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Newfoundland and Labrador’s Health Minister has asked the province’s health authority to look into what happened to $1.6-million in meal allowances paid to a Toronto-based nursing agency after a Globe and Mail investigation of Canada’s burgeoning for-profit health worker industry.

Tom Osborne said Monday that he is seeking more information from Newfoundland and Labrador Health Services about its dealings with Canadian Health Labs (CHL), a private staffing company that secured contracts worth tens of millions of dollars with two former regional health authorities in Newfoundland that have since been folded into NLHS.

The minister stopped short of ordering a formal investigation. He added that it would be “premature” to call in the province’s Auditor-General, although opposition politicians and nursing union leaders say the high costs charged by private nursing agencies need to be investigated by auditors-general across the country.

“There appears to have been absolutely no due diligence in overseeing the type of money that’s been spent,” said Tony Wakeham, leader of the province’s Opposition Progressive Conservatives. He called the costs “shocking” and urged the auditor-general to investigate.

The Globe found that public spending on temporary nurses, sometimes known as travel nurses, has soared since COVID-19 hit. The pandemic worsened working conditions at hospitals and long-term care homes, spurring nurses to retire early, cut back their hours or leave the public system – sometimes for private agencies that offered higher pay and more flexible schedules.

Desperate hospitals and health authorities then turned to private agencies to fill the gaps, paying premium prices for temporary nurses to stave off emergency department closures and service cuts.

Newfoundland and Labrador spent $35.6-million on travel nurses from April to August of last year, up from an average of just over $1-million annually before the pandemic, according to NLHS. Compensation for travel nurses accounted for 14.5 per cent of the province’s spending on nurses during that five-month period, despite temporary nurses working only 5.4 per cent of total hours.

Public spending on private agency nurses ballooned in other provinces, too. To gain a better understanding of how the industry operates, The Globe dug into the operations of one agency founded during the pandemic: CHL.

In some cases, CHL charged rates that The Globe calculated to be twice as high as those of its competitors, and six times what a typical unionized registered nurse in the Atlantic provinces earns per hour. The agency’s chief executive, Bill Hennessey, started companies to provide electric-vehicle rentals and accommodations to travelling health personnel, expenses that were billed to the public purse.

The Globe investigation, which drew on contracts and invoices obtained through freedom of information requests, also found that CHL billed Newfoundland for $1.6-million in daily meal allowances for its personnel, while telling nurses they had to pay for their own food.

The Globe spoke with 26 CHL nurses who said they weren’t paid for food, and obtained copies of CHL’s contracts with its personnel that stipulated there would be no financial reimbursement for food. The Globe is not naming the nurses because they signed non-disclosure agreements with CHL.

“I certainly became aware of the meal portion that was identified in the story as a result of the investigation,” Mr. Osborne said of The Globe’s probe in an interview Monday evening. “So we are looking for more information about the accommodations and the meal per diems.”

In a statement to The Globe before the investigation was published, CHL said that the terms of its contracts vary by region and specialty and are “fair and transparent.” CHL added that its 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.” The company declined to address multiple questions about meal allowances.

The Globe reached out to CHL’s lawyer for further comment on Monday and did not receive a response.

Lela Evans, health critic for the Newfoundland and Labrador NDP, said her party has been calling on the government to set a date to phase out travel nursing. The funds that are being directed to out-of-province nurses would be better spent improving pay and working conditions for local health workers, she added.

“What’s even more insulting,” Ms. Evans said, “is that the government is paying this money for travel nurses, but the profit is going to private companies.”

Mr. Osborne, the Health Minister, agreed that the “level of spending on agency nursing is unsustainable.”

He said Newfoundland and Labrador’s efforts to recruit and retain local nurses are beginning to pay off, particularly in the St. John’s area, which has gone from relying on about 60 travel nurses to fewer than 20.

“If there’s anybody in this country that is focused on reducing the reliance on agency nursing, I can tell you, that’s me.”

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