Health funding fight lands First Nations service providers in court

Fight includes allegations of defamation, workplace bullying, inadequate oversight


A Vancouver Island first nations health services provider will tackle B.C.’s First Nations Health Authority (FNHA) in B.C. Supreme Court next week to get funding it says it has been wrongfully withheld, posing a threat to the health of those it serves.

The Inter Tribal Health Authority fears the FNHA, funded by Victoria and Ottawa to finance regional organizations, has torn up funding contracts so it can take over services provided to thousands of people.

“Our biggest concern is that services we provide to the people in the villages ... will be terminated,” said Inter Tribal Health Authority (ITHA) associate director Jim Wilson. “FNHA simply does not have the capacity to serve the people the way we do.”

The cancellations have sparked allegations of retaliation, conflicts of interest, bullying and harassment against FNHA officials from the ITHA, which serves 14 Kwakwaka’wakw and 15 Coast Salish First Nations, as well as some mainland communities.

In a notice of civil claim filed in Victoria Jan. 24, the ITHA alleges FNHA failed to pay more than $1 million over the past year and failed to pay $734,000 Jan. 31.

“ITHA cannot approve medical services for their clients because the only service for funds is FNHA,” the claim said. “All of this is likely to cause irreparable harm. ITHA has no other financial services and will collapse.”

ITHA lawyer Darwin Hanna said the authority has already received an order that the FNHA immediately release $412,000.

FNHA did not respond to requests for its court filings in response to ITHA’s allegations.

ITHA officials have already sought help from Ottawa to step in and mediate, saying they believe the terminations are retaliations for outside disputes, while FNHA said it’s moving to find service providers to replace ITHA.

Contract cancellations

FNHA told the ITHA Dec. 21 – after its offices had closed for the Christmas vacation, ITHA said – that it was cancelling two health service contracts, on the grounds that ITHA allegedly failed to meet audit obligations, charges the ITHA rejects as defamatory.

FNHA has also said the deals were cancelled without cause with 90 days’ notice as per contracts.

“Although not required, the board has been kept informed every step of the way and has added its support to the decision to end the funding agreements,” FNHA said in a statement when asked for board minutes showing contract cancellation approval.

ITHA lawyer Darwin Hanna disputes that, saying it was FNHA chief operating officer Richard Jock who signed the termination and had no authority to do so.

“Only a member of the board of directors would have such authority to sign the termination letter,” Hanna said. “FNHA has not disclosed a supporting a resolution of the board of directors in accordance with the FNHA bylaws.”

Hanna said one attempt to resolve the conflict with a meeting of both authorities’ boards failed because the FNHA board did not show up.

The West Vancouver-based FNHA plans, designs, manages and funds the delivery of First Nations health programs and services in British Columbia. Services to ITHA members include tele-ophthalmology, nursing, mental health support and other programs.

Ottawa handed service responsibility to the FNHA as part of the 2013 BC Tripartite Framework Agreement.  Last year, the province gave FNHA $78 million in funding while Ottawa provided $505 million for FNHA activities in five B.C. regions – Fraser Salish, Interior, North, Vancouver Coastal and Vancouver Island.

Dispute arose after audits

The dispute stems from a January 2018 FNHA audit report saying Nanaimo-based ITHA had board oversight problems, management and staff conflicts, corporate credit card problems, improperly performed criminal record checks and improperly maintained personnel files, among other issues.

“There are many operations concerns at the board and management level including culture, expenses, conflicts and other serious matters,” the report said.

ITHA director of operations Marjorie Reid said the audit was taken seriously and consultants brought in to address concerns, particularly personnel issues. She said a recent operational checkup by an accounting firm concluded, “the authority seems well-managed and has adequate controls in place.”

ITHA executive director Trish Cassidy said FNHA has no right to cancel the agreements. She said FNHA is an intermediary for the federal government in providing funding. “Health Canada has an obligation to people across Canada, a fiduciary responsibility to provide services,” she said.

While the FNHA is the operational arm, the First Nations Health Council chaired by Grand Chief Doug Kelly handles political considerations. He said ITHA accountability and service issues have remained unresolved for two years.

“The FNHA is taking great care to make sure they are doing it right,” Kelly said, referring operational questions to Jock, who said work continues with ITHA management to wind up service operations.

“Funding will not be released,” Jock said. “Any attempts to work with the organization has been met with legal responses and not substantive responses.”

The ITHA alleges the funding withdrawal is retaliation for the filing of a WorkSafeBC complaint and an RCMP report after a May 2018 incident involving Jock and ITHA executive director Trish Cassidy.

Documents say the situation stems from a May 2018 ITHA meeting in which Jock allegedly attempted to bring a yet-to-be-sworn-in director into a confidential meeting.

A November letter from lawyer Richard Johnson to the FNHA said Jock became angry when told his behaviour was inappropriate. The letter called the behaviour toward Cassidy culturally and professionally inappropriate and aggressive.

That situation led to the WorkSafeBC and RCMP complaints, and to allegations the FNHA was retaliating due to the complaints.

“Everything I’m doing is based on an organizational approach. None of the decisions are personal,” Jock said. “I don’t really know her.”

The FNHA confirmed no one individual could terminate the ITHA contracts, adding complaints against Jock had been investigated and no evidence found to substantiate allegations.

However, with WorkSafeBC and RCMP complaints outstanding, Hanna said Jock remains in a conflict of interest relating to any FNHA-ITHA dispute, a situation rendering the terminations void.

“He must recuse himself with any dealings with Trish Cassidy, including corresponding directly with her,” Hanna said.

ITHA’s claims against the FNHA echo findings of a 2015 Auditor General of Canada review of the FNHA.

“We found gaps in the policies we examined, pertaining to conflict of interest, recruitment, personnel security, administrative investigations, financial information and disclosure, and employee relocation,” the review said, recommending FNHA review policies on accountability, hiring on merit, workplace misconduct and conflicts of interest.

Jock said those conclusions were drawn when the FNHA was a “young organization” is no longer applicable.

An anonymous letter to the auditor general triggered that audit. ITHA officials suggested a similar letter began their problems, suggesting that too may be retaliation for the federal FNHA audit.