Alberta Premier Danielle Smith removed her government's deputy minister of health Wednesday but bucked calls for a public inquiry into allegations of government interference in lucrative medical contracts.
Speaking to media in Calgary for the first time since the allegations surfaced two weeks ago, Smith said Andre Tremblay is being replaced in the Health ministry.
However, he is to continue as the head of Alberta Health Services, the province's front-line health agency.
The Opposition NDP has called for the United Conservative Party government to order a judicial public inquiry to get to the bottom of the scandal.
Asked why she hasn't ordered an inquiry into the allegations of government interference, Smith spoke instead about holding the health agency to account.
"These are AHS internal processes," she said. "AHS internal processes have been a bit of a black box to government for some time," she said.
The former head of AHS, Athana Mentzelopoulos, alleges in a lawsuit filed a week ago that she was wrongfully dismissed by Tremblay from her job for looking into questionable contracts pushed by government officials as high up as the premier's office.
The statement of claim alleges Mentzelopoulos was pressured by government officials to sign off on contracts with surgical facilities at unjustified, inflated prices, potentially leading to hundreds of millions of dollars in profit for private clinic owners.
The allegations have not been tested in court, and a statement of defence has not been filed.
Smith has said she was not involved in any wrongdoing and that Health Minister Adriana LaGrange continues to have her confidence.
On Wednesday, the premier turned the tables on AHS, saying the agency has long frustrated the government's mission to expand publicly funded, private surgical delivery.
"It is clear that they would rather keep all surgeries in hospitals only operated by Alberta Health Services," said Smith.
"I want to identify if there's any wrongdoing and, if there is, there will be repercussions. But we have to first understand if there's a reasonable explanation for why it is that there are different prices being charged at different facilities for the same services," she said.
LaGrange repeated that she believes some claims in the lawsuit are false, while others warrant further investigation.
"We will be filing our statement of defence in the coming weeks and will be vigorously — and I mean vigorously — defending against this claim," LaGrange told the news conference.
She has said the dismissal of Mentzelopoulos was not linked to the former CEO's investigation and that the ministry was being stonewalled by AHS for months in its attempt to find evidence of misconduct.
"I firmly believe that concerns related to the procurement processes must be reviewed and investigated thoroughly to identify any potential wrongdoing or procurement process deficiencies," LaGrange said.
Critics have called for LaGrange to be removed as health minister. Health-care unions and advocacy groups also want an independent investigation.
UCP cabinet minister Peter Guthrie also said Smith should move LaGrange to a different portfolio and shuffle Tremblay while the government oversees its review. Other cabinet ministers said they stand by LaGrange.
Smith said the government is setting up a "legal conflicts wall" to separate the ongoing work of those named in the allegations, including Tremblay and LaGrange.
That ongoing work includes reducing AHS to a hospital services provider under one of four new governing agencies that report to cabinet.
Smith said LaGrange “had nothing to do with procurement, and that AHS controlled the process of surgical facility contracts from beginning to end.
It was reasonable for government to ask questions about the status of contracts that had been in negotiation, the premier said.
"If it's taking four years, it's actually quite legitimate to say, 'Hey, what's the delay?' And that's what the minister did," said Smith.
The lawsuit alleges that throughout 2024, Mentzelopoulos was pressured by various provincial officials, including Marshall Smith, then the premier's chief of staff, to sign off on contracts for private surgical facilities despite concerns over how much was being paid and who was benefiting.
Marshall Smith left the government last fall. Last week, he said the allegations were "outrageous and false" and that he's eager to meet with investigators.
The premier said she wasn't aware of any inappropriate phone calls her chief of staff allegedly made to Mentzelopoulos. She said his role was to make sure "the decisions of the government were executed" — in this case, reducing surgical wait times by contracting more private surgical centres.
Alberta's auditor general Doug Wylie is also investigating contracting and procurement at the health agency and health ministry.
NDP leader Naheed Nenshi said the government’s response to the allegations lacks transparency, since individuals will still be investigating and reporting to their bosses.
“What we saw from the premier, as always, was a master class in gaslighting – in deflecting, in diffusing, in attempting to talk about other things and make people mad about other things, and not taking any responsibility,” Nenshi said.
AHS has said it would stop awarding contracts to firms involved in the allegations, but it has not provided a list of those companies.
This report by The Canadian Press was first published Feb. 19, 2025.
— With files from Matthew Scace
Lisa Johnson, The Canadian Press
