Winnipeg, Manitoba — Last Fall, Manitoba Public Insurance (MPI) and two automotive associations entered into negotiations to discuss compensation increases. However, after many months of negotiations, MPI determined that negotiations with the Manitoba Motor Dealers Association (MMDA) and the Automotive Trades Association (ATA) could no longer proceed.
And it exercised its right to terminate the industry agreement on 90 days’ written notice to the associations, effective June 13, 2021.
MPI says it will now come to compensation agreements with individual repair shops.
“Moving forward, MPI is adopting the same industry practice like all other insurers, including Crown insurers in Canada by having compensation agreements directly with repair shops. In developing this agreement, MPI reviewed labour rates and other compensation for the repair industry across Canada” said Brian Smiley, media relations coordinator for MPI in a statement to Collision Repair Magazine.
This decision has affected over 200 businesses in the collision repair industry, and many were unhappy with the decision.
“We want them to stop the bullying and intimidation tactics and just demonstrate good faith for fair compensation,” ATA’s Johnny Vernaus told Global News.
MPI says if they agreed to MMDA and ATA’s request for compensation increases, insurance rates could drastically increase, during the time of COVID-19, when many Manitobans are already facing challenging economic situations.
“If MPI was to agree to the unprecedented compensation increases demand by the associations, Manitobans would be put at risk of being exposed to double-digit insurance rate increases,” said Brian Smiley in a statement to Collision Repair Magazine. “Currently, MPI pays the second-highest shop labour rates in Canada.”
However, Craig Dunn of the MMDA told Global News that the insurer posted nearly $700-million in profit over the past four years, so they should be able to figure out a deal.
At this point, more than 100 repair and glass shops throughout the province have agreed to deal with MPI directly, said Smiley.
Adding that this new agreement should not impact customers.
“There should be little to no impact on customers. Customers will continue to take their vehicles to the accredited repair outlet of their choice,” said Smiley.
On May 7, 2021, an independent arbitrator heard the associations’ concerns in an injunction application.