Shannex argues release of contract details would hurt expansion plans

A company running a growing chain of for-profit nursing homes in New Brunswick is arguing that releasing details of its contract to the public would jeopardize its expansion plans.

Shannex Inc. says granting a right-to-information request by Green Party Leader David Coon would reveal its trade secrets to its competitors, just as the company positions itself to more than double the number of nursing homes it runs in the province.

"There is a concrete example of financial harm," the company's lawyer, Ryan Burgoyne, told Court of Queen's Bench Justice Judy Clendening in a 90-minute hearing Tuesday morning.

• Shannex wins right to argue for secrecy of nursing-home contracts with province

Burgoyne said Shannex will bid on 10 new nursing homes the Gallant Liberal government recently announced it will build, and if its per-diem rates and other figures become public, competitors will be able to "eliminate" its competitive advantage.

"This is not fanciful or guesswork," Burgoyne said, using phrases from a precedent-setting Supreme Court of Canada decision.

"There's concrete evidence that Shannex is going to be bidding on these projects."

Each home will be subject to a 20-to-25-year contract with a 10-year renewal option, he said.

"Ten new nursing homes would represent a substantial increase in their business."

Protect trade secrets

Coon filed a request for the contract for a Shannex home in Moncton in 2016, using the Right to Information and Protection of Privacy Act.

Seniors Minister Lisa Harris released the contract a year ago but with key sections blacked out.

Coon appealed that decision to then-Information Commissioner Anne Bertrand, who recommended the documents be released in full. She said the information was about public money, not Shannex's money, and that there was no evidence the company would be hurt.

But Harris refused to heed that recommendation, prompting Coon to go to court.

The redacted information included "bed days" and per diems rates charged by Shannex, two figures that together determine what the province pays the company. It also included the number of full-time equivalent positions at the nursing homes.

If all of that information were released, Burgoyne argued, it would allow other companies to "reverse-engineer" the formula Shannex uses to negotiate contracts a trade secret, he said.

Burgoyne also argued that Bertrand did not contact Shannex in preparing her report and that's why she wrongly concluded the company would not be harmed.

Public has right to know

Coon argued that the public's right to know is paramount and that the right-to-information actallows only "limited and specific" exceptions to releasing information.

Most nursing homes are community-run, not-for-profit institutions that are subsidized by the province. That allows the public to see what the funding levels are, and the same principle should apply to private-sector homes, Coon said.

"This isn't about Shannex as a company," he told reporters. "This is about the public's access to information in the public interest with respect to how public dollars are being spent to provide nursing home care to seniors who need it."

Government lawyer Allan Morgan made mostly the same arguments as Shannex, saying the section of the information law on trade secrets meant "the government has no choice but to withhold disclosure. The department has no discretion to release this information."

Morgan pointed to a ruling that Clendening made on a right-to-information case filed by Coon in 2014 that tried to get details of a contract the province had awarded to a shale-gas consultant.

In that case, Clendening ordered the contract released but agreedthe consultant's per diem should be blacked out for competitive reasons a similar scenario to what Shannex and the province are arguing for now, he said.

Shannex operates two nursing homes in Fredericton and one each in Moncton, Riverview, Saint John, and Quispamsis.

Last fall it was chosen to build a new nursing home in Miramichi.

With Shannex bidding on two other homes now and planning to do the same for 10 more, Coon said public access to the numbers will become even more important though he said the company's future growth may hinge on the provincial election results this fall.