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Hospitals built on wobbly foundations

Little paperwork supported plans to build new hospitals in Dawson City and Watson Lake, the territory's public accounts committee heard on Wednesday.

Little paperwork supported plans to build new hospitals in Dawson City and Watson Lake, the territory’s public accounts committee heard on Wednesday.

Craig Tuton, the chair of the board of trustees of the Yukon Hospital Corporation, and Jason Bilsky, the corporation’s CEO, were both grilled by the committee, along with other corporation officials and representatives from the Department of Health and Social Services.

The collection of witnesses appeared before Yukon’s legislators to explain how the corporation’s hospital construction projects ended up behind schedule and over budget.

In one of only a handful of answers Tuton gave, he said he never received written instruction to build two new hospitals, the price tag for which has now reached over $59.7 million.

“I believe, if memory serves me correctly, that the direction was given verbally. I don’t believe there was any other direction,” Tuton said. He remained largely silent for the majority of the four-hour questioning.

That wasn’t the only documentation missing when the auditor general examined the projects in a report released last February.

The auditor general also found that neither the hospital corporation nor the Department of Health and Social Services had done a needs assessment to prove that two hospitals were needed, that the decision to finance the buildings with bank loans wasn’t backed up by any business case, that no formal risk assessment was done and that the full costs of the projects were not known before construction began.

For nearly every one of those concerns, officials asserted they didn’t know what those reports were, or how to do it.

When asked whether the department or the corporation considered doing a needs assessment, Paddy Meade, deputy minister of Health and Social Services, said, “I think in good faith that’s what the folks at the time thought they were doing without the understanding of best practice and what is current.”

While a formal needs assessment wasn’t done, Bilsky said the corporation did try to examine what kinds of services both communities needed. It just didn’t keep any records of the assessments.

“Probably contrary to exactly what the auditor general is saying, there were some assessments made - as an example, expanded-scope nursing,” Bilsky said.

Bilsky faulted three factors for the hospital construction cost over-runs: delays with construction, the exclusion of specialized equipment like X-ray machines from the original budgets, and the cost of financing the projects with loans from private banks instead of the Yukon government.

The financing decision, he said, wasn’t up to the corporation, but Birgitte Hunter, the acting deputy minister for health and social services, couldn’t say how that decision was made either.

“I’m not aware of how the initial decision was made on what the choice was on the financing mode,” Hunter said.

After the auditor general’s report was released, the hospital corporation agreed with all of its findings. On Wednesday, the committee heard that the corporation has since created its own internal procurement policy to help guide its spending decisions in the future and work more closely with the department on future projects.

The corporation also agreed to conduct a needs assessment now, even though the buildings are nearly completed, in order to make sure that Yukoners get the best services they can out of the new buildings.

In his closing remarks on Wednesday, assistant auditor general Ronnie Campbell said that while the planning of the hospital projects had not been handled properly, his office was satisfied that once construction began, the projects were managed “adequately.”

Liz Hanson, chair of the public accounts committee, said she was largely satisfied with the answers they got.

“I think it went well. I think the public accounts committee ... it takes a while for a group of politicians to come around to the idea that when we get together as the public accounts committee, we’re shedding our partisan hats,” she said.

“We’re not there to get there to get into the debate about why did the government decide to do this. Once that decision is made, how do you ensure that it was done properly?” Hanson said.

“We also heard that, for the first time, the hospital corporation and Health and Social Services are working together and have developed a much more collaborative approach to sharing information and actually talking about what their roles in the overall health-care system are,” Hanson said.

But Klondike MLA Sandy Silver said he wasn’t so optimistic about Bilsky and Tuton ducking the difficult questions.

“We’re getting used to that. It happens in the legislative assembly a lot. That’s why I was so adamant in getting the hospital corporation to appear as witnesses,” Silver said.

“The biggest issues here is that these capital projects were built not based upon a needs assessment, but for political reasons. That’s been established, and it’s time to move on,” he said.

Contact Jesse Winter at