Health Minister Michelle Thompson says long-term care company Shannex will pay $46 million for Hogan Court in the Halifax suburb of Bedford. THE CANADIAN PRESS/HO - Province of Nova Scotia/Shannex
In Nova Scotia, a provincial health care renovation initiative that faced sharp criticism from the auditor general is transitioning to the management of a private company. Health Minister Michelle Thompson revealed on Friday that Shannex, a long-term care firm, will pay the government $46 million to assume control of Hogan Court, an incomplete hotel being repurposed into a facility for patients no longer requiring hospital care.
Thompson announced that Shannex presented an unsolicited proposal and will take charge of the building's renovations in the Halifax suburb of Bedford starting next month. The company will also construct a 110-room addition, bringing the total capacity to 178 rooms.
The minister expressed that the project's expansion will allow the facility to offer a broader range of care services than initially envisioned through the hotel conversion. She described Shannex's proposal as an evolution of the project, leading to a more efficient and exciting model than previously envisioned.
According to officials, the additional space will accommodate physiotherapy and occupational therapy areas, ceiling lifts, and suites for bariatric care, although the final design details are pending.
The decision to expand the Bedford project means that a planned transitional care facility in Bayers Lake, Halifax, will not proceed, prompting health officials to explore alternative uses for the government-owned land.
The Health Department acquired the hotel property from Cresco Holdings in January 2023 for $34.5 million. To date, the purchase and renovations at Hogan Court have incurred costs of just under $46 million.
In a damning report released the previous month, auditor general Kim Adair criticized the initial purchase as an "unusual arrangement" lacking appropriate due diligence. Adair noted that the estimated $15 million renovation cost had escalated to $17.4 million, with the bed count reduced from a potential 80 to 68.
The auditor also raised concerns about approximately $81 million in untendered contracts for both transitional care facilities, stating that they did not adhere to government procurement protocols. Among these contracts was a five-year, $67.5 million agreement awarded to Shannex to operate Hogan Court.
Thompson has consistently defended the purchase, emphasizing its necessity to alleviate overcrowding in hospitals and emergency departments.
While Liberal Leader Zach Churchill views Shannex's involvement as salvaging a flawed project plan, NDP Leader Claudia Chender questions the decision to transfer ownership of a facility intended to be publicly owned to a private entity.
Under the new arrangement, the renovated existing building is set to open by December, with the addition expected to be completed by April 2026. Final costs will be disclosed upon completion of the deal, with estimated construction expenses per room amounting to $675,000.
The transitional care model will cater to patients no longer requiring hospital beds and individuals awaiting long-term care placement who cannot reside at home.
