Health Minister John Dornan said the province is working to reduce its reliance on temporary health care workers.Adrian Wyld/The Canadian Press
The New Brunswick government has tabled legislation that will cancel a major nursing contract with an Ontario staffing agency and also shields the province and its officials from being sued.
In tabling Bill 7 on Wednesday, New Brunswick Health Minister John Dornan said in a statement that the contract was “unfair to taxpayers and had a significant impact on the overall budget for the Department of Health.”
The minister said the province is working to reduce its reliance on temporary health care workers. “The exceptional nature of this specific contract means we are moving forward with legislation to terminate the agreement.”
The bill comes nearly two months after the Vitalité Health Network ended all shifts for temporary nurses supplied by the Toronto company, Canadian Health Labs (CHL).
Officials at Vitalité have blamed CHL for causing a $100-million deficit for the province’s health authority in 2023-24. Vitalité signed agreements with CHL in 2022, at a time when health officials across Canada increasingly turned to companies supplying temporary nurses, also called travel nurses, to reduce severe staff shortages made worse by the pandemic.
A 2024 investigation by The Globe and Mail revealed that CHL charged more than other companies, invoicing Vitalité $306.70 an hour for a nurse, six times what RNs usually earn. The Globe reported that CHL billed Vitalité $219 a night to lodge each nurse while billeting some of them in apartment buildings owned by an affiliated corporation. The company also received a $46 daily meal allowance for each nurse but told its workers to pay for their own food.
A later review by provincial Auditor-General Paul Martin was critical of the travel-nursing companies’ costs and billing practices.
CHL responded to a request for comment with a one-sentence written statement that didn’t mention Bill 7 but noted that the company had provided New Brunswick with “quality health care by placing hundreds of essential front line health care professionals in rural, remote, and underserviced communities.”
In a statement, Vitalité said it will comply with the legislation if it is enacted. It added that the use of travel nurses was “an exceptional practice stemming from a crisis situation.”
Vitalité CEO France Desrosiers has previously said that her organization only retained CHL because the company promised that it could supply large numbers of bilingual nurses to the province’s francophone public-health authority.
Section 9 of the contract that Dr. Desrosiers signed with CHL said that “under no scenario will this Agreement be terminated without cause by Vitalité before the end date of Feb. 5, 2026.”
The new legislation states that the deal between CHL and Vitalité is “null and void” despite Section 9 of the contract.
The bill also said that no legal action can be filed in the province as a result of the cancellation of the contract and the minister and other health officials have immunity from litigation.
It is not unprecedented for a province to nullify contracts and bar people affected from suing, according to a 1995 paper by Patrick Monahan (now a judge, he was then a law professor at the Osgoode Hall Law School of York University).
The paper cautioned that such “short-term political expediency” risks undermining the rule of law.
“Whenever provinces have acted in a high-handed or arbitrary manner, repudiating contracts and denying compensation to those affected without their consent, the courts have found a way to intervene,” the paper said.
Vitalité stopped relying on CHL on Jan. 31, giving the company’s travel nurses less than a day’s notice that they were no longer to report for their shifts at local hospitals and nursing homes.
According to Mr. Martin’s audit, CHL accounted for 80 per cent of Vitalité‘s travel-nursing costs.