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November 21, 2012

Manitoba public insurance may invest in road construction

Manitoba Public Insurance (MPI), the publicly-owned motor vehicle insurer, wants to contribute to road construction and repair in the province.

“We are still in the very preliminary stages,” said MPI spokesperson Brian Smiley.

“We are in the process of putting together a business plan to submit to the Public Utilities Board (PUB) for approval.”Currently, it’s estimated that Manitoba has a three billion dollar infrastructure deficit, according to the Manitoba Heavy Construction Association. Smiley noted that the investments MPI are considering would not be major undertakings like bridge construction, but projects such as twinning highways and straightening roads with dangerous curves or rumble strips along the shoulder of a road.

Construction could include additional lighting at an intersection, a merge lane or a meridian.

“We wouldn’t provide all the funding,” Smiley said.

“We would be a partner. The purpose would be to improve roads, with an eye to road safety. People will understand why we’re interested in doing this if ultimately it saves in costs, in terms of claims costs, which could be reflected in lower premiums and perhaps rebates down the road.”  

Smiley pointed out that the Insurance Corporation of British Columbia (ICBC) has done something similar with positive results. The Crown Corporation, which provides vehicle insurance and registration as well as driver licensing services, introduced its road improvement program in 1989.

It splits the cost of road projects with the provincial government and various municipalities.

An evaluation of the program after two years showed a 20 per cent reduction in severe crashes and 12 per cent reduction in property damage crashes.

Last year, ICBC invested $6.5 million on more than 200 road improvement projects across the province.

There has been criticism of the MPI initiative, with people calling for the organization to return excess funds to Manitoba drivers in the form of rebates rather than use the money for purposes outside of MPI’s core responsibility of motor vehicle insurance.

There are signs though that the PUB may look favourably on the MPI submission.

For the past couple of years, the PUB has been urging MPI to take funds out of its rate stabilization fund and use the money to create a separate road-safety program for initiatives aimed at reducing collisions and costly claims.

Smiley said it’s too early to say how much MPI would invest in road projects across the province.

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