comment, I do hope that the Minister would study this.

I realize it would be easy to just say it is not the same as the question in terms of age, for example, but I think there are some elements which are similar.

We are talking about a situation in that particular case as to whether you treat drivers the same and then judge them perhaps, based strictly on the type of vehicle they dr ive or their driving performance, which is what has happened in terms of age. lt seems to me tha t the principle is the same in terms of the area in which one resides because what really, i think, annoys people -and they do view it as discrimination-is the fact it does not matter if you are a perfect driver, you have never had an accident, simply by the fact that you live in northern Manitoba, you pay more than people in the rest of the province for insurance.

The Mem ber asks why I am not doing something about it. I have raised this in the past and I know the Kopstein Report is a good opportunity for us to consider these types of issues. I can tell you , one of the things that came out, I know, when the rates did increase this past time was there was a compiete reanalysis of the Autopac system by the general public. People perhaps had accepted something in the past and were no longer willing to accept the way the corporation was structured.

That is what the Kopstein Report is all about. 1 30 I guess my plea to the Minister would be that he would look at this issue, and it has been raised by people of all different political persuasions in northern Manitoba. it is no! a political issue. !t is something I think pretty well everybody in the North agrees to and I know it is an area of concern in some rural communities as well in terms of the rate structure. I would hope that he would consider our concerns. Mr. leonard Evans: Mr. Acting Chairman, I have one last area that I wish to discuss, and that is the General Insurance Division.

I would like to ask first of all perhaps I should give a bit of background. In the meeting held of this committee on Thursday, October 20, on page 73, with regard to this question of genera! insurance and the possibility of carrying it on, we all know it has lost money, but we are also advised that there has been a substantial, significant turnaround in a profit situation in the past with the last statement of the first nine months of this year.

The Minister led me to believe that we were looking at all options and indeed he does say on page 73, "The Member should not make any assumptions other than the statement that I have made that I am prepared to view all options," and I welcome that statement by the Minister. Also, in asking a similar question of Mr. Thompson, the chairperson of the board, Mr. Thompson stated !his, "Wha t the board did was ask management to analyze the general insurance operation in al! its phases and to consider and look at several options.

Option No. 1 tha t was sug gested was continuation and revitalization of the general insurance operation; that is, continuing in the general insurance field, but on a basis that had to be profitable because we could not continue having a deficit that provides negative income.

The process was to look at costs, to look at the marketing aspect, to look at claims, to look at the degree of social policy that had to be made, that may or may not or should be involved, to make the general insurance a profitable and practical one for the people in Manitoba." So tha t was fine and we had th at as a clear understa nding that the board indeed was looking seriously at that option. A shor t time after this committee adjourned on that day, Premier Fiimon stated publicly through the media that MP!C would be getting out of the general insurance field, period. Mr.

Acting Chairman, that is obviously a clear category called contradiction as to wha t the Min ister and th e chairperson of the board were telling us. My question is to the chairperson, Mr. Thompson. Has the Premier (Mr. Filmon) since this day, Thursday, October 20, ordered you or your officials in writing or verbally to stop your review of the options, particularly this option that I have just referred to? Mr. Thompson: No. Mr. leonard Evans: Mr. Acting Chairman, then, is Mr. Thompson at all guided by this public statement by the Premier?

The Premier has not communicated with him directly on a one-to-one basis, nor has the Minister perhaps. Is Mr. Thompson going to be guided by this

Tuesday , November 1, 19 88 public statement in this respect or is he going to carry on as he ind icated last Thu rsday? Mr. Thompson: I only became aware of the statement this morning and have not giv en it any thought at all. I just cannot make a comment at this stage. *

(1200) Mr. Leonard Evans: I am not clear what the corporation is going to be doing. Mr. Thomp son said he has just heard about it and he has not gi ven it enough thought. So this is a question of wheth er, I suppos e-1 do not kno w where this line of political inter ference comes or whatever -b ut who is in ch arge? I wou ld gather then tha t we are in a state of suspended anima tion, I sup poSe. We do not really kno w what the board of MP IC is going to do. I do not think the Premi er (Mr. Filmon) was fair, incid ental ly, to Mr. Thompson or the corporation or the Minis ter.

