AMA suing Tyler Shandro for over $255M

The Alberta Medical Association announced today that they’re suing Tyler Shandro, the Alberta Minister of Health, for over $255 million.

In a statement on the AMA website, Christine Molnar, AMA president, said:

If you told me a year ago that I would serve the Minister of Health with a Statement of Claim for a constitutional challenge, in the midst of the worst public health crisis in a century, I would have been incredulous. Yet, that is what happened this morning.

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This court challenge comes after months of the AMA attempting to negotiate a new contract with Albert Health. Since 1986, the AMA has been the exclusive representatives of physicians in the province in negotiations with the minister of health, a position that was written into law on 11 December 2018, with the passing of Bill 24, “An Act to Recognize AMA Representation Rights”.

The AMA’s most recent agreement with the province was set to expire 31 March 2018, but was extended in 2018, with a new expiration of 31 March 2020.

Negotiation timeline

Here’s a timeline of the negotiation process.

September 2019

On 3 September 2019, Shandro notified AMA of an intent to negotiate a new contract. The AMA responded on 25 September to the deputy minister, confirming their agreement to begin discussions.

October 2019

Prior to negotiation, Shandro introduced Bill 21, the “Ensuring Fiscal Sustainability Act, 2019” for first reading on 28 October 2019.

This bill addressed issues related to physician resource panning, but it also proposed changes to the Alberta Health Care Insurance Act, including the ability of the minister to terminate any agreement with the AMA. Any such terminations would apply to any related dispute resolution process and would void all rights, privileges, obligations, and interests that had arisen from that agreement.

November 2019

Actual negotiations began on 13 November and continued into 2020. Here are some of the positions Alberta Health took during these negotiations:

• Proposed removing items from the AMA agreement without justification, including dispute resolution mechanisms
• Artificially limited the scope of items that were subject to negotiations
• Claimed that proposed changes to certain matters related to physician compensation were not actually compensation-related and thus would not be negotiated
• Served notice that physician support programs (the Rural, Remote Northern Program and the Business Cost Program) would be eliminated as of 1 April 2021, without discussion
• Argued that they had a mandate to maintain a certain fixed cost for the provision of physician services
• Insisted that any cost increases resulting from the following must be absorbed within that fixed cost:
  • Inflation
  • Extraordinary medical events (such as the COVID-19 pandemic)
  • Increased demand for medical services (such as population growth)

The AMA responded by maintaining that all items put forward by either the AMA or Alberta Health were negotiable, and in that vein provided responses to the above proposals.

December 2019

Bill 21 received royal assent on 5 December, while negotiations were still underway. The bill granted power to the minister to terminate agreements right as the AMA and Alberta Health were negotiating an agreement.

January 2020

On 23 January 2020, after negotiations failed to establish an agreement—even after AMA extended the negotiation period—both parties agreed to seek mediation, which began on 31 January. This pushed the negotiation expiry date to 29 February from 11 February.

February 2020

Alberta Health notified AMA on 14 February that they would no longer bring forward proposals, effectively ending 3 weeks of mediation.

Just 6 days later, Shandro terminated the AMA agreement (using the authority granted to him through the passing of Bill 21) effective 1 April 2020. He never communicated that termination to the AMA; they discovered it through reading it in news coverage the following day.

Under the now-terminated agreement, the AMA would’ve been entitled to seek arbitration, effective 29 February, just 9 days after Shandro cancelled the contract. And that’s after the AMA had moved the date to file for arbitration from its original date of 11 February.

The constitutional challenge

The AMA is suing the minster of health because it believes the government has infringed on rights granted to their members by the Canadian Charter of Rights and Freedoms, specifically Section 2(d): freedom of association.

The AMA’s statement of claim, filed through Patrick Nugent of Nugent Law Office, interprets Section 2(d) as guaranteeing:

the right of individuals to act in common to counteract the power of governments and employers, and to enable individuals to achieve shared goals related to workplace issues and conditions.

They go on to say that this freedom includes 3 rights:

1. To organize
2. To engage in meaningful processes of good faith collective bargaining in an attempt to achieve workplace-related goals
3. To seek to negotiate important terms and conditions of work into a collective agreement

The AMA claim that Shandro breached their freedom of association through at least 9 ways:

1. Enacting Bill 21, regarding its addition of s 40.2 to the AHCIA (the section that allows the minister to terminate agreements)
2. Unilaterally terminating the AMA Agreement
3. Removing the ability of AMA to access an independent third party dispute resolution process (after all, they’re not allowed to strike)
4. Overriding freely negotiated provisions in the AMA Agreement, as amended
5. Unilaterally implementing new terms and conditions of physician’s work
6. Failing to consult with AMA in good faith about the above items
7. Acting in bad faith by
   • Entering negotiations with no intention to meaningfully negotiate
   • Passing Bill 21 during negotiations
   • Unjustifiably restricting the scope of negotiations
8. Creating an environment where meaningful collective bargaining in good faith is not possible
9. Undermining the AMA’s ability to perform its functions as the bargaining representative of Alberta physicians

The AMA claims that these violations of Charter freedoms also breach Section 1(e) of the Alberta Bill of Rights.

What AMA wants

The statement of claim lists 11 remedies that the AMA seeks from the health minister:

1. A declaration that s. 40.2 of the AHCIA violates the Charter
2. A declaration that the minister’s terminating the agreement violates the Charter
3. A declaration that these 2 remedies also breach Alberta Bill of Rights
4. A declaration that Alberta Health’s conduct throughout negotiations interfered with the freedom of association of the AMA and its member, violating the Charter
5. A declaration that Alberta Health has a duty to engage in a process of meaningful, good faith negotiation with the AMA
6. That Shandro amend the AHCIA to include a provision requiring access to an independent third party dispute resolution process
7. A declaration that the AMA agreement remains in full force and effect and that the AMA is entitled to avail itself of all relief, including the exercise of dispute resolution processes
8. Damages under section 24(1) of the Charter for $5 million
9. Damages for breach of the Charter, breach of contract and unjust enrichment for $250 million
10. Interest pursuant to the Judgment Interest Act
11. Legal costs

Shandro has 20 days to respond.

The AMA fully expects the government to “mount a rigorous defense”. The AMA has been told through consultations with 3 independent legal firms that it has “a very good case”, considering that this is the only time a government in Canada has unilaterally cancelled a valid contract with physicians.

The AMA expects hearings to occurs within the next year or two.