Horne accused of misleading public over firing of AHS board

Newly released Alberta Health Services (AHS) financial statements show Health Minister Fred Horne privately signed off on AHS executive bonuses while he was publicly challenging them.

Critics say Alberta health minister manufactured crisis over executive bonuses

A manufactured crisis?

10 years ago
Duration 3:02
Featured VideoThe health minister signed off on AHS executive bonuses while he was publicly criticizing them

Newly released Alberta Health Services (AHS) financial statements show Health Minister Fred Horne privately signed off on AHS executive bonuses while he was publicly challenging them.

"I think that it is a clear indication, again, of how this government has been so deceptive throughout this whole process," said Sandra Azocar of the Friends of Medicare.

Azocar was responding to AHS annual financial statements, which were posted on a government website earlier this week. No news release was issued to alert the public to the financial statements, which detail more than $13 billion in spending.

On June 12, Horne created a political maelstrom when he fired the entire AHS board after it refused to renege on "pay-at-risk" bonuses for 99 AHS executives worth as much as $3.2 million. Horne had asked the board to reconsider the decision to pay the bonuses. It did reconsider and said it was legally obliged to honour the contracts, which stipulated the performance-based pay.

Horne replaced the arm’s-length-board with senior healthcare administrator Janet Davidson.

But the financial statements show that on June 19 — a week after he fired the board — Horne personally signed off on the AHS financial statements, which included detailed accounting of the bonuses being paid to a dozen top AHS executives. The bonuses range from $12,000 to a high of $108,000 for AHS president Dr. Chris Eagle.

While Horne was effectively signing off on those bonuses, he was still, on June 19, telling the public he was seeking legal advice to determine if AHS could renege on them.

"As I indicated in my statement last week, I have asked Janet Davidson, official administrator at AHS, to review this issue and provide her advice," Horne’s spokesman told CBC News in an email in response to an interview request.

CBC News sought the interview with Horne because it had obtained an AHS executive contract, standard for all AHS executives, and had shown it to two employment lawyers. Both said the contract was "ironclad" and that the board had no legal choice but to honour the promised performance bonuses. They said Horne had no legal justification for firing the board.

Horne had also publicly claimed that another major reason he fired the board was because it had "reportedly" refused to allow a "number" of AHS executives to forgo their bonuses.

On Saturday, The Edmonton Journal published a story based on a letter Davidson had written to Horne in which she said there was no legal way for AHS to avoid paying the executive bonuses. But Davidson also said she had learned AHS executives could refuse to accept their bonuses.

Executives never denied option to forgo bonuses  

Horne held a news conference on Saturday, in the midst of the July long weekend, to respond to Davidson’s letter.  

"And of course we know that a number of employees had volunteered to do that a few weeks ago, and the former board denied them that option," Horne told reporters.  

"So I am giving them that option," he said, adding that, "it disturbed me greatly and I think I had said earlier that the former board had closed that door.  And so we are reopening that, and they will be offered the option to refuse the pay-at-risk."

Horne was not available for comment Wednesday. But several board members have told CBC News that AHS executives always had the option to effectively refuse their bonuses.

Board chair Stephen Lockwood said he would have told Horne that, but the minister never spoke to him before he fired the board, and has not since.

Board member John Lehners of Grande Prairie said a "handful" of the 99 AHS executives expressed concern about public criticism in the media, and the potential effect on their families, if they accepted the bonuses. But he said the vast majority of executives wanted their bonuses. That created an unfair situation, Lehners said.

"They had earned it, and they were worried they were going to be unfairly treated (in the media) as some greedy chaps that didn’t have a passion for health," he said. "We did not want to see that happen."

Lehners said the board decided to pay every executive bonus, but told them they could return it to AHS if they wished.

"We just separated all the emotion from it and made it simple," Lehners said. "If they chose to give it back as a gift or however they chose to do it, that was their choice. We didn’t stop them from that then and even now everybody has that choice."

Minister misled public about firing:critics

Azocar said both reasons offered publicly by Horne for firing the board raise troubling questions.

"Was it a direct attempt to mislead Albertans or to be deceptive?  Or was it that he had something else in mind?" Azocar said.  

"And that is what people don’t trust anymore, the governance. And what is it that he is doing behind the scenes.  Is he making deals behind the scenes?  I think it is a sad, sad representation and Albertans should be angry at how this is all being played out."  

New Democrat health critic David Eggen believes Horne created a pretext to fire the board so the Redford government could reassert complete political control over the province’s health-care system.

"I think they sacrificed the super board because they were starting to show and use the independence that they thought was merited or needed to run Alberta Health Services properly," he said.

By law, the executive bonuses must be paid within 30 days of when Alberta Auditor General Merwan Saher signs off on the audited AHS financial statements. Saher signed off on June 6, which means the bonuses could be paid as early as Friday.

It is not known how many of the 99 executives will accept their bonuses.