Alberta Premier Danielle Smith says she found out about health contract allegations in media

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Alberta Premier Danielle Smith says she first became aware of allegations that government officials, including one of her top advisers, interfered in contract negotiations at the provincial health authority when The Globe and Mail revealed the claims last week.

Ms. Smith, speaking to reporters on Wednesday in Washington, D.C., where Canada’s premiers have gathered to press U.S. officials on trade, said she is pleased Alberta’s Auditor-General is examining the allegations and that her office has set up a shared system with the watchdog to swap information.

The Globe last week reported that Athana Mentzelopoulos, Alberta Health Services’s former chief executive, alleges government officials pressed her to sign deals with private surgical facilities that she felt were too costly compared to other contracts. Ms. Mentzelopoulos made the allegations in a Jan. 20 letter her lawyer sent to AHS after the government terminated her on Jan. 8. The former executive alleges Marshall Smith, the then-premier’s chief of staff, was among those who interfered in negotiations on behalf of private companies, including private surgical firms.

“I first became aware of it when I saw the newspaper reporting on it,” Ms. Smith told reporters.

Auditor-General Doug Wylie last Thursday confirmed his office is examining procurement and contracting processes at AHS and Alberta Health. The probe is related to chartered surgical facilities – privately owned outfits that perform medical procedures at the expense of government, as part of the public health care system – as well as ibuprofen and acetaminophen, and COVID-19 personal protection equipment.

“We’re interested in hearing what the Auditor-General has to say. We’ve already set up a shared file, so that they can get all the documents that we have to see if there’s any wrongdoing,” Ms. Smith said. “If there’s any wrongdoing, we’d like to get to the bottom of it.

“And if there isn’t, we need to find out why AHS is standing in the way of chartered surgical centres.”

Ms. Smith said her government had been requesting information for months.

“We’ve been asking for eight months, as I understand it from my health minister, for any indication of wrongdoing and we’ve not seen anything,” she said. “So I think we have to see if there’s any wrongdoing first and if there is, we have to clean it up.”

Ms. Smith added that she still had confidence in her health minister. The Premier came to power on a promise to shake up AHS and the government, under the United Conservative Party, is in the process of dismantling the health authority and replacing it with four other organizations.

Mr. Smith, who is not related to the Premier, did not acknowledge a request for comment. Ms. Mentzelopoulos has not commented.

Ms. Mentzelopoulos, in her letter, alleges she first became concerned with procurement and contracting issues at AHS around September. She alleges her internal investigations, which included chartered surgical facilities and a review of deals tied to the firm that imported generic children’s medication from Turkey, ramped up in the fall.

In 2024, AHS was pursuing a contract extension with Alberta Surgical Group, a CSF based in Edmonton, and new deals for private outfits in Red Deer and Lethbridge.

In October, Health Minister Adriana LaGrange issued a directive, obtained by The Globe, that stripped AHS of its power to negotiate and approve CSF deals. The directive ordered AHS to take immediate steps to strike a deal with ASG, and included a revised schedule for pricing and procedural volume. Ms. Mentzelopoulos, in her letter, alleges the costs were inflated compared to recent deals in Alberta.

Ms. Mentzelopoulos alleges Ms. LaGrange was aware of AHS’s internal probes. The former executive alleges she briefed Andre Tremblay, the deputy minister of health and at the time an AHS director, on Dec. 11 about her CSF investigation.

He wanted to know when negotiations could resume and she said immediately, but the discussions had to be “informed by proper procurement practices and advice (including from AHS legal) in order to secure the best terms and pricing for AHS,” Ms. Mentzelopoulos alleges.

The next day, Darren Hedley, an associate deputy minister at Alberta Health, told Ms. Mentzelopoulos that Mr. Tremblay briefed Ms. LaGrange, but that the minister was “dismissive of the need to continue the internal investigation,” Ms. Mentzelopoulos alleges.

Ms. LaGrange wanted the CSF contracts signed that week, Ms. Mentzelopoulos alleges, but the executive was not prepared to proceed without proper due diligence.

Neither Mr. Tremblay nor Mr. Hedley acknowledged requests for comment on Wednesday.

Alberta Health, in a Dec. 23 letter obtained by The Globe, instructed Ms. Mentzelopoulos to stop her internal investigation into CSFs and hand over related documents and findings. Alberta Health, in the letter, also assumed control of the negotiations related to new CSFs in Red Deer and Lethbridge.

The Dec. 23 letter exercised authority granted by Ms. LaGrange’s October directive.

The UCP wants to expand Alberta’s reliance on private surgical facilities, which execute less complex surgeries than those done in hospitals. Critics argue that while they can complement the public system, they drain resources, such as staff, from the traditional system.

The Alberta government dismissed AHS’s board late last month, installing Mr. Tremblay as AHS’s official administrator.

AHS on Monday told The Globe it executed a contract extension with ASG in October and the terms of the deal were better than the original contract. AHS said it has not yet finalized deals regarding new facilities in Red Deer and Lethbridge and the government said it paused those discussions to conduct a review in the wake of The Globe’s reporting.

With files from Laura Stone in Washington, D.C.