There is nothing wrong with looking at all options-tha t is a rational thing to do- but for the Premier to abso lutely contrad ict the Min ister and the chairman, and I feel sorry for both of the gentlemen. I think he has emb arrassed everyone in tha t respect. I do not kno w what to take from Mr. Thom pson's answer-whet her they are or they are not going to cont inue to look at th ese options of the general in surance. Mr.

Cummings: The Mem ber I do not think has acknowledged tha t during the electoral campaign it was our polic y tha t we wou ld be withd rawing from the general insur ance side of the corpora tion. There are a multipl icity of options tha t are available to the Government in tha t process. We do not want to put ourselves in the posit ion, and I am sure none of the mem bers of the commit tee want to be causing and I attempted to cha stise the Member for Fort Rouge (Mr. Carr) in the House one day in terms of creating concern in the minds of the empl oyees.

I think tha t we have to be very clear that any dir ections tha t the corpo ration will be moving within the policy of this Government, tha t we will be very cogn izant of the requir ements of the staff, requir ements of the insur ed public, and that we are not making any preci pitous moves at this time. Mr. Leonard Evans: I thank the Min ister for his statement. I would like the comm ittee to take a position on this. I have a motion, and I have copies of my motion. lt includes a couple of WHERE ASes. Permit me to read them because tha t will in effect explain the motion.

I move THAT, WHE REAS the General In surance Division of the Manitoba Public Insu rance Corpora tion emplo ys 55 people in Brandon, a major emplo yer in tha t communit y, and nearly 100 empl oyees in Winnip eg; and WHERE AS the General In surance Division has made a profit of $ 1. 4 mill ion in the most recent recorded period; and 131 WHERE AS there is widespread supp ort for the General Insur ance Division both in the community of Brandon and the popu lation at large; TH EREFORE BE IT RESOL VED tha t this comm ittee request the provi ncial Government to cancel plans to sell off the General Insur ance Division of MP IC; and BE IT FURTHER RESOL VED tha t the comm ittee call upon the provincial Government to assure residents of Brandon and clients of the General Insur ance Division of M PlC tha t it recogn izes the im portant role the General In surance Division has pla yed in pr ovi ding insur ance for organizations in groups tha t could not have other wise operated .

Mr. Acting Chairman, tha t is my formal motion. I have several copies. Maybe the Clerk would like to di stribute them. I think my WHERE ASes more or less gi ve the argu ments for the motion. I could have had ju st the motion , I sup pose, without the WHERE ASes and then ma ke the argument, but I think the WHERE ASes ma kes the ar gument. I think it is self-explanato ry.

I would hope tha t mem bers of the commit tee, they ma y wish to di scuss the mo tion, but I wou ld hope tha t I could get the supp ort of the mem bers of the comm ittee which would therefore be a recommendatio n to the Government, a request to the Government to cancel these pla ns. Mr. Storie: I think this is an excellent mo tion. I think it behooves the comm ittee to adopt the moti on.

Clearly, I think where the WHERE ASes ident ify the problems, ident ify the concerns, and I gu ess in sup port of my col league's motion I have to say tha t kno wing with a great deg ree of certainty tha t there are commercial enterpris es in rural and northern Manitoba who rely on the General In suranc e Division for sup port and coverage where there are virtually no options and certai nly no options tha t are nearly as reasonable in terms of both the coverage and the costs. This has to be maintained. As my colleague sugge sted, we are not denying the Government, the corpora tion.

In fact, we encoura ged both of th ose to review the operations of the General Insur ance Divi sion , but it has become an essential service for many Manito bans. We cannot have the kind of unc ertaint y tha t has been created by the Min ister and mor e appropria tely, the Premi er, because of his ideolog ical hang-ups, because his commitment to election promis es that were silly, hanging over the heads of the people emplo yed by the General In surance Division, particularly in Brandon, or by the polic yholders, the Man itobans who need this kind of enterprise. Ther e are ways to impr ove its operations.

We have heard in commit tee this Ses sion tha t the operations of the General Ins uranc e Division are impr ovi ng. Certainly there is a potential for them to impr ove further. There are further refinements and perhaps chan ges tha t could be made to add to that. But there is no way tha t the people of Manitoba want this Government to elimi nate the General In suranc e

Tuesday, November 1, 1988 Division. They do not want it. lt is counter to the mood of the public of Manitoba, and I think certainly its impact on a community the size of Brandon will be significant. I feel quite confident in saying that the Mayor of Brandon, the Chamber of Commerce in Brandon are going to support the maintenance of the General Insurance Division. The Minister's qualified assurances that, oh, we will look after the employees and we will concern the policyholders is not going to wash. We have seen that MPIC, the Automobile Insurance Division, get some credit from the Kopstein Commission.

