N.S. health agency misusing rules around sole-sourced contracts, says auditor general

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This article was published 31/03/2026 (198 days ago), so information in it may no longer be current.

HALIFAX – Nova Scotia’s health authority is skirting the rules around public contracts without competitive bids, which risks saddling the government with higher costs and unfavourable terms, the province’s auditor general said Tuesday. 

Since 2020, Nova Scotia Health has awarded more than $3.7-billion worth of sole-sourced contracts, referred to as alternative procurement, Kim Adair said in her new report. 

“It’s unfair competition to the vendors. The reason you have the procurement policy and the legislation is to have an open, fair, and transparent process,” Adair told reporters.

Adair’s report comes as the Progressive Conservative government tries to quickly address faults in the health-care system, such as underinvestment and lack of access to primary care. When he was first elected in 2021, Premier Tim Houston had promised to “fix health care” — a goal that Adair said she understands.

Efforts to improve the health-care system are complex and must happen quickly, she told reporters, but the province must follow its own rules for procurement.

“They’re trying to transform health care under significant pressure to deliver and deliver fast, but … expediency should not override due diligence and compliance with policy and legislation,” Adair said.

Her office examined six sole-sourced health contracts and found that important terms and conditions were missing and four of the contracts contained “weak” justifications for the use of alternative procurement. In one of the six contracts, the provincial health authority paid out a vendor for work involving international nurse integration before the agency had approved a contract with that vendor.

Adair said government agencies must have clear justifications for tendering contracts without competitive bids and those contracts must be approved before money is paid out.

She said her report did not evaluate if the health authority received good value for money in these health contracts, or if the province could have saved taxpayer dollars by following a competitive procurement process. “We didn’t do that exercise here, but if you don’t go to public tender, you don’t have the different prices coming in to make that judgment call,” Adair said.

The health agency said in a statement it is implementing Adair’s recommendations but noted that her report did not find any real or perceived conflicts of interests involving the contracts.

Premier Tim Houston said he respects Adair’s work and accepts her recommendations, but stands behind health-care investments done through alternate procurement.

“I believe the value for the money that’s been invested is pretty incredible,” he said. 

NDP Leader Claudia Chender called the auditor general’s report “damning,” saying Nova Scotia needs strengthened protection around provincial spending. “I think Nova Scotians should be very concerned …. This is a government that likes to do business in the dark,” she said. 

The Opposition leader repeated her call for the reinstatement of the board that oversees Nova Scotia Health.

Liberal member Derek Mombourquette also told reporters Tuesday he’s in favour of the reinstatement of a board, saying the report is strong evidence that the health authority is in need of more oversight.

Houston fired the health authority board and its former CEO, Dr. Brendan Carr, a few days after the 2021 general election. The premier appointed Karen Oldfield as interim CEO, and she has held the position ever since. 

Oldfield is the former CEO of the Halifax Port Authority and worked as chief of staff to former Progressive Conservative premier John Hamm. Oldfield’s contract ended Tuesday, and the premier said she would be extended for “several months” as a search begins to find her replacement. 

Health Minister Michelle Thompson told reporters Tuesday it is “normal course of business” to announce a contract extension on the last day of the contract. 

“Karen has delivered. And now we’ll move on to see what else is possible, or who else is possible,” Thompson said. The health minister said Oldfield will stay on for a period of time to support the transition. 

This report by The Canadian Press was first published March 31, 2026.