(May 8, 2007)<\/p>\n
TO: Ontario Public Service Employees Union
\nService Employees International Union
\nOntario Council of Hospital Unions
\nOntario Health Coalition
\nFROM: Steven Shrybman (Ext. 2456)
\nDATE: May 8, 2007 Matter No: 06-643
\nRE: William Osler Health Centre P3<\/p>\n
1. On April 26, 2007 the Ministry of Health and Long Term Care (the Ministry) filed the
\nrecord of its approvals for the William Osler Health Centre (WOHC) P3 hospital with the
\nOntario Divisional Court despite the determined efforts by the private consortium
\ninvolved in the P3 to prevent its details from being made public. These documents, now
\nfiled as part of the public court record, provide unprecedented insight into the details of a
\nP3 hospital scheme.<\/p>\n
2. This memo briefly describes the events leading up to this point in the litigation, and
\nsummarizes some important information about the P3 scheme that we can only now
\ndiscuss with you.<\/p>\n
3. In our view, the inevitable conclusion that must be drawn from assessing the full details
\nof the WOHC P3 is that it represents a serious betrayal of the Ministry\u2019s obligation to
\nmanage the public purse, and to ensure that hospital services are provided in an efficient,
\ntransparent and accountable manner.<\/p>\n
4. Not only are the costs of the WOHC P3 much higher than a public sector equivalent, but
\nthe structure of the scheme compromises the ability of the WOHC Hospital Board to
\nmeet the needs of patients where these conflict with the interests of private investors.
\nThis in turn is likely to compromise the Board\u2019s ability to ensure that hospital services
\nare allocated in a manner that is consistent with the requirements of the Canada Health
\nAct: ie. according to need, not ability to pay.<\/p>\n
The WOHC P3 Scheme<\/strong> 6. As we know, the WOHC P3 represents a marked departure from the traditional model for 7. In September, 2003, we initiated judicial review proceedings to quash the approvals for THICC\u2019s Efforts to Prevent Public Access to Details of the WOHC P3 Scheme<\/strong> 9. From the outset, THICC represented the principal opposition to disclosure of the details 10. While THICC. was willing to produce these documents for our review, it did so on strict 11. When we ascertained that the details of the P3 scheme were clearly relevant to our case, 12. Thus it was on April 26, 2007, that the Ministry finally filed the approvals it had i) the details of the Ministry\u2019s cost sharing arrangement with the WOHC, which 1 <\/p>\n
\n5. In mid-2003, WOHC entered into a P3 hospital scheme with the Health Care
\nInfrastructure Company of Canada (THICC) that was approved, and will be funded by
\nthe Ministry. Under the scheme, THICC is to design, construct, finance, operate, property
\nmanage and maintain a hospital facility, and provide certain non-clinical services for the
\nhospital.<\/p>\n
\nfunding and operating public hospitals in Ontario in two key respects:
\ni) capital financing for the hospital is being provided by the private sector, without
\nthe assistance of a capital grant from the provincial government;
\nii) the hospital will lease the hospital premises from THICC, which is also to
\nprovide many non-clinical support services for a period of 25 years. The lease
\nand services contracts cannot be severed without THICC\u2019s consent.<\/p>\n
\nthe scheme given by the Minister under the Public Hospitals Act. The application asserts
\nthat the Ministerial approvals and Funding Agreement relating to the WOHC P3 scheme
\nwere unlawful for several reasons, including that:
\n(i) the highly complex commercial and investment structure of the P3 regime
\nwill substantially undermine the ability of the WOHC hospital board to govern,
\nmanage and supervise the P3 hospital;
\n(ii) the scheme accords a private consortium unprecedented control over the
\ndelivery of publicly funded hospital services;
\n(iii) it was patently unreasonable for the Minister to agree to fund the scheme
\nbecause it is substantially more costly, but offers no advantage over the
\nconventional model of public funding and control of such hospital facilities and
\nservices; and
\n(iv) it was also improper for the Minister to approve and fund the P3 scheme
\nwithout requiring disclosure by WOHC and THICC of all documents describing
\nthe scheme, and the obligations and liabilities of the WOHC and THICC pursuant
\nthereto.<\/p>\n
\n8. Soon after the litigation was commenced, THICC intervened to prevent the Ministry from
\nfiling with the court an unexpurgated copies of the approvals at issue, as the Ministry was
\nrequired to do under the Judicial Review Procedure Act. THICC asserted that certain
\naspects of P3 scheme were proprietary and confidential and threatened to sue the
\nMinistry if it allowed public access to these documents, or produced copies for our
\nreview.<\/p>\n
\nof the WOHC P3. To follow THICC\u2019s machinations to keep this information secret, it is
\nimportant to understand that the documents at issue fell into four broad categories:
\n(i) documents which represent the approvals and funding agreements issued or
\nentered into by the Ministry for the WOHC P3 (the approvals documents);
\n(ii) documents prepared by the Ministry or WOHC prior to these approvals and
\nfunding arrangements being granted or authorized (the review documents);
\n(iii) the Project Agreement and leases relating to the WOHC P3 which were
\napproved by the Ministry under the Public Hospitals Act (the Project Agreement);
\nand
\n(iv) various documents, including services contracts, shareholder agreements,
\ntrust agreements, performance guarantees, and other documents which describe
\nthe complex commercial arrangements among the private investors and
\ncontractors involved in the P3 scheme (the Implementation Documents).<\/p>\n
\nconditions of confidentiality and only for the purpose of allowing us to ascertain whether
\nthe documents were relevant to our case. As you know, these conditions prevented us
\nfrom discussing the details of the scheme with you, and it is only at this time that we can
\ndo so.<\/p>\n
\nTHICC nevertheless insisted that they be kept confidential. Pursuant to your instructions,
\nwe then moved to have the matter of relevance judicially determined. That proceeding led
\nto several others as THICC failed in successive efforts to preclude public access to the
\nfull details of P3 scheme (1). Its efforts culminated on March 15, 2007 when THICC
\nabandoned its appeal to the Ontario Court of Appeal from the order of Justice Ferrier
\nholding that the public interest in having open judicial processes outweighed any claim to
\nbusiness confidentiality that THICC had proven.<\/p>\n
\naccorded the WOHC P3 hospital scheme several years earlier. Even so, certain
\ninformation relating to the scheme has not yet been revealed, including:<\/p>\n
\nit was able to persuade the court would, if revealed, prejudice its ability to
\nnegotiate funding arrangements with other hospitals; (2)
\nand
\nii) the implementation documents relating to the WOHC P3 scheme3
\n, which as noted describe arrangements inter-se the members of the THICC consortium.
\nThese remain exclusively in the possession of THICC and ourselves, and their
\ndisposition remains a matter of contention. For present purposes, they are not
\nreferred to further.
\n[this excerpt in taken from a longer reporting memo of this date]<\/p>\n
\nThese involved various proceedings before Mr. Justice Winkler who had been assigned to manage our case; Master Polika to whom Justice Winkler had assigned certain questions relating to THICC confidentiality claims; and Justice Ferrier on THICC\u2019s appeal of the Master decision requiring the Ministry to largely comply with its obligations under the Judicial Review Procedure Act
\n2
\nOn May 5, 2007 the Ministry advised that it was abandonning its position that this information be sealed in the
\nCourt record to prevent public disclosure, but it has yet to amend the judicial order sealing the record in this regard. 3
\nSchedule 1# to the Project Agreement defines \u201cImplementation Documents\u201d to include contracts, leases, guarantees, and other agreements. The definition is redacted to remove reference to certain Implementation Documents.<\/p>\n