I have no doubt that the General Insurance Division would receive the same kind of recognition were it given the opportunity to explain its benefits. Certainly, like as I said, there are many people, both individuals and commercial enterprises, who rely on it. This is a good motion. I think it will send a strong, clear signal to the people in Brandon, to the people in Manitoba who believe that this is an important aspect of the insurance portfolio of MPIC and there is no way that they want that undermined, and undermined in a cavalier way.

The political commitment that was made during the elec tion, and one that the Minister I think quite rightly tried to back away from but his First Minister (Mr. Filmon) would not let him, is perhaps ind icative. The Min ister understood perhaps the importance of it more than the Premier, and that is a sad fact. The Minister now has an opportunity to be, I guess, a leader in this respect and to agree with the committee and support this res olution, support the maintenance of the General In surance Division. Hopefully, he will this time take a stand in the interests of those Manitobans who rely on this service.

I am sure the Minister has had a chance to talk to other businesses who would tell him, even in the Inner City of Winnipeg, that if the General Insurance Division of M PlC was no longer within the public domain, that their fees, their insurance policy premiums would skyrocket. lt has had a modifying effect in terms of policy prices across the board. lt is too important to let go, so I think it deserves support and I know that my colleagues across the table are going to have to make up their minds about where they stand on this issue. The Acting Chairman (Mr .

Enn s): Committee members, the Chair makes a few observations with respect to the resolution or the motion before the committee. Traditionally, the role of Sta nding Comm ittees such as the one we have assembled here to examine the Ann ual Report of, in this ins tance, the Cr own corpora tion, the Manitoba Public Insu rance Corporation, our committee structure does not in itself or has not had the practice of initiating Executive Branch action.

By that I mean action that com pels a Government to follow a particular course of path, or indeed imposes on a Crown corporation, in this case the Manitoba Public Insurance Corporation, a particular course of path.

As a rule we gather to examine the previous year for which the Annual Report is placed before us, 132 hopefully, for constructive advice to the corporation in case, in this instance the Manitoba Public Insurance Corporation, and indeed there are instances that I am certainly aware of, where, because of lack of satisfaction with the performance of a particular corporation, final appr oval for a report is withheld by commit tee members. That is all part of the tradition and the history of these kind of committees.

What I see before me takes the committee role one step forward and I si mply wish to put on the record for all members, particularly new members of the commi ttee, that the y are aware the y are, in my judgment, making somewhat of a departure and indeed as rep resen tati ves of their particular polit ical associations and groupings within the House, their actions would of course have a tendency of portraying that group's will on a particular question. I have some tendency to suggest that inasmuch as the motion is phrased as a request, if I may read that operative portion, "THEREFORE

BE IT RESOLVED that this committee request the provincial Government to cancel plans to sell off the General Insurance Division of M PlC," members may and the Chair may well agree that this is an expression of the committee, not an executive order as I sugge sted, which I have difficulty in accepting the fact whether or not the committee is empowered to do so, but I raise that to Honourable Members' attention. The normal procedure, normal tactics of various committee members who have the responsibility of examining Annual Reports of Crown corporations have various different options open to them.

They can pass strong censure motions of a particular action taken by a corporation, they can in their examination, as indeed the Member for Thompson (Mr. Storie) just has, suggest different policy directions for a corporation that the individual member feels is in keeping with the best interests of the general public. All of these kinds of activities are, in the Chair's estimation, acceptable practices of a Standing Committee of this nature. I am at the will of the committee. I would open the discussion to further discussion by members.

I should also indic ate of cour se tha t all motions before committees of this nature are open to amendments. I just want to put those thoughts and concerns on the record. Mr. Carr: I wonder if you could just for a moment clarify your advice to the committee, your ruling that this motion is indeed in order. The Acting Chairman (Mr . En ns}: With the understanding that I place heavy emphasis on the word "request" contained in the motion, I rule the motion in order. Mr. Carr: In that case, I would like to amend the motion. I would move that we take out the third WH EREAS. The third

WHEREAS is a public opinion poll not backed up by any evidence. The Acting Chairman (Mr. Enns): Mr. Carr, could I just make one further sugge stion to you and to indeed

Tuesday, November 1, 19 88 any other Mem bers of the Hous e. All motions mu st be in writing to the Chair . They can be just handwrit ten out. Mr. Carr: Like you, we received a copy of this motion at the very end of the comm ittee's deli berations with in fact a half an hour to go, un fortuna tely. So we wou ld move an amendment that- The Acting Chairman (Mr. Enns): The Chair is patient. Mr. Carr: Good. Tha t is the Chair's reputa tion.

