Friday, February 27, 2009

They bought their building? Seriously?

Manitoba Public Insurance just bucked a national trend...but not in a way that will benefit ratepayers.

We're of course talking about MPI's announcement yesterday to purcahse the City Place building in downtown Winnipeg for $81.5 million. As a result, MPI is no longer just a tenant in the building, it is now responsible for being the landlord of two levels of retail space and must shoulder the risk for any capital ugrades required to the building. Further, MPI is now the proud owner of the building's adjacent parking lots.

Whatever happened to MPI's raison d'etre - to provide low-cost vehicle insurance to Manitobans.

The purchase has bucked a national trend for public sector organizations to lease their properties.

Consider a 2007 announcement by the federal government to enter into seven, 25-year sale/leaseback agreements across the country. In B.C., the government has set up an entire division to manage private public partnerships. Closer to home, the city of Winnipeg is utilizing P3 models for its new police stations and other city assets.

At this point there is no clear indication as to what MPI's recent purchase will have on rates that vehicle owners in Manitoba are obliged to pay. However, one thing is for certain, it's another great reason as to why Manitobans deserve choice when purchsing auto insurance. It's time to let MPI face competition.

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