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‘I was not prepared to delay taking action’: MPI board chair

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Manitoba Public Insurance’s board of directors voted unanimously to oust former chief executive officer Eric Herbelin from the Crown corporation after reviewing the findings of an internal investigation into his conduct.

On Tuesday, MPI board chair Ward Keith said he makes no apologies for calling an emergency meeting of the auto insurer’s governance committee over the long weekend.

The board voted to dismiss Herbelin with cause Sunday and his departure was announced that afternoon. MPI chief operating officer Marnie Kacher was appointed interim CEO.

“As chair of the board, I was not prepared to delay taking action until after the long weekend,” Keith said in an interview. “The board took what I believe to be the necessary and appropriate action and in as timely a manner as possible, considering the necessary due process.”



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MPI board chair Ward Keith says he makes no apologies for calling an emergency meeting of the auto insurer’s governance committee over the long weekend.

The investigation concerned Herbelin’s “work-related conduct,” Keith said. He declined to discuss the scope of the review or its findings, citing privacy concerns.

“After considering several factors, the board determined the relationship should be terminated and Mr. Herbelin was dismissed with cause,” he said.

The investigation was ordered by former MPI board chair Michael Sullivan prior to his resignation earlier this month, Keith explained.

A lawyer external to MPI was hired to conduct the review and the results were submitted last week and Keith said he was notified a few days later. Once informed of the results, Keith called the emergency board meeting, which requires 72 hours notice.

Herbelin took the top job at MPI in early 2021 with a resumé boasting 30 years of experience in the insurance business. The Swiss national held a series of management and executive roles prior to working at MPI, including as president of Elips Life Insurance, a Chicago-based subsidiary of a Swiss company.

He joined the publicly owned auto insurer during the COVID-19 pandemic and as MPI was already pursuing the largest technology modernization effort in its history, known as Project Nova.



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The MPI board voted to dismiss Eric Herbelin as CEO with cause Sunday and his departure was announced that afternoon.

Under Herbelin’s tenure, the project’s price tag ballooned from $100 million to $290 million, with Herbelin and the corporation blaming delays and cost overruns on incomplete advice from consultants hired to prepare the initial business case.

The hired help left out a number of expenses and overestimated MPI’s ability to deliver the changes necessary to move basic customer services online under the initial timeline, Herbelin told a legislative committee in December 2022.

One month later, the corporation was rapped by the Public Utilities Board, which ordered a closer look at MPI’s spending on Project Nova, citing concerns it had lost control of the $290 million budget.

In its decision to approve a 1.54 per cent rate increase for the average driver in 2023-24, the PUB said significant uncertainty remains with Project Nova and it remains concerned expenses will continue to rise.

Meanwhile, it came to light MPI awarded more than $12 million in untendered contracts to consulting firm McKinsey and Co. to help with the rollout of Project Nova. The revelation sparked a ministerial directive issued in February requiring the corporation to competitively source goods and services.

“The board took what I believe to be the necessary and appropriate action and in as timely a manner as possible, considering the necessary due process.”–MPI board chair Ward Keith

A second ministerial directive was issued in April ordering an external organization review of MPI to confirm whether MPI’s financial projections are sound, its hiring plans are good value for ratepayers and that the executive structure is appropriate, among other items. A report is expected by the end of the year.

And earlier this month, the Free Press reported Herbelin received a three per cent pay bump last year and spent 38 business days travelling despite Project Nova cost overruns and the PUB’s concerns.

Sullivan resigned as board chair shortly after.

On Tuesday, Keith declined to discuss board decisions made prior to his appointment and would not comment on raises or travel expenses provided to the former chief executive officer.

“Moving forward, having appointed Ms. Kacher as the interim president and CEO, I am really confident in her experience and her knowledge, and I also know that she’s well-respected not just within the company, but by stakeholders and business partners,” he said.

The leadership team is focused on successfully implementing Project Nova on schedule, preparing its next general rate application and providing good customer service while a search for a new, permanent CEO is underway, he said.

The Free Press was unable to reach Herbelin for comment Tuesday.

Justice Minister Kelvin Goertzen, who is responsible for MPI, said he supports the board’s decision to dismiss Herbelin, though he has not reviewed the findings of the internal investigation.



WINNIPEG FREE PRESS FILES

Justice Minister Kelvin Goertzen, who is responsible for MPI, said he supports the board’s decision to dismiss Herbelin, though he has not reviewed the findings of the internal investigation.

“It deals with (human resource) matters and it’s not something I should be privy to see,” Goertzen said.

The Steinbach MLA said he is confident in the current MPI board and its chair.

NDP critic Matt Wiebe alleged Herbelin’s dismissal was a “political move” and the government should have acted sooner to address concerns at MPI.

“The issues that were identified with Project Nova should have been a major red flag for this government and it should have prompted them to act immediately to get control of the situation,” Wiebe said. “Instead of doing that, the government sat on its hands, refused to acknowledge the issues and, now, in a desperate attempt in an election year to distract or move past this issue… the minister wanted to make this change.”

danielle.dasilva@freepress.mb.ca

 

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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