Ottawa must regulate private nursing agencies, N.B. health network says

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The leaders of a New Brunswick health authority are calling on the federal government to regulate private nursing agencies, after incurring a $98-million budget shortfall they attribute mostly to what they say are unfair and costly contracts with a Toronto staffing company.

The chair and vice-chair of the health authority, the Vitalité Health Network, which operates francophone hospitals across the province, said in an interview that their organization was facing the prospect of closing emergency departments and cutting dialysis services in 2022. That’s when it began doing business with the Toronto company, Canadian Health Labs, an upstart founded after COVID-19 struck.

CHL provided the health authority with what are known as travel nurses – temporary fill-ins, relocated from elsewhere in the country to plug staffing gaps. CHL was one of several private companies to capitalize on demand for travel nursing as the pandemic strained hospitals.

These travel nursing agencies “took advantage of a very vulnerable situation in Canada during the pandemic that, in my opinion, was excessive,” Vitalité vice-chair Réjean Després said.

“Do I think it’s fair? No, I don’t think it’s fair,” chair Thomas Soucy added, referring to Vitalité's deals with CHL.

Mr. Soucy, the president of a large poultry company, and Mr. Després, a finance executive, were appointed to the Vitalité board in June, 2023, nearly a year after the CHL contracts were signed.

The pair pointed out that many Canadian industries are subject to federal rules, including the banking and agriculture sectors where they work. They urged Ottawa to regulate health care staffing companies and cap what they can charge, rather than leaving each province to set its own policies for the industry.

“We have a limited number of nurses in Canada, and the more of them get attracted to these companies, the less of them are available for health networks like Vitalité to hire,” Mr. Després said. “I’m surprised that the federal government does not have regulation controlling a resource that is so important to the well-being of our citizens. So is that something that should be investigated? I absolutely think it is.”

New Brunswick is far from the only province struggling to afford the costs associated with hiring temporary nurses from private agencies, The Globe and Mail found in an investigation of the burgeoning industry published in February.

Quebec spent nearly $578-million on agency nurses in 2022-23. Ontario hospitals and long-term care homes spent nearly $1-billion on nurses and personal support workers from private agencies last year, according to a briefing document obtained by The Canadian Press. Nova Scotia spent $43.9-million on agency registered nurses for hospitals from April to September of 2023, 10 times what it spent in all of 2018-19.

Newfoundland and Labrador, another province whose health authorities have done significant business with CHL, spent $35.6-million on staffing agency nurses from April to August of last year, up from an average of just over $1-million annually before the pandemic. New Brunswick’s government declined to reveal its total travel nursing spending in response to a recent Globe request.

Auditors-General in Newfoundland and New Brunswick have launched investigations of travel nursing deals, and in both cases CHL has been a focal point of scrutiny.

Vitalité will be nearly $100-million over budget this year. Most of that stems from its contracts with CHL, the board members said.

The network has an $899.5-million budget for the fiscal year ending in March. About $70-million of the $97.8-million budgetary shortfall Vitalité recorded at the end of February was attributable to CHL, Vitalité’s largest supplier of temporary personnel. Mr. Després attributed most of the rest of the shortfall to other staffing agencies.

The Globe revealed in February that CHL recruited nurses from other provinces by offering them twice what they earned in the public health care system, while at the same time charging Vitalité and one health authority in Newfoundland more than $300 an hour, six times what unionized registered nurses generally earn in the public system.

CHL also made money through other parts of its contracts. Vitalité had agreed to reimburse the costs of car rentals and accommodations for CHL’s out-of-province personnel. These services were supplied by companies set up by CHL founder and chief executive Bill Hennessey. The contracts allowed CHL to invoice at hotel rates, although the nurses stayed in rental properties purchased or leased by Mr. Hennessey’s firms.

Vitalité has declined to disclose how much it pays CHL in accommodation fees. But invoices obtained by The Globe show that CHL is charging Vitalité the equivalent of $219 a night to lodge its workers. For example, CHL claimed $9,198 for one nurse’s 42-day stay.

The nurse worked in Campbellton, N.B., where CHL staff are lodged in two properties purchased by CSL RE Inc., a company that lists Mr. Hennessey as its sole director. Tenants at these apartments used to pay between $1,000 and $1,100 a month before CSL took over.

The invoices show that, on April 11, CHL charged Vitalité $772,000 to supply nurses and orderlies for the first week of April, plus taxes and travel and accommodation reimbursements for the last week of March, for a total of more than $1-million for that week-long billing period.

Vitalité pays CHL a $46 daily meal allowance for each worker. But nine nurses the agency sent to New Brunswick have told The Globe that they didn’t receive those per diems. The Globe found a similar pattern in Newfoundland, where nearly 30 nurses said they did not receive meal allowances from CHL, despite the company billing Newfoundland taxpayers for their per diems.

Mr. Soucy said CHL was the only agency that guaranteed it could deliver enough francophone nurses and personal support workers. Despite that promise, some of the workers CHL is sending aren’t adequately fluent in French, Mr. Soucy alleged.

“We hear from the field that they’re not providing 100-per-cent bilingual service,” he said. “ … If we’re paying for bilingual service, and we’re paying that much more money for bilingual service, we expect a true bilingual service.”

Asked what Vitalité is doing about CHL’s alleged failure to supply a fully bilingual roster of temporary nurses, and about its apparent withholding of meal allowances, Mr. Després and Mr. Soucy confirmed Vitalité has called in its lawyers. They declined to provide specifics.

“I’ll leave it at this,” Mr. Després said, “there are negotiations happening between Vitalité and CHL to ensure that we are getting the value for the money that’s being paid.”

In answer to requests for comment sent to Mr. Hennessey and CHL, Kelsie Chiasson, a consultant with the public-affairs firm Crestview Strategy, said CHL stands by an earlier four-paragraph statement to The Globe.

That statement described CHL’s contracts as fair and transparent, and said they were “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.”