Nova Scotia government officials defend use of sole-source contracts

CITYnews halifax / By Keith Doucette, The Canadian Press

Senior Nova Scotia government officials defended on Wednesday the practice of tendering public contracts without a competitive bidding process.

In an appearance before a legislature committee, Joanne Munro, Service Nova Scotia deputy minister, said alternative procurement is a “legitimate and necessary” tool used by governments across Canada to obtain goods and services.

Alternative procurement methods, such as sole-source contracts, allow governments to respond quickly in urgent and specialized circumstances, Munro told the public accounts committee. She said the government procured $1.8 billion in goods and services in the last fiscal year, with $273 million — or just over 15 per cent — obtained through a non-competitive process.

“We are proud of the work being done and are confident in the systems and oversight we have in place,” Munro said.

A report released in February by Auditor General Kim Adair says that while legitimate, alternative procurement can increase the government’s reliance on a single vendor and reduce public transparency.

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“Strong controls are required to mitigate these risks,” the report said.

Karen Oldfield, interim CEO of Nova Scotia Health, said that while public tendering is the most common way the health authority conducts business, there are times when “flexibility is necessary.”

Alternative procurement methods are used for about 10 to 12 per cent of the authority’s 3,000 contracts, Oldfield told the committee.

“That flexibility has allowed us to meet critical timelines for health-care equipment, to respond quickly during emergencies and to build on existing vendor relationships, where switching (vendors) would introduce unnecessary costs, complications or service interruptions,” she said.

Still, Oldfield said that some sole-source contracts such as the one with Maple, a company that provides virtual care for patients, will go to public tender once the contract expires.

“It is case by case,” she told reporters after her committee testimony. “When that contract was entered into, Maple was kind of the best game in town. Now there are many competitors.”

Meanwhile, Munro told the committee that all contracts, including those sourced through alternative procurement, are subject to a “Canada first” lens given the trade war with the United States.

She said that since March every request for proposals comes with the caveat that the province reserves the right to exclude bids from jurisdictions where trade barriers such as tariffs have been imposed. Munro said that Service Nova Scotia had stopped one request for proposals in order to look for a Canadian alternative.

The deputy later confirmed to reporters that the potential contract was with a U.S. software provider. Service Nova Scotia said the contact was worth $250,000 with an annual $50,000 fee.

“We are now in discussions with one (Canadian) proponent and waiting for a proposal,” Munro said.

Rod Wilson, an NDP member of the committee, said he was shocked to hear at one point that a $42-million contract awarded to Google for AI tools for the health system was the result of an unsolicited approach by the company.

“That doesn’t instil confidence that it’s a fair and transparent process,” Wilson said of alternative procurement.

Liberal Iain Rankin, who brought up the Google example while questioning officials, said he’d like to see an independent analysis of why the company was chosen.

“I don’t think there is a consistent way that contracts are brought forward … it seems to me that it’s an ad hoc approach of when alternative procurement is chosen,” said Rankin.

This report by The Canadian Press was first published Sept. 10, 2025.