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The Campbellton Regional Hospital at night on New Brunswick's north shore.Chris Donovan/The Globe and Mail

New Brunswick’s francophone medical authority acted without the knowledge of the province’s health department when it locked itself into two large contracts with a private nursing agency, the province’s lawmakers heard Wednesday.

Vitalité Health Network signed the two agreements in late 2022 with a Toronto company called Canadian Health Labs (CHL). The deals, together worth up to $138-million, were finalized without informing the department, after the health ministry had been involved in an initial contract with the same company for a maximum of $20-million in July of 2022.

One of New Brunswick’s two regional health authorities, Vitalité manages the province’s French-language medical services.

A Globe and Mail investigation into the growth of nursing agencies in the public health care system focused on CHL’s contracts in New Brunswick and Newfoundland, which were signed at a time when provincial governments across Canada were dramatically increasing their reliance on such for-profit services to deal with acute staffing shortages during the pandemic.

The investigation calculated that CHL is charging Vitalité rates that work out to $300 an hour per nurse – twice the rates of other agencies and six times what local nurses earn – while billing the health authority for housing at hotel-like rates, rental cars and other expenses.

Deputy health minister Eric Beaulieu told a legislative committee on Wednesday that his department became aware “some time ago” of the costs outlined in The Globe’s report and that it was working to reduce them. He said Vitalité's failure to inform the department of the signing of the two contracts was “outside the normal practice.”

“I want to reiterate that the department was not involved in the negotiations of the contracts with CHL or any of the travel [nursing] companies,” he said.

The Globe report found that several provinces are facing skyrocketing costs for private staffing, also known as travel nursing when it involves using out-of-town or out-of-province nurses.

Opposition Liberal health critic Rob McKee cited The Globe’s reporting during the committee hearing.

“The Globe’s investigation revealed high costs and questionable billing practices. … This is nothing more than gouging taxpayers,” Mr. McKee told the committee.

CHL did not respond to a request for comment sent to its lawyer on Wednesday. The company previously gave The Globe a statement saying that its rates are fair and transparent. The statement said that CHL contracts “are tailored to meet each jurisdiction’s significant local needs, and reflect the extraordinary logistical challenges of getting and keeping health care professionals in rural, remote and underserved communities.”

Vitalité did not respond to a request for comment.

Mr. Beaulieu didn’t provide details to the committee about the CHL contracts and Vitalité has declined to release them. However, The Globe has obtained copies of all three documents.

The initial contract, in July of 2022, which was negotiated with the knowledge of the health department, provided a mix of registered nurses and licensed practical nurses (LPNs) at what The Globe calculates to be the equivalent of $300.72 a nurse per hour. It was worth a maximum of $20-million and expired last September.

The first of the two deals that didn’t involve the health department was a contract with a cap of $45-million to supply personal support workers until May 31 at what The Globe calculates to be a $162.29 hourly rate per PSW.

The other contract supplies RNs and LPNs. It is the largest of the three deals and runs until February, 2026, with a maximum of $93-million. The Globe calculates that it charges Vitalité $306.70 an hour per nurse.

“The department was informed about them after the fact,” late in the 2022-2023 fiscal year, Mr. Beaulieu said about the two contracts.

“In these types of contracts, given the magnitude of them, the duration and the dollar figure, they would normally be things that would involve the department,” he added.

Mr. Beaulieu said the department has worked with Vitalité's leadership and board “so that issues like this do not reproduce in the future.”

He said that CHL previously got work in New Brunswick through a short-term contract to supply some nursing homes and that the initial introduction was made through a lobbyist, Jordan O’Brien. Documents obtained by The Globe through access to information show that CHL had also retained Mr. O’Brien as a lobbyist to introduce its CEO to officials in Newfoundland.

Like other officials have previously stated, Mr. Beaulieu said it was necessary to pay private agencies because severe shortages of health care personnel, exacerbated by the pandemic, threatened to shut down facilities.

The Globe investigation found that CHL currently charges Newfoundland’s western region the equivalent of $312.35 an hour per specialty nurse and $283.63 per regular registered nurse. The central region of the province pays CHL the equivalent of $172.22 an hour per RN.

The investigation also found that CHL invoiced Newfoundland authorities for $1.6-million in daily meal allowances, even though the nurses were told they had to pay for their food.

CHL has not addressed the per diems in its responses to The Globe.

Union leaders and opposition politicians are calling on both provinces’ auditor-generals to audit travel nursing contracts.

“Travel nursing is certainly a topic that is being actively considered for audit,” Chrysta Collins, a spokeswoman for Newfoundland Auditor-General Denise Hanrahan, said in a statement.

“The topic of private nursing agencies has been added to our list of potential future audits,” Jolyne Roy, a spokeswoman for New Brunswick Auditor-General Paul Martin, said in a statement.

The Canadian Federation of Nurses Unions has also asked Karen Hogan, the federal Auditor-General, to investigate jointly with her provincial counterparts but Ms. Hogan’s office told The Globe that private staffing contracts signed with regional health authorities are outside her mandate.

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