The Manitoba government is selling its property registry, which holds property titles, land surveys, vehicle registrations and other records, to a private company for $75 million.
Teranet Manitoba will pay the government $75 million for the special operating agency, in a move that officials say will streamline the process of buying a house or a second-hand car for Manitobans.
Between 130 and 140 government employees will be transferred to the private firm and the government says there will be no layoffs.
Finance Minister Stan Struthers says Teranet has been doing the same thing in Ontario and has developed expertise in the area.
As part of the agreement:
- Teranet will invest $35.5 million in systems development to ensure services such as title, property searches and registrations will be available through a more convenient, faster and secure online system.
- There will be estimated annual royalty payments of $11 million in 2013, increasing to $24 million at the end of the 30-year licensing agreement.
- The government will maintain the authority to set rates paid by customers for those services under Teranet's management.
- All existing property registry offices will remain open.
- Data used by Teranet, such as land survey and property titles, are now and will always be owned by the province and protected by privacy legislation.
"This deal allows us to take advantage of Teranet's expertise in delivering this specialized service and it ensures good value to the government while ensuring the public is protected," said Struthers.
"This arrangement is part of our modern approach to deliver services more efficiently. It will mean better service for the public, a stable revenue stream for the province, a new company headquartered in Winnipeg and a reduction in the size of government without putting any Manitobans out of work."
Teranet is owned by Borealis Infrastructure, an investment arm of the Ontario Municipal Employee Retirement System. It already runs the electronic land registration system in Ontario.
Michelle Gawronsky, president of the Manitoba Government and General Employees' Union, says none of the registry's employees will lose their jobs at this time.
However, she warns that may change because the company relies on fees on transactions to make a profit.
"Private companies, they're there to make a profit. Government is elected to provide services," Gawronsky told CBC News.
"When the government starts selling those services, it's going to be the public that's going to pay for the private profit."
Gawronsky said she is also concerned because Teranet has a record of cutting unionized jobs and hiring non-union workers in Ontario.
While Teranet has committed to no layoffs, job cuts are likely because some retiring workers will be replaced by automated systems.
"More than half the staff is actually eligible for retirement over the next five years, and we need to put processes and systems in place that will allow the organization to continue in the absence of those individuals," Teranet CEO Jay Forbes said.
The sale is part of a NDP promise made in last spring's budget to sell $83 million in government assets. The remaining $7 million will involve aging water bombers that are being replaced.
The asset sale is part of the a plan to keep the province's deficit to $460 million for the fiscal year that ends in March. The government has also been looking to cut program spending by $128 million.