The federal government is facing calls to reject a takeover bid by a massive Chinese insurer with a murky ownership structure that is seeking approval to buy a majority stake in one of British Columbia’s biggest retirement home chains.
The deal is believed to exceed $1-billion and, if approved by Ottawa, would give Beijing-based Anbang Insurance Group an important role in the delivery of health care in British Columbia.
A patient-advocacy group has called on the federal government to review the sale with caution. And British Columbia’s most prominent NDP MP said Innovation Minister Navdeep Bains must reject the transaction outright, on the grounds Vancouver-based Retirement Concepts is an important part of British Columbia’s health-care delivery system. The firm is the highest-billing provider of assisted living and residential care services in the province.
Rick Turner, co-chair of BC Health Coalition, said he is alarmed at the apparent lack of concern from provincial and federal politicians about the sale of so many care homes to a foreign corporation.
Anbang has close ties to the Chinese government and has been linked to billions of dollars in real estate purchases across the globe.
“We don’t know about the particulars of this deal or this company, but ownership does matter when it comes to seniors’ care,” he said in an interview.
The coalition says British Columbia has seen an increase of beds in the for-profit sector, while non-profit beds have decreased. The result, Mr. Turner said, is that the quality of services has deteriorated as owners seek to squeeze more profits from their facilities.
“The provincial and federal governments need to look very carefully at this plan,” Mr. Turner said. “I wish they were more concerned. Often times when a for-profit takes over a seniors’ home, the quality of care suffers in the drive to increase profit.”
New Democratic Party MP Nathan Cullen said Retirement Concepts as a health care provider should be considered a “critical asset” for Canada to protect.
“You would think any government would reject this proposal.”
The B.C. government paid the company $86.5-million in the 2015-16 fiscal year for its services, more than any other of the 130 similar providers.
Asked Monday whether she had any concerns, B.C. Premier Christy Clark said she has no advice for Mr. Bains on whether he should approve the deal and that her government would make sure the quality of care remains the same for patients if Anbang purchases the retirement homes.
Asked whether she had known a company with close ties to the Chinese government was trying to take over Retirement Concepts, she first said: “I had heard about it after the [possible] sale was made.” Asked whether she was concerned that Anbang tried to hide their purchase, she later said: “That’s the federal government’s purview, I heard about the possible purchase after the fact, because it’s not an area of provincial responsibility.”
This foreign takeover is currently under scrutiny by the Ottawa’s Investment Review Division because it exceeds the $600-million threshold. In the past decade, the Conservative federal government blocked four such deals in the aerospace, telecom, potash and oil sectors, often citing the need to protect Canada’s national interest.
Anbang’s ownership remains mysterious. An investigation by The New York Times earlier this year revealed 92 per cent of Anbang is currently held by firms either fully or partly owned by relatives of Anbang’s chairman, Wu Xiaohui, or his wife, the granddaughter of the former Chinese leader Deng Xiaoping, or Chen Xiaolu, the son of a famous People’s Liberation Army leader.
Anbang appears to have gone to some lengths to conduct this B.C. deal below the radar by incorporating a new Canadian company under a different name. Telephone calls and e-mails to this company’s listed directors were not returned. The Globe and Mail has also unable to reach anyone at Anbang International, Anbang Insurance’s global investment arm, at its Vancouver number.
Michael Byers, a University of B.C. professor and Canada Research Chair in global politics and international law, said he is troubled by the way Anbang went about making their bid.
“It does send out a bit of a red flag here. One would hope that any company wishing to invest in Canada would do so in an open and transparent way – that adds to the sense of confidence that it’s a good company,” he said.
Under international trade deals that Canada has signed, the provinces retain the right to refuse to give health-care contracts to foreign companies. That’s because Canada reserved the right in trade agreements for governments to discriminate against foreign suppliers of services in the health-care sector and foreign investors when it comes to health care.
Retirement Concepts, however, says it will remain as operator of the homes under a deal with Anbang’s recently formed Canadian company. Retirement Concepts as operator will retain a minority share and manage day-to-day operations.
Retirement Concepts owns and operates about 24 retirement “communities,” mostly in British Columbia, except for several properties in Calgary and Montreal. What makes it even more attractive is that it also owns holdings of unused or partly developed land that would allow a major expansion of facilities in the future.
Mike Klassen of the B.C. Care Providers Association, which represents private caregivers including Retirement Concepts, said it is not surprising that a family-owned business would be sold. “We don’t make any secret that the margins are pretty small in this business,” he said. “A lot of these care homes in B.C. are family owned and operated. In some cases, the operating costs are challenging and sometimes they are sold to someone who thinks they can do it more efficiently.”Report Typo/Error
Follow us on Twitter:, ,