REPORT: Public Money, Private Profit: The Ford Government & the Privatization of the Next Generation of Ontario’s Long-Term Care

Posted: November 29, 2021

(November 29, 2021)

Click here for the full report with a list of all the new bed licenses. A summary of the report can be found below.

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Introduction & Key Findings

After watching horror-struck as among the worst death rates in the world devastated Ontario’s long-homes during the pandemic, Ontarians were promised fundamental change. Three thousand, eight hundred and sixty-five long-term care residents – human beings who were loved, whose lives mattered — died in the first 12 months from COVID-19 alone.
Many others suffered unspeakably for want of food, water and basic medical care, lack of human contact, isolation and depression, and many ultimately did not survive these conditions. The Canadian Armed Forces described in visceral terms the unconscionable quality of life and care in the long-term care homes into which they were sent to provide emergency aid. At the time of writing this report, a year and three-quarters since the first known long-term care outbreak, more than 4,023 residents and at least 10 staff have died as a result of COVID-19 alone. It is the worst long-term care mass casualty in our province’s history.

While health and safety issues were unquestionably worsened by COVID-19, in many ways the pandemic threw into sharp relief the systemic negligence that had put private for-profit interests, tax cuts, and decades of public spending curtailments before the quality and sufficiency of care for the elderly. Repeated academic studies published in peer reviewed journals had found that for-profit long-term care is worse than public and non-profit long-term care across a whole range of measures and outcomes. Yet Ontario adopted and pursued policies promoting for-profit privatization.

Advocacy organizations like the Ontario Health Coalition, Concerned Friends, the Advocacy Centre for the Elderly and long-term care workers’ and nurses’ unions fought from the late 1990s on to overcome the industry’s lobby against comprehensive annual surprise inspections, and for improved levels of care, including enforceable minimum care standards. At the same time as increasingly complex “patients” were offloaded from public hospitals into long-term care, the labour force was restructured to reduce the cost of staffing and transfer the burden of care increasingly to less trained and lower paid staff. For decades, investigative journalists and advocates decried the lack of accountability for inadequate care, as well as greed and incompetence that had been longstanding issues. Some Health Ministers tried to strengthen public oversight and accountability only to have others weaken it in accordance with the industry lobby.

Now, hopefully with the worst of the pandemic behind us, Ontario is midway through allotting tens of thousands of new beds in 30-year license deals. There is no denying that our province is at a critical juncture. The terrible suffering in the pandemic could have — and should have—ushered in a new day for Ontario’s long-term care sector. Licenses covering approximately 31,000 old outdated beds end in July 2025 and they need to be replaced with newly built homes under new licenses. To be absolutely clear, these are not license renewals. The licenses are ending — and with them contracts with existing companies to operate the homes end — and new licenses need to be issued. In addition to replacing the old substandard beds, all of Ontario major political parties have promised tens of thousands of new beds, and there are 15,000 additional new beds slated to be built over 5-years and another 15,000 in the five years following. Thus, a total of approximately 46,000 beds are supposed be built and licensed by approximately 2024/2025 and an additional 15,000 new beds added by 2028-2030. In context, the current total capital stock of long-term care beds in Ontario is approximately 77,000. Thus, the turnover is a huge proportion of the existing stock. The public is paying for all the rebuilds and new builds for these beds in 30-year capital funding deals and operational licenses, whether they are for-profit, non-profit or public (municipal).

However, the promise of a new day is slipping away. Instead of building the 46,000 new and redeveloped long-term care beds under public and non-profit ownership in a new capital development plan, the Ford government is in process of allocating the majority of the new beds to for-profit corporations, and the majority of those to large chain companies. Chief among them are the same chains that were responsible for the worst death rates in the pandemic and terrible records of care over many years.

Many of the projects have not yet received final approval and the for-profit privatization of them can still be stopped, but it is undeniable that Ontario’s Ford government is moving forward with new licenses and expansions covering tens of thousands of beds to the worst of the for-profit operators. These licenses will result in the next generation of privatized for-profit long-term care unless public outrage is sufficient to force the government to stop it.

This report should serve as a warning and a call to action. It is not too late, but unless the Ford government is stopped, they are in process of setting up Ontario for another entire generation of for-profit long-term care.

*Please note: There is one home “Mill Pond Manor” in Milton that is in process for a new license with 224 beds for which there is no publicly available information about ownership type. It is not included in the for-profit and non-profit/public rows here but is included in the overall total.

Protections Against Privatization & Negligence/Incompetence

Ontarians do have some protections in law that should have prevented this scenario.

After the Harris government awarded the majority of 20,000 new long-term care beds they tendered from 1998 – 2001 to for-profits, the Liberal government took power in 2003 and subsequently rewrote Ontario’s long-term care legislation. The Ontario Health Coalition and others pushed for stronger protections against companies with poor records being given licenses. There had already been two major chain bankruptcies in Ontario and major exposes in the United States about for-profit long-term care corporations and litigation for deaths from dehydration and fraudulent billing. Yet companies like Extendicare had been granted licenses to operate new homes in Ontario. Extendicare had sold its holdings and left the United States after a giant settlement with the US Department of Justice. This is how the Department of Justice described it:

“Extendicare Health Services Inc. (Extendicare) and its subsidiary Progressive Step Corporation (ProStep) have agreed to pay $38 million to the United States and eight states to resolve allegations that Extendicare billed Medicare and Medicaid for materially substandard nursing services that were so deficient that they were effectively worthless and billed Medicare for medically unreasonable and unnecessary rehabilitation therapy services, the Justice Department and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) jointly announced today. This resolution is the largest failure of care settlement with a chain-wide skilled nursing facility in the department’s history.”

