Acute Care Alberta has extended its contract for another year with a private surgical facility at the centre of probes into health procurement and contracting.
The provincial agency confirmed to CBC News this week it has inked a new $34-million, one-year contract with Alberta Surgical Group (ASG) as of Nov. 1, 2025 until Oct. 31, 2026, to provide approximately 4,000 orthopedic surgeries.
Acute Care Alberta posted the contract on its website after CBC News asked whether that relationship was continuing past the previous contract’s expiration date.
It is the public health system’s third contract extension with ASG to provide publicly funded orthopedic surgeries — primarily hip and knee operations — at the south Edmonton facility.
Former Alberta Health Services CEO Athana Mentzelopoulos is suing AHS and the health minister for wrongful dismissal, alleging she was terminated after raising questions about irregularities she found with AHS contracting and procurement.
In court documents, Mentzelopoulos claims she was concerned that some chartered surgical facilities (CSFs) were charging much more per procedure than others. She claimed she was politically pressured to extend ASG’s contract.
In statements of defence, the government and AHS denied the allegations and said Mentzelopoulos was fired for failing to fulfil her duties. Neither the allegations in the statement of claim, nor the statements of defence, have been proven in court.
Both Alberta’s auditor general and RCMP have been investigating allegations of conflict of interest and political interference in contracting.
A government-ordered report authored by retired Manitoba judge Raymond Wyant found real or perceived conflicts of interest in how AHS awarded contracts for CSFs.
The new Acute Care Alberta agency took over responsibility for CSF contracts in April as part of the provincial government’s restructuring of the health system.
Wyant’s report, which was released in October, says Alberta Health and AHS didn’t follow established policies when awarding the orthopedic surgery contract to ASG. The business had initially been unsuccessful in its bid, but was later offered a temporary contract without AHS requesting new proposals.
Acute Care Alberta and the press secretary for Hospital and Surgical Health Services Minister Matt Jones did not reply directly to emailed questions this week about why the health agency extended the contract.
WATCH | Report into health procurement practices released:
Wyant report into AHS contracts released to the public
A report from a retired judge looking into health-care procurement practices finds two former Alberta Health Services employees had real or perceived conflicts of interest. The premier says Raymond Wyant found no fault with her government.
Wyant found Alberta Health and AHS did not investigate a potential conflict of interest related to two former employees who left to work as consultants. One former employee, Blayne Iskiw, was providing ASG with advice after he left AHS.
Lori Williams, an associate professor of policy studies at Mount Royal University, said the ASG contract extension raises questions about why Acute Care Alberta would continue to contract with the company while other probes are still ongoing.
“We want value for money and we want to be sure that the facilities that are providing the services are doing … the best job possible. And those questions, I think, are being raised currently,” Williams said.
NDP hospital and surgical health services critic Sarah Hoffman said Wednesday that a short-term extension of ASG’s contract is understandable to ensure patients still have access to surgery, but it is not a long-term solution.
“It used to be that they talked about fiscal responsibility, but it’s very clear from the documents that have been made public that this isn’t fiscally responsible at all,” she said of the disparate prices CSFs are charging per surgery.
Hoffman repeated the Opposition’s call for an independent public inquiry into health procurement.
ASG’s lawyer, Rose Carter, said the health system’s rules prevent the company from publicly commenting on the contract.
Work continues on new Enoch surgical facility
The government has previously said it was extending ASG’s contract for orthopedic surgeries because its first-choice proponent, a partnership between Enoch Cree Nation west of Edmonton and Weiss Medical, wasn’t yet ready to open. The centre had initially said it would open in the summer of 2025.
In an emailed statement Wednesday, Enoch Cree Nation Chief Cody Thomas said general construction is complete on the $80-million River Cree Medical Professional Centre, which will house River Cree Weiss Surgical Care+. The facility plans to use three of six planned operating rooms to perform orthopedic surgeries, completing about 3,000 procedures per year.
“By creating a culturally safe surgical facility on Enoch Cree Nation, we’re improving access and trust for our members and any Indigenous people accessing our facility,” Thomas said. “But we’re also adding much needed surgical capacity for the entire Edmonton region.”
The surgical centre should be ready by the third quarter of 2026, and they have applied for accreditation from the College of Physicians and Surgeons of Alberta, Thomas’ statement said.
But Jones hasn’t signed the contract yet with Enoch.
“We are very, very close,” he told reporters at the legislature on Wednesday. “That facility would take activity that would otherwise be done in a hospital, freeing up room for more urgent and more complex surgeries.”
While Acute Care Alberta extended ASG’s contract, Jones announced in the legislature Tuesday that contract talks with proponents of two proposed CSFs in Red Deer and Lethbridge had been cancelled.
The corporate entity proposing to build and run those two CSFs is called Prairie Surgical Centre, and is jointly owned by three doctors who have a stake in ASG, along with consultant and former AHS employee Iskiw and businessman Sam Mraiche, according to corporate registry records and a letter Mraiche’s lawyer sent to media in April 2025.
Mentzelopoulos’ wrongful dismissal suit claims she was under political pressure to finalize the Red Deer and Lethbridge CSF contracts and had concerns that Prairie Surgical Centre’s proposed prices were higher than internal costs or the market value.
Mentzelopoulos said she also expanded AHS investigations to look at procurement with medical supply company MHCare. The company, owned by Mraiche, secured a $70-million contract in late 2022 to import five million bottles of children’s painkillers from Turkey during a national drug shortage.
MHCare’s lawyers have denied any suggestions of wrongdoing by the company, and say that Mentzelopoulos’ overpricing claim is untrue.
Opposition questions why contracts not cancelled sooner
Jones told reporters the Red Deer and Lethbridge CSF proposals were “legacy contracts” first proposed in 2022.
“No formal agreement had been reached, and since then, there’s been a complete transformation of the health-care system,” he said. “We are changing our procurement practices, we are changing the way that we intend to fund surgeries.”
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NDP Leader Naheed Nenshi said the health system terminating its CSF plans with Prairie Surgical Centre validates Mentzelopoulos’ concerns about the arrangements.
In question period on Wednesday, Nenshi asked Premier Danielle Smith why the government didn’t cancel the contracts sooner and whether she will apologize to Mentzelopoulos.
”We only discovered many of the things and the problems with the contracts after the fact,” Smith replied.
None of the five owners involved with Prairie Surgical Centre had responded to questions about the cancelled agreements by publication time.
New call for interested private surgery centres
AHS has issued a request for interest to find out who is interested in offering what privately delivered surgeries, how many, where in the province, and for what cost.
“If they’re already providing surgeries for us, perhaps they could look at a scope expansion,” Jones said.
The information it gleans will inform a new round of requests for proposals for private surgeries wanting to perform publicly funded procedures, to be issued in the new year, Jones said.
Right now, about 20 per cent of Alberta surgeries take place in CSFs, he said. The government aims to send more straightforward surgical cases to CSFs to free up hospital operating rooms for more emergency and complex procedures, he said.