That we remove the thir d WHERE AS and tha t in the first TH EREFO RE BE IT RESOL VED we amend it to read: BE IT RESOL VED THAT this Commit tee request the provi ncial Government to study avai lable options with particula r attention to the in terests of Manitob ans who may not otherwise obtain ins urance. The Acting Chairman (Mr Enns): Could I ask the comm ittee mem ber to read tha t onc e agai n? Mr.

Carr: THEREFORE BE IT RE SOL VED tha t thi s Comm ittee request the provincial Government to study av ailable options with parti cular attention to the interests of Manitobanswho may not otherwise obtain insu rance coverage. The Acting Chai rman (Mr . Enns): While the amen dment is being written out, for further in forma tion to comm ittee mem bers, it is my un derstan ding tha t we would open di scussion on the amend ment as placed before us by the Memb er for Brandon East (Mr. Leonard Evans) and it will then be voted on.

I am sorry, my advice from the staff is tha t we have to dis cuss and deal with the amen dm ent in the first in stance and then, if requir ed, deal with the motion th at is then left before us. If of cou rse the amended motion is passed by this commit tee then we have no main motion. Then the original motion has been amended. Mr. Thompson: I think the first parag raph should be adju sted to show 55 as being 30; and 100 in the next line being 70. The Acting Cha irman (Mr. Enns): Does the mover of the motion accept tha t correction for the sake of accuracy? (Agre ed) Mr.

Thompson: These are the num bers of empl oyees in Winni peg and in Brandon who deal with the personal lin es and commercial li nes and to some extent in Winnip eg the reassurance assumed . But you can leave it as is or whatever. Mr. Leonard Evans: I am a mem ber of this comm ittee and I app reciate him giving us data, which is fine. I just want to point out that I did check out and I was told there were 55 people. No w maybe it is a definition of who is work ing on what but I was assured just a 13 3 couple of days ago it was 55. But whether it is 55 or 30 or whatever, it is the principle.

The principle remai ns the same. I have expressed a concern for the emp loyees. I also expressed a concern in this motion for the polic yholders, particularly small busine sses who have told me the y cannot get in surance at other priv ate compan ies. They have ind icated they themselves would go out of busine ss, and also I kno w in northern Manitoba, in rural Manit oba, there are di fficulties. The essence is tha t if the Premier (Mr.

Filmon) had not made his statement I suppose maybe this resolution wou ld not be before us, but he is determi ned tha t we are going to sell this thing off and I believe, I ag ree the re have been motions in the past. We should both look at Hansard , but I am sure there have been motions from time to time. We are of cou rse in a dif ferent situation of a mino rity Government and this is a vehi cle, this is an excellent op portun ity for Mem bers of the Opp osition and others on the comm ittee to actually take a position on this. lt is a method of getting a message across. The Acting Chairman (Mr.

Enns): I regret to in terrupt you, but simply to clear up, is it the Memb er's wish to proceed with the motion as placed, or is he accepting a change of num bers? Mr. Leonard Evans: I am opposed to the amen dm ent, and I can explain why. The Acting Chairman (Mr. Enns): Okay, then can the Chair di rect any further di scussion to the amend ment and to the amen dm ent only at this point? The motion before us is that we amend the original motion as presented by Mr.

Evans to read tha t we delete the third WH EREAS and change the wording that is now before us and before the comm itte e TH EREFORE BE IT RESOL VED tha t this comm ittee request the provi ncial Government to study available options with particular attention to the int erests of Manitoba insur ers- I am having difficulty reading this who might not otherwise obtain ins urance coverage. I think we und erstand the amendment before us. I will entertain dis cussion on that amend ment -Mr . Ashton. Mr. Ashton: On the amendment, I find we are in a very strange situation here.

