Health P.E.I. spending thousands of dollars a month on private employment agencies, contracts reveal

CBC

23-05-2025

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Health P.E.I. has hired six senior managers on an interim basis through private employment agencies at costs ranging from $17,490 a month to $43,750 a month.
That information is contained in a series of contracts the province provided to CBC News.
These managers are filling some of the most senior roles at the health agency, including chief medical officer, chief operating officer and chief financial officer.
Melanie Fraser, Health P.E.I.'s CEO, says the private employment agencies provided experienced staff on a month-to-month basis to keep the health-care system running while she worked to develop a permanent leadership team. She says it was money well spent.
"I think it's important to compare what we're paying them month over month versus what we would pay for a salaried professional," Fraser said in an interview with CBC News.
"When you break that down on a month-over-month basis, it's basically the same amount that we're paying the interim person versus what we were paying the previous salaried person."
But the numbers do show a significant increase in cost to use the private employment firms.
For example, Health P.E.I. is paying a private firm for its interim chief medical officer.
That contract, running from Jan. 6, 2025 to Jan. 5, 2026, is costing the health authority $43,750 a month or about $525,000 a year. That figure includes salary and benefits for the person as well as the firm's fee.
Why Health P.E.I. is filling some of its most senior jobs with interim employees, and what it costs
7 minutes ago
Duration 3:01
Health P.E.I. CEO Melanie Fraser says she had no choice but to bring people in to work in executive roles using private employment agencies. That's because the authority had to "to terminate or end the contracts" for a number of senior managers following a damning auditor general's report last October. CBC's Wayne Thibodeau explains what it's costing.
Health P.E.I. provided CBC News with documents showing the yearly salary for the chief medical officer, if hired permanently through the health authority, would be about $394,000. Adding pension, CPP and EI costs brings the total to about $450,000.
That means the interim contract costs about $75,000 more than if it had hired that chief medical officer directly.
Follows string of depatures
Fraser said Health P.E.I. had no choice but to bring people in through private employment agencies after a series of senior managers left following a damning provincial auditor general's report in October 2024.
That audit showed eight top executives had been given new salaries or raises without proper approval.
"We needed to terminate or end the contracts that were issued inappropriately," Fraser said of the departures.
They left a huge leadership void at the organization, though.
"Because they weren't approved positions, we cancelled those contracts and in the interim — because we didn't have positions to hire into — we sought the support of interim executives to help us keep our important health initiatives moving," said Fraser.
Health P.E.I. is also paying accommodation and travel expenses for some of the senior managers, who are all working on the Island. The monthly accommodations costs range from $2,500 to $3,900.
Costs for travel vary. Some managers are not expensing any travel costs, while others have submitted more than $11,000 to date in travel claims.
Opposition calling details 'shocking'
Green Party health critic Matt MacFarlane has been trying to get his hands on these health contracts for weeks. CBC News provided a copy of these contracts to both opposition parties so that they could comment on the details.
"I was shocked and disappointed to see what is in these documents," said MacFarlane.
"The minister of health has gone to some extent to say how offside the previous Health P.E.I. CEO, Dr. Michael Gardam, was with respect to overcompensating the executive leadership team of Health P.E.I.
"Those overpayments were about $200,000 across the board to the six senior leadership positions. Now, we see from these contracts that the current Health P.E.I. CEO — signed off also by the minister — it's about a million dollars over what these positions would be classified to receive under the Public Service Commission-approved ranges."
Liberal health critic Gord McNeilly also called the cost of these contracts "shocking." He said he'd like to see the auditor general take a look at them.
"It means that a large portion of the money that should have gone towards [health] care is going to outside agencies across the country," said McNeilly.
"I don't think that's right for any of the 37,000 people on the patient registry that don't have a family doctor."
3 private firms involved
Health P.E.I. hired Odgers Berndtson to supply it with a series of senior managers. The company has offices in Toronto, Ottawa, Montreal, Calgary and Vancouver.
The contracts, obtained by CBC News, show it hired:
An interim chief financial officer to work between April 21, 2025, and Oct. 20, 2025, at a monthly cost of $29,500. That includes the salary of the individual plus additional costs from Odgers. If the candidate is offered a full-time job, Health P.E.I. has to pay Odgers what is described as a "conversion fee" of $45,000.
An interim human resources executive whose initial contract was to run from July 8, 2024, to March 7, 2025. It was later extended to March 6, 2026. The initial rate was $24,000 a month. When the contract was renewed in February, that increased to $26,000 a month.
An interim chief medical officer with a contract running from Jan. 6, 2025, to Jan. 5, 2026. Health P.E.I. is paying the private firm $43,750 a month. If it wants to offer that candidate the permanent job, it would have to pay a conversion fee of $60,000.
Health P.E.I. also hired Halifax-based KBRS to supply it with an interim chief operating officer.
That contract covered the dates March 31, 2025, to Sept. 30, 2025, at a cost of $30,500 a month.
KBRS also supplied Health P.E.I. with an interim chief administrative officer, from May 12, 2025, to Nov. 7, 2025. That contract costs $23,180 a month.
Royer Thompson Management Consulting, another Halifax-based employment agency, supplied Health P.E.I. with an interim chief communications officer. That contract runs from April 14, 2025, to Oct. 14, 2025, at a cost of $17,490 a month.
"In most cases, you do pay a premium for having somebody that's available immediately, who is extremely experienced, usually senior, and does hit the ground running within two weeks' time," said Fraser.
That's not the only Health P.E.I. contract under scrutiny.
The agency hired KPMG last June to review six areas, including increasing system capacity, improving recruitment, and expansion of patient medical homes.
Documents obtained by CBC News show Health P.E.I. paid KPMG just under $4-million.
Other postings are still up
Meanwhile, Health P.E.I. is still using private employment firms.
A quick search of Odgers' website shows Health P.E.I. has postings up for a head of pediatrics, a head of medicine, and a medical director of mental health and additions.
Fraser said these will be permanent hires, not interim ones.
"We do use a variety of recruitment agencies," she said, adding that they use these firms for medical positions that are especially hard to recruit.
'Irregularities' under review
Meanwhile, the province's financial watchdog is still looking into irregularities in Health P.E.I.'s payroll.
Auditor General Darren Noonan confirmed to CBC News that his office is investigating what Fraser described as "additional payroll irregularities" that were detected "beyond those already flagged by the auditor general."
Noonan said he can't comment because they're still in the "middle of the audit work" but added that his office hopes to report on the latest investigation in the fall.
Health P.E.I. is now developing a new senior leadership team, with the proper approvals from Health P.E.I.'s board, Treasury Board and the Department of Health and Wellness. Those details will be released the week of May 26.
That's at least two months behind schedule. Fraser had promised to have the new leadership structure in place on April 1.