New Brunswick health agency was warned about long-term, travel nurse contracts

New Brunswick’s Vitalité Health Network was warned by a deputy minister not to sign long-term deals with a private nursing agency but went ahead, a legislative committee heard Tuesday as it looked into how the province’s francophone medical authority ended up nearly $100-million over budget.

The committee is looking into the June 4 report by provincial Auditor-General Paul Martin, which was critical of Vitalité’s oversight of its contracts with the Toronto agency Canadian Health Labs (CHL). The Auditor-General found that Vitalité approved questionable invoices and was charged exorbitant prices.

Testifying on Tuesday, Health Department deputy minister Eric Beaulieu recalled how in 2022 he heard that Vitalité was in discussion with CHL and told the health network that “we should stay away from multiyear contracts and only deal with the urgent issues of that day.”

The committee was also told that in 2022, Vitalité’s trustee, who was appointed by Premier Blaine Higgs, had put the province’s other health authority, Horizon, in contact with CHL. However, Horizon didn’t sign with the company.

CHL supplies out-of-province temporary nurses, also known as travel nurses, to public-health bodies facing staffing shortages made worse by the pandemic.

CHL also had contracts in Newfoundland and Labrador, which are now being reviewed by that province’s Auditor-General. The company’s rates and billing practices were the focus of a Globe and Mail investigation published in February.

In his testimony, Mr. Beaulieu reiterated that the Health Department was only informed of the first of three contracts that Vitalité signed with CHL.

Mr. Beaulieu was previously deputy minister at the Social Development Department, which had a contract with CHL to staff nursing homes.

In the summer of 2022, Mr. Higgs had dismissed the Vitalité and Horizon boards, replacing them with two trustees. During that same period, Vitalité was negotiating its first contract with CHL.

In the end, Vitalité signed three contracts with CHL for a maximum value of $158-million. The third deal runs until 2026, with a value capped at $93-million. It charges Vitalité more than $300 an hour for a nurse, six times what nurses earn in the public system.

Vitalité didn’t answer a request to comment. The network’s CEO France Desrosiers is set to testify Thursday.

Horizon CEO Margaret Melanson, who testified on Tuesday, said that the Vitalité trustee, Gérald Richard, had put her officials in touch with CHL in 2022. At the time, Horizon needed travel nurses and was asking other jurisdictions which agencies they used.

Horizon’s trustee, Suzanne Johnston, was often in conversations with Mr. Richard. “I believe that the trustee with Vitalité had told our trustee that they had engaged with CHL and they thought it may have been a good idea for Horizon to speak to them as well,” Ms. Melanson said. “So that was where I was first given any contact with CHL because I honestly wasn’t aware of their existence.”

But in the end Horizon didn’t sign because Bill Hennessey, CHL’s chief executive, wanted a long-term contract and the health network only considered travel nursing a stopgap measure.

Mr. Beaulieu said his department only found out about Vitalité’s other two deals with CHL in January, 2023, when the network revealed that it would be $20-million over budget.

Mr. Martin’s audit found that Vitalité has paid CHL more than $98-million, the largest share of the $173-million New Brunswick spent on temporary nurses between February, 2022, and February, 2024.

Mr. Beaulieu said his government is now looking for ways “to reduce the financial exposure” from the CHL deals but since the department was not a signatory, “our ability to intervene on any of the contracts is non-existent.”

CHL didn’t respond to a request for comment. The agency previously said its contracts are “fair and transparent” and reflect “extraordinary logistical challenges” in deploying workers in rural regions.

One committee member, Conservative MLA Ross Wetmore, said Tuesday that the Health Department and the health authorities had lost credibility by allowing the travel nurses’ contracts. “This is a $175-million boondoggle,” he said.