I comment on the comple te absence of Con servat iv e Memb ers, Go vern ment Mem bers, during an im portant commit tee heari ng. There is only yourself, Mr. Acting Chai rperson, and the Min ister here, so we are in some rather un usual circums tan ces when we deal with this motion.

What surpris es me perhaps even mor e than the absence of Government Mem bers is tha t the Li beral Opposi tion is essentially putting forward amen dm ents I think the Tories wou ld have put forward if they were here, because essentially the amend ments talk about studying avai lable options which , as I unde rstand it, is the buzz words tha t the Mi nister uses to describe the fact tha t he and his Government are still looking at priva tizing the General In surance Division of MP IC. Our position in the New Democratic Party is tha t we feel a clear signal has to be sent th at we are not going

Tuesday, Novemb er 1, 1988 to pr ivatize the General Insu ranc e Divis ion. The resolution itself points to the fact that it is currently making a profit and it is going through a turnaround at a time when the services are still needed for other reasons as well. As the Member for Brandon East (Mr. Leonard Evans) pointed out, it is still a major service to people, I know in the North, I know in the city as well and the many rural areas, to people who cannot get insurance in any other way, shape or form, so the intent of the resolution was to say a clear signal should be sent that there should not be privatization.

Quite frankly, I am surprised that the Liberals are bailing the Government out on this. As I said, this is the absolute amendment that I would have seen the Tories introducing if they were here, if they took this committee hearing seriously enough. I would hope that what we do is we deal with this resolution, put it to a vote, see what committee members that are here have to say about this. *

(1220) I would like to register my particular frustration and the fact that this Government again seems to take the proceedings of the Legislature and its committees so lackadaisically. I do not know who is responsible for ensuring that people attend committees but I am sure you, Mr. Acting Chairperson, have a list of Government Mem bers who are suppo sed to be atten ding this committee hearing. Now where are they? Why are we dealing with the committee hearings with a complete absence of the Government caucus? I think we should send two clear messages today.

One is to pass the motion and the second one to say they were very frustrated by the-and I would use this word and I do not use this word lightly, but the incompetence of this Government. For six and-a-half years, I saw them talk about how if they were just in, the trains would run on time. Well they cannot even get enough Members to attend a committee hearing. I think that is a pretty dismal performance on their part. Mr. Cummin gs: I can appreciate the mood in which the Member for Brandon East (Mr. Leonard Evans) put this resolution forward.

But quite frankly, when we look at the recommendation, even of Judge Kopstein, where he recommends that the special risk extension be returned to Autopac where it was orig inally taken, that leaves the personal and commercial lines of the general corporation without visible means of support that they have been receiving from the SRE over the last number of years. That leaves the people of this province, it leaves the Government of the Day with the question, does more money come forward to reserve this kind of a corporation that continues to write red ink?

When we see that we ha ve just written off some $59 million in accumulated loss in this part of the division, I think that the Government of the Day has to be responsible and responsive to the people in the province when they say that there has got to be an end to the kind of losses that have been accumulated.

The SRE part of the corporation has been coming along and showing a profit on a reasonable basis the last few years and has in fact been supporting the general division to a large exte nt. 134 I think my first reaction is that the motion is out of order, but recognizing fully that we are a -(lnterjection) without any reflection on the Chair, if I might add that.

I said, my first reaction would be- because it seems to me that we are here to examine the year report and we extended that to take a look at the Kopstein Report so that there was an oppo rtunity for the committee Members on both sides of the House to have questions and answers regarding the direction that we were taking and that the corporation would be taking in relationship to the Kopstein Report.

The amendment which has been brought forward, in fact, does indicate to the Government something that we have been stating all along which is very simply that we are not going to take precipitous action without first of all having a good deal of thought and concern regarding the future of the employees and the future of the insured. The fact that the Government has made that commitment, has made it continuously, suggests that really what we have is a statement of reason.

So while I would think that the committee has put itself in a position where it is not dealing with this issue in a manner that normally flows from these types of committees, I can accept the fact that if it is the will of the committee that they wish to put forward this type of an amendment, that it will be a cautionary note that they will send forward. The Acting Chairman (Mr . Enns): Any further discussion on Mr. Carr's amendment? Mr. Carr: I would like to speak to the amendment if I could, Mr. Acting Chairperson.

