Seven New Developments in the AHS For-Profit Surgical Contracts Scandal: An Update
As more information becomes available on the ongoing scandal involving for-profit surgical contracts at Alberta Health Services, HSAA is supporting members who wish to stay informed about how these developments impact the public health system. New documents uncovered by the media confirm what your union has warned about: privatization is not only costing Albertans more, but also actively undermining patient care and making the short staffing crisis worse.
You can read our previous summary of the allegations: “Serious Allegations from Former CEO of Alberta Health Services: What You Need to Know.” It is important to note that none of the allegations have been proven in court and HSAA does not assert the claims are true.
Your Union is committed to holding the government accountable and ensuring that public health care remains strong. Here’s what has happened since the initial story was published:
1. RCMP Now Investigating
The Alberta RCMP confirmed they have launched a formal investigation into Alberta Health Services and the allegations of political interference and potential conflicts of interest within its procurement practices.
"Following a review, the RCMP has begun an investigation into the matter. As this is an ongoing investigation, no further details are available at this time," the statement said.
2. AHS Documents Reveal For-Profit Costs More, Hurts Staffing
Leaked internal AHS documents confirm what HSAA has long warned: private surgical clinics cost more than public hospitals and siphon critical staff away from the public system. A draft letter from Mentzelopoulos shows AHS warned officials that expanding private contracts would drive up costs, disrupt care, and worsen staffing shortages.
"These disruptions will have negative consequences for patients and communities, limiting timely access to emergent, urgent and medically complex surgeries such as cancer, general surgery, orthopedic and vascular surgery," she wrote.
3. Cabinet Minister Resigns Over Procurement Concerns
In a shocking move, Infrastructure Minister Peter Guthrie resigned from cabinet on the first day of the spring sitting at the Alberta Legislature, citing a lack of confidence in the government’s procurement practices.
"In recent months, I have voiced concerns regarding the Government of Alberta's procurement practices across all departments," Guthrie wrote. “Unfortunately, the majority of Cabinet does not appear to share my concerns." Guthrie had previously called for Minister LaGrange to step aside.
4. Investigator Appointed, But No Full Public Inquiry
The Government of Alberta has appointed former Manitoba judge Raymond E. Wyant to lead a third-party investigation. Wyant will review procurement practices within Alberta Health and AHS, with an interim report due by May 30 and a final report by June 30.
However, we note that this process lacks the transparency of a public inquiry—Wyant has no power to subpoena witnesses, and his findings will rely solely on government-provided information. The Premier will also have a full month to review the final report before it is made public. This is not the independent investigation Albertans deserve.
5. Government Claims It’s Unaware of Wrongdoing
The government has so far dismissed allegations of political interference, with Premier Danielle Smith and Health Minister Adriana LaGrange stating they were not involved in the awarding of private surgical contracts or aware of any political interference. The government is preparing to file a Statement of Defense against former AHS CEO Athana Mentzelopoulos’ lawsuit. Both deny ever receiving kickbacks from private companies.
The Premier has insisted that all procurement decisions were made by AHS staff, while LaGrange claims she received no substantial evidence of wrongdoing before terminating Mentzelopoulos. The government continues to downplay the severity of these allegations, painting them as procurement issues within AHS and accusing AHS management of obstructing government direction to expand for-profit care.
6. Budget 2025 Doubles Down on For-Profit Surgical Expansion
While HSAA has called for an end to for-profit surgical contracts and the restoration of full surgical capacity at public hospitals, this is not what is happening.
Instead, Budget 2025 increases funding for private surgical facilities, allocating approximately $80 million in taxpayer funds to for-profit providers. The pause on contracts with Alberta Surgical Group remains in place at this time.
7. More High-Profile AHS Terminations
The government’s overhaul of AHS brought further high-ranking terminations. Among those dismissed was AHS Chief Information Officer Penny Rae, a key leader in health system modernization. She was recognized nationally in 2018 for being one of Canada's top women leaders in digital health.
In addition, 425 AHS staff are being transferred to Acute Care Alberta, with the government confirming other positions have been eliminated.