Sudbury, Ont., hospital memo reassures staff about current CEO, who's a former Laurentian University president
Health Sciences North president and CEO Dominic Giroux led Laurentian University from 2009 to 2017
The Sudbury, Ont., Health Sciences North (HSN) hospital board sent a memo to employees and medical staff last week to assure them the hospital is in good financial health.
The memo came in the wake of a scathing report from Ontario Auditor General Bonnie Lysyk about Laurentian University that detailed poor management and a lack of transparency from 2010 to 2020, which led to the institution's insolvency in 2021.
From April 2009 to June 2017, Dominic Giroux was Laurentian's president. In 2017, he became the president and chief executive officer of HSN, and has remained in that role since then.
"We would imagine this situation has raised some questions for you on HSN and HSNRI's (Health Sciences North Research Institute) financial health given Dominic Giroux is a former president at Laurentian University," the memo to employees and medical staff said.
"We want to take a moment to provide some reassurance to you on our sound financial position, and convey our extraordinary confidence in Dominic Giroux as our president and CEO."
HSN memo (PDF KB)
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The memo said that since Giroux joined the hospital, its cash position, working capital net assets and long-term debt have all improved.
"When Dominic Giroux took over five years ago, HSN was incurring a deficit of $1 million per month," the memo said.
"HSN incurred a surplus from hospital operations of $1.8 million in 2018-19, $0.3 million in 2019-20, $2.9 million in 2020-21 and $1.9 million in 2021-22."
The memo added that Giroux "has done an excellent job" co-chairing the pandemic response for the health sector in northern Ontario.
"We are fully confident in the job Dominic has done as CEO — a job that was recently validated by being chosen by his peers to be the chair of the Ontario Hospital Association at a time of great challenge in Ontario's health care sector," it said.
Report on Laurentian
In her special report on Laurentian, the auditor general put the primary blame for the university's financial collapse on a failed philosophy of "build it and they will come."
That started with what Lysyk called a poorly planned and costly capital expansion at a time in 2010 when the university was already facing financial difficulties.
From 2009-10 to 2019-20, Laurentian pursued six major capital projects that cost $168 million, including building the East Residence, a cardiovascular and metabolic research lab, the school of architecture, and campus modernization without adequate evidence or analysis to justify the investments.
"As the university began to amass more than $87 million in debt to pay for this capital expansion, the senior administration exacerbated the situation by making a series of questionable financial and operational decisions, including amending its internal policies to allow it to incur even more debt and increasing its senior administration's costs," Lysyk wrote in the report.
She also outlined how the president from 2009 to 2017 — Dominic Giroux — was given merit pay awards tied to pursuing the capital projects that contributed to the university's financial troubles.
The board approved the maximum bonus of $14,000 for Giroux each time a major capital project like the school of architecture was completed, even if they weren't always completed on time.
- Poor management, new buildings led to Laurentian University insolvency, Ontario AG's preliminary report says
Lysyk added the costs associated with Laurentian's senior administrators climbed by 75 per cent from 2010 to 2020, which weakened the university's financial position and violated provincial rules.
"We also found that Laurentian breached provincial compensation-restraint legislation for broader public sector employees, compensating senior administration $389,000 more than legislation permitted, and that its recruitment of senior administrators lacked demonstrable fairness or rationale," she wrote.
CBC reached out to Dominic Giroux after the auditor general released her report, but he declined to comment.
Health Sciences North board chair Daniel Giroux — no relation to Dominic — was also not available for an interview about the hospital's memo by deadline.
With files from Kate Rutherford