I think it is incredible tha t the Mem bers of the New Democratic Party continue to stretch propriety and the Rules of this House and of this committee. They brought forward a resolution which the Chair tells us is unusual and out of the ordinary one half an hour before the end of this committee's deliberation. The Chair has ruled it in order, so we on our side feel an obligation to deal with it. The position of our Party has consistently been that there ought to be studies undertaken to determine the social responsibility of the General Insurance Division. There has been no change in that policy, Mr.

Acting Chairman, and we do not anticipate that there will be a change of that policy until the necessary information is brought forward. Now we understand that the Premier (Mr. Filmon) has said on the record that the General Insurance Division ought to be sold, and to maintain the General Insurance Division is not an option.

If Members opposite will look at the amendment proposed by the Liberal Party, they will see that it is a substantially different position than the one expressed by the Premier. 1t requests that the Government study available options with particular reference to those Manitobans who cannot otherwise achieve insurance coverage. That is a far cry from limiting the options of the Government, which the Premier enunciated last week, and it is a far cry from the NDP position which seeks to instruct the Government that it immediately cancel its plans.

So I think that our amendment is a responsible amendment and deserves the support of the committee.

TUesd ay, Novemb er 1, 1988 The Acting Chairman (Mr. Enns): The question before the comm ittee is that the proposed motion by Mr. Evans (Br andon East) be amended, with the third WHERE AS reading: THEREFORE BE IT RESOL VED that this Comm ittee req uest the Provi ncial Government to study avai lable options with particular attention to the interests of Manitob ans who may not otherwise obtain insur ance coverage. All those in favour, please raise their hands? All th ose opp osed? The commi ttee has voted and has tied. I will exercise my option as a commit tee Chai rman and vote in favour of the ame ndment.

I declare the amendment carried . On the main motion, as amended. All those in favour? An Honourable Member: As amen ded? The Acting Chairman (Mr. Enns): As amended . On the main motion, as amended . Opp osed? I declar e the motion , as amended , carried . Mr. Evans, on a point of order. Mr. Leonard Evans: Mr. Act ing Chairman, you will not gi ve us an oppor tun ity to have a clear vote on my motion unamended. Would you be prepared to entertain a simple motion tha t this commit tee requests the provi ncial Government to canc el this? The Acting Chai rma n (Mr. Enns): No, Mr.

Evans, I believe the procedure is pretty clear. A motion has been properly presented by you to this commit tee. lt has been duly and properly amended by another comm ittee mem ber and the com mit tee has dealt with tha t amended motion. 13 5 Mr. Storie, on a point of order. Mr. Storie: Mr. Acting Chai rperson, just so tha t it is on the re cord tha t the Tories and the Li berals do stand together on this issue agains t the int erests of Brandon. The ame nd ment served the purp ose of the Min ister responsible. lt is a shame. The Acting Chai rm an (Mr. Enns): I am sorry, Mr. Storie.

You can enter into speeches, but I do not rule tha t as a point of order. Mr. Ashton: Getting back to busi ness, I would lik e to echo the frustra tion of the Memb er for Flin Flon (Mr. Storie), not on a point of order but in terms of the busi ness of this comm ittee, and the fact it took a combi nation of the Li berals and Cons ervatives to defeat an NDP motion tha t would have stated qui te clearly to the people of Brandon East where this Government in tends to go. We wou ld have sent a clear message to this Government they should say no to priv atiza tion.

Qu ite frank ly, I am amazed at the position of tha t the Li berals took on this. They had an oppor tun ity as well, I think, to di stance them from this position of the Cons ervative Government. Once again in the crunch, what the y have done, Mr. Ac ting Chai rperso n, is suppor ted the Cons ervat ives, suppor ted their privatizat ion of the General In suranc e Division, which is wrong for the City of Brandon and wrong for the people of Man itoba. The Acting Cha irman (Mr. Enns ): Thank you , Mr. Ashton.

We simply wish to ind icate to the commit tee, is it the will of the commit tee to pass the Annual Report of the Manitoba Public Insur ance Corpora tion? (Agreed) The hour being 12:30 p.m., this commit tee rise. COMMI TTEE ROSE AT: 12:30 p.m.

Document details

Collection	Manitoba — Debates (Hansard)
Citation	34-1-punr7
Type	hansard
Volume / chapter	34th 1st hansardpdf punr7.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	ca14e7b97258b6fed9d5b00ddc19b42c615d25d1

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