More Government Pocket Picking

Blog, Canada, Publius Tacitus (historic), Transportation, Uncategorized

Following closely on the heels of a media report of the dangerous driving behaviour of many motorists in school zones, the Minister Responsible for MPI, Andrew Swan, rushed out today with an announcement that MPI premiums are to pay for increased traffic policing. (It took almost two decades before MPI’s no fault benefits were increased for those catastrophically injured in vehicle accidents, but only one day to bring in a new policy spending of premium dollars on a government service that will generate increased revenue for government.)

So, a yet to be determined portion of policyholder premiums are to be spent subsidizing Winnipeg and Brandon police services and the RCMP. Fine revenue from the additional policing will not flow to MPI, but to the Province. Costs to motorists, revenue for government, only in Manitoba some may say!

It clearly has not been enough for the provincial government to increase vehicle registration fees as they have in recent years, the increases have been multiples of the rate of inflation, with no credible rationale advanced for the magnitude of the increases. Already, policyholder premiums – and remember MPI is a government-controlled monopoly (choice doesn’t exist for vehicle owners) – subsidize the driver and vehicle licensing functions of the Province (administered, at a loss, by MPI, by the fiat of the provincial government); contribute to the City and the provincial government with respect to the anti-theft initiative; pay for the training of truck drivers; subsidize the investment functions of the provincial Department of Finance; contribute to charities and other good works that should be the responsibility of the Province; and,  subsidize the production and issuance of identification documents.

And, MPI’s large investment base, funded by unearned premiums, unpaid claims reserves and retained earnings, all developed from premium revenue, support the Province’s debt ratings. MPI’s investment portfolio is under the control of the provincial government, no surprise that MPI’s investments include significant amounts of provincial bonds, rather than looking to a more balanced approach towards producing higher returns to benefit policyholder premium rates. MPI has recently reported incurring losses due to declining yields on investment, what it doesn’t say is that the losses are due to the over-weighting of the portfolio to long-term bonds, where the losses on capital value have been approximately 8% already over this year.

The provincial government apparently ‘toyed’ with the concept of having MPI pay for road repairs and enhancements, backing off only after a significant public outcry. Years ago, the government attempted to have MPI fund the universities  and colleges of Manitoba, then backing off for a similar reason. And, over the past decade, MPI struggled against the rate regulator’s efforts, which were successful in the end, to hold on to excessive reserves rather than return the excess for policyholders.

A question comes to mind, is the operation of MPI being administered for the benefit of vehicle owners, the policyholders, or the government? Is the government conflicted in its administration of MPI? The answers to those two questions appear to be no, for the first question, and yes  to the second. As to the bad driving in school zone, of course policing should be increased, the CAA-police school zone assessment made that clear. What shouldn’t happen is MPI premium money used to do what is not only right, but is also a responsibility of government.