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Emergency department staff work at the George L. Dumont University Hospital Centre in Moncton in 2023. Daniel St. Louis/Supplied
New Brunswick's Vitalité Health Network signed a long-term contract with a private nursing agency despite being warned by a deputy minister not to do so, a legislative committee investigating how the province's francophone health authority overran its budget by nearly $100 million heard Tuesday.
The committee is investigating a June 4 report from provincial auditor general Paul Martin that criticized Vitalite's oversight of a contract with the Canadian Health Laboratories (CHL), a Toronto-based organization. The auditor general found that Vitalite approved questionable invoices and was charged exorbitant fees.
Testifying on Tuesday, Deputy Health Minister Eric Beaulieu recalled that upon hearing that Vitalité was in talks with the CHL for 2022, he told the health network that it should “avoid multi-year contracts and only deal with the urgent issues of the day.”
The committee was also told Vitalite's trustees, appointed by Premier Blaine Higgs in 2022, had liaised with CHL and Horizon, another health authority in the province. However, Horizon did not enter into a contract with the company.
CHL provides out-of-state temporary nurses, also known as travel nurses, to public health agencies facing staffing shortages exacerbated by the pandemic.
CHL also has contracts in Newfoundland and Labrador, where it is currently under investigation by the province's auditor general. The company's rates and billing practices were the focus of a Globe and Mail investigation published in February.
Beaulieu reiterated in his testimony that the Ministry of Health was only informed about the first of three contracts Vitalité had signed with CHL.
Beaulieu was previously deputy minister of social development, which contracted with CHL to provide staff for care homes.
Higgs fired Vitalite and the Horizon board of directors and replaced them with two directors in the summer of 2022. During the same period, Vitalite was in its first contract negotiations with the CHL.
In all, Vitalite signed three contracts with the CHL, the highest of which was worth $158 million, with a third contract running through 2026 with a maximum value of $93 million. Vitalite was charging more than $300 per hour per nurse, six times the salary of a nurse in the public system.
Vitalite did not respond to a request for comment. The network's CEO, France Desrosiers, is due to testify on Thursday.
Testifying Tuesday, Horizon CEO Margaret Melanson said Vitalite board member Gerald Richard referred staff to CHL in 2022. At the time, Horizon needed traveling nurses and had asked other jurisdictions which agencies they would use.
Horizon trustee Suzanne Johnston had frequent conversations with Richard. “I think the Vitalite trustees had been in negotiations with CHL and had told our trustees that it might be a good idea for Horizon to talk to them as well,” Melanson said. “So that's where I first got in touch with CHL, because I didn't know they existed.”
But in the end, Horizon didn't reach a deal because CHL CEO Bill Hennessy wanted a long-term contract and the health network viewed travel nursing as only a temporary measure.
Beaulieu said the department only found out about Vitalite and the two other contracts with CHL in January 2023, when the department announced it would be $20 million over budget.
Martin's audit found Vitality paid more than $98 million to CHL, the largest share of the $173 million New Brunswick spent on casual nurses between February 2022 and February 2024.
Beaulieu said the government is currently looking at ways to “mitigate the financial risks” from the CHL contract, but because the department is not a signatory it “does not have the power to intervene in any contracts.”
CHL did not respond to a request for comment. The company has previously said the contract was “fair and transparent” and reflected the “extraordinary logistical challenges” of getting workers to rural areas.
Conservative Councilman Ross Wetmore, a member of the committee, said Tuesday that the Ministry of Health and health officials have lost credibility by awarding the contract to agency nurses. “This is a waste of $175 million,” Wetmore said.
