During