11/01/2012 12:01 EDT | Updated 01/01/2013 05:12 EST

Manitoba Tories accuse government of being behind insurance plan

WINNIPEG - Manitoba's NDP government denied accusations from the Opposition Tories on Thursday that it has ordered a Crown corporation to use insurance money to pay for road work. However, the government did appear to favour the idea.

"It's been developed by MPI (Manitoba Public Insurance)," said Andrew Swan, minister responsible for MPI, said Thursday.

"But I'll tell you, if they can make a good business case for it and they can show that targeted investments will reduce claims, reduce costs and help keep auto insurance affordable, this is certainly something I support."

MPI, a Crown corporation that has a monopoly on auto insurance in Manitoba, is looking at using some of its funds for road safety projects such as paved shoulders and wider intersections. The proposal would require approval from the province's Public Utilities Board.

The corporation has been looking at British Columbia, where that province's insurance agency spent $6.9 million last year contributing to government-funded road work. The Insurance Corporation of British Columbia estimates that for every dollar it spends on such work, it reduces claims enough to save customers $5.60 over two years through lower premiums.

Manitoba Opposition Leader Brian Pallister rejected the concept, saying motorists already pay tax dollars for road work and don't want to see their insurance premiums used as well. He told reporters MPI could instead use any surpluses to reduce premiums.

"Perhaps, if MPI has all this extra money, it should consider giving it to the people who overpaid."

Pallister also said the NDP government had to be behind the idea, and that any suggestion to the contrary is "naive."

But MPI spokesman Brian Smiley said there was "no government involvement" in development of the plan. It stemmed instead from a request by the utilities board for MPI to look at new road safety measures, he said.

The idea was one of several that was subject to MPI public consultations last winter. Among 1,100 people who filled out questionnaires online or in-person, 63 per cent said they agreed that MPI should help fund road safety improvements.

Swan said he has not yet seem MPI's plan, but was open to the concept.

"This could potentially save Manitobans money and also extend the ability to make important infrastructure improvements."

But Pallister said motorists already pay enough, and pointed out the government raised its tax on motor fuel by 2.5 cents a litre in the spring budget.

The government is giving MPI "responsibilities that should be faced by a government operation, a government department which currently employs over 2,400 people and has a budget of $600 million," he said.