The U.S. Department of Justice settlement followed years of litigation against Extendicare in which the company had sold off its holdings and moved out of Florida, Texas and Kentucky. In fact, in 2001, the Conservative government of Mike Harris awarded Extendicare licenses to construct 11 long-term care homes just after a 1999 Florida jury had found Extendicare guilty of negligence and falsifying care records and awarded $U.S. 20 million against Extendicare, the highest such judgement in the state’s history. Soon after, Extendicare sold its nursing homes in Florida and Texas, left those states, and expanded in Ontario.

In order to protect Ontarians from companies with records of poor care, negligence and fraud, the Liberals strengthened requirements in their new Long-Term Care Homes Act requiring the Ontario government promote non-profit (including publicly owned) long-term care. Further, they reinforced provisions regarding awarding of licenses to operate beds. The legislation now requires that the government make its licensing decisions based on the operational records of applicants in providing care; including whether they are competent, operate in accordance with the law and with integrity, and have operated without compromising the health and welfare of the residents for whom they are responsible. Despite this, the Ford government is in the process of allocating the highest proportions of bed licenses to chain companies with among the worst pandemic death rates in the province and poor operational records stretching back for years. At the time of writing this report, the Ford government is also in the process of changing the legislation to seek to remove the impediments in the law to facilitate this.

The Ford government has not published a comprehensive list of the new beds and rebuilds available to the public. The following report contains a list of all of the licenses in process that we have been able to find, including new beds and rebuilds by ownership type and corporation name/municipality. In Appendix 1 there is a full list of licenses in process by region and city/town. In total, we were able to find licenses covering 30, 486 beds in process announced by the Ford government and 2,282 beds in process announced by the previous Liberal government that have been reannounced by the Ford government. Of the 30,486 beds announced by the Ford government the majority – 16,304—are in process of being allocated to for-profit corporations. A minority are in process of being awarded to non-profit (10,990) and public (2,918) entities.

Full information about whether each of these projects has been given final approval is not available. Many are in process and not finalized. Thus, they could be stopped. The Ontario government’s long-term care consultation website contains only a partial list of projects for which approvals are complete and a list of projects for which consultations are in process. There is no publicly available list of projects that have not yet reached the stage of public consultation and those that have been approved and subsequently dropped off the government website. We have included all the information that we could find regarding where the projects are in the approvals process.

How We Got Here

In 1998, for the first time in Canadian history, Ontario’s Conservative provincial government led by Mike Harris created a policy that provided for-profit long-term care corporations with public funds to build long-term care homes that they would then own and operate for their own profit. The plan was to cut thousands of hospital beds, then put 20,000 longterm care beds out to tender. Those who won the tenders would build the long-term care homes and be paid back for the construction costs over 20-years in per deims set by the province. They would also get a 20-year operational license, with revenue streams for personal care, food, accommodations, programs and services and additional funding pools from the province. In addition, they would get residents’ fees for their room and board, and they were virtually guaranteed to have full homes because even in 1998 waiting lists across Ontario for long-term care already numbered 18,000. At the same time, capital grants for municipalities and non-profits to build homes were cancelled. (Prior to 1998, municipalities and non-profits could access a 50% capital grant from the province to build long-term care homes.) The non-profit longterm care sector complained from the beginning that the Harris government’s capital development scheme was set up for the for-profits.

With the new capital funding policy in place, the Harris government proceeded to tender 20,000 long-term care beds. More than two-thirds of the new beds were awarded to for profits with almost 40 percent of those going to Extendicare, Leisureworld and CPL REIT. Thus, the balance — which had, until then, favoured public and non-profit ownership– was tipped and the majority ownership of Ontario’s long-term sector became for-profit. Mike Harris left office in 2001 and subsequently became the chair of Chartwell, a for-profit chain. Ernie Eves, Mike Harris’ Finance Minister left office in 2001 and a month later it was announced he would join the board of RREIT (which bought CPL REIT) one of the prime beneficiaries of the capital funding program set up by the Harris government. Ernie Eves later returned to politics to become Mike Harris’ successor as premier. Previous Conservative Premier Bill Davis became the chair of for-profit LTC chain Revera in 2001 and served as chair emeritus until his death.

The basic structure of the Harris government’s capital development plan has continued ever since. The Liberals increased the subsidies for developments and redevelopments twice to try to incentivize older homes (majority for-profit) to redevelop. They also extended the licenses — 20-year licenses became 30-years (see Appendix 4). The Ford government has increased the subsidies for bed developments and redevelopments twice again since it took office.

The Next Generation of Ontario’s Long-Term Care Licenses

Prior to the pandemic, Ontario had more than 78,000 long-term care beds and 57% of our province’s long-term care homes were for-profit. After the first wave of COVID-19 the province set new policy to end 3- and 4- bed shared rooms. The province is requiring homes to reduce overcrowding by attrition. New residents cannot be admitted to rooms that have more than two beds. This has reduced the total capital stock to approximately 77,000.

According to Ministry data, there are approximately 5,600 “B” beds and approximately 24,700 “C” beds for a total of approximately 30,300 outdated beds with licenses that end in July 2025. (See Appendix 4 for details.) The majority of the operators that own these older long-term care homes are for-profit corporations that chose not to upgrade their beds even though the provincial government offered them increasing amounts of public money as an incentive to do so.

Building standards for long-term care beds were updated in 1998 by the Harris government and again in 2015 by the Liberal government. There has not been an update by the Ford government prior to the building of all of the new and redeveloped beds to the standards to reflect post-pandemic learning or even promised initiatives such as air conditioning in all resident rooms.

It takes approximately 3-years from the signing of a development agreement with an operator to the long-term care bed being put into operation. With the 15,000 new beds that are supposed to be completed by 2025, there is a total of approximately 46,000 beds that are supposed to be allocated over the next year (including those that are in process now).