B.C. retirement-home chain sold to Chinese

“The Trudeau government has green-lighted the sale of one of BC’s biggest retirement home chains to a Beijing-based insurance titan with a murky ownership structure in a deal that gives China a foothold in Canada’s health-care sector.” Retirement Concepts owns and operates 24 retirement long term care facilities, largely in BC and Alberta.

The Council of Canadians and its chapters have been vocally against this sell-off (see here (external - login to view) and here (external - login to view)). We had also sent a letter late last year to the Minister of Innovation expressing both our concern with the sale and the process surrounding the review.

The Globe previously reported this, “massive Chinese insurance company with a murky ownership structure is buying a majority stake in one of British Columbia’s biggest retirement home chains, a deal believed to exceed $1-billion.” Currently, Retirement Concepts is the highest-billing provider of assisted living and residential care services in the B.C. and the government paid the company $86.5-million in the 2015-16 fiscal year. The company currently controls more than 10 per cent of residential care beds contracted by B.C.'s health authorities — more than any other non-profit or for-profit provider.

The article also highlights that,

Liberal approval of billion dollar sale of B.C. retirement-home chain 'doesn't pass the smell test' | The Council of Canadians (external - login to view)
The federal government has approved the sale of one of B.C.’s largest seniors’ care home chains to a Beijing-based conglomerate with a “murky” ownership structure, to say the least.

While the details of Investment Canada’s ruling are still under wraps, a spokesperson for Innovation, Science and Economic Development Minister Navdeep Bains told the Globe and Mail “no issues were raised” by the takeover of Retirement Concepts, which owns 21 seniors residences across B.C., by Cedar Tree Investment, a holding company controlled by China’s Anbang Insurance.

The minister’s benign assessment contrasts sharply with the controversy attending recent Chinese acquisitions in the U.S. and Europe. Over the last year, regulatory concerns have led to the cancellation of more than 30 deals worth $75 billion, according to the Financial Times, including Anbang’s attempted $1-billion acquisition of a landmark California hotel.

Beyond these corporate intrigues — and that awkward Nov. 7 “cash for access” meeting at which host Miaofei Pan “made the case to the prime minister to allow Chinese investment in seniors’ care and real estate development” — Canada’s controversial 2012 investment treaty with China clearly raises some important issues with respect to the takeover.

The first is how the Foreign Investment Promotion and Protection Agreement provides Cedar Tree, and its Anbang backers, an extrajudicial means to contest new regulations, such as those to protect vulnerable seniors, ensure quality of care or maintain adequate training and staffing levels in the fast-growing (external - login to view) private retirement home industry.

Another is how the web of investment protections in the FIPA and similar deals shifts the risk of such cross-border deals going bust from foreign investors to Canadian taxpayers.

Canada’s retirement and long-term care system is under-regulated in many provinces. An investigation by the CTV News show W5 found (external - login to view) at least 1,500 cases of staff-to-resident abuse in homes across Canada in 2013, a number the news program claimed to be low due to under-reporting. Retirement Concepts, B.C.’s biggest private provider, has faced complaints (external - login to view) in the past, including staffing shortages and the use of subcontracting to fire and then rehire employees at lower wages.

When shareholder profits become a priority for essential services, quality of care tends to decline. A 2016 study by Dr. Margaret McGregor of Vancouver comparing international experiences with long-term care found that for-profit facilities consistently provided poorer service. “There is this conflict of interest between the profit motive and actually spending money on things like staffing,” she said.

Unfortunately, the B.C. government has embraced the private sector rather than look to public or not-for-profit options for meeting increasing demand for seniors’ care.

B.C. Finance Minister Mike de Jong told the Globe and Mail he’s not worried about the sale of Retirement Concepts to a Chinese company, since no matter who owns the service they must follow provincial standards.

But here’s where the FIPA (external - login to view), signed by former prime minister Stephen Harper in 2012 and ratified in 2014, makes an already murky situation even murkier.........

https://thetyee.ca/Opinion/2017/02/2...rs-Care-Giant/ (external - login to view)
no new posts