‘Red flags’ over Amicus: NDP

Internal government documents raise significant concerns over the Saskatoon Health Region’s funding agreement with Amicus for a new long-term care home in Saskatoon, the NDP said Thursday.

The Opposition has been hammering at various aspects of the deal for most of the fall legislative sitting, including the fact that the provincial government would be responsible for assuming the cost and operation of the $27-million facility if Amicus, a subsidiary of the Catholic Health Ministry of Saskatchewan, pulled out of the deal.

In question period Thursday, the NDP raised an email from Health Ministry official David Smith that said "this provision is contrary to both the spirit and intent of the provisions contained in the Regional Health Services Amendment Act 2007," which aimed at preventing affiliate organizations from receiving a "buyout" from a regional health authority over a breach of agreement.

The email suggests the agreement would create both a "contingent liability" for the government and an expectation among other health-care affiliates that they would be entitled to the same "guarantee."

Saskatchewan Party Health Minister Don McMorris told reporters he was not familiar with the email but said officials had assured him there was no problem with the agreement.

Dan Florizone, the deputy minister of health, said the amendment referred to was passed by the legislature in 2007, but it had never been proclaimed into law.

It also would not apply to Amicus because it is not an affiliate health organization, he said.

Florizone said the guarantee is written into the contract to ensure that if Amicus backed out of the deal, the 100 residents of the facility would not be left out on the street.

He said the funding model is a pilot project that will be evaluated to see how it works.

But NDP MLA Pat Atkinson said she is not reassured by the government’s contention.

The agreement marks a fundamental shift in funding such facilities by the province. While Amicus pays 100 per cent of the upfront capital costs, the government will pay a higher than normal fee to the organization to cover those costs over time.

The past model has seen a 65-35 per cent funding split of capital costs, with the province picking up the larger share.

Atkinson said the government is leaving taxpayers on the hook while attempting to hide debt in future years.

"It appears there are all kinds of red flags and it looks as though there was huge political interference in order to get this deal off the ground," she said.

The Opposition and the government have been sparring since the spring over whether the agreement is a loan guarantee of a type not being made available to other proponents of long-term care facilities.

On Thursday, it presented an internal April email from health region CEO Maura Davies that notes there is "protection to the bank that the region/ministry will assume the debt if the deal falls apart or Amicus defaults on its loan. Many details of this agreement were essentially agreed to by government before the region became involved in the discussions."

McMorris, in turn, said a review by accounting firm KPMG had judged that the agreement did not constitute a loan guarantee.

A May letter from KPMG to the health region provided by the government said the agreement did not appear to meet the definition of a loan guarantee because the health authority would not be required to make a payment to the financial institution providing mortgage financing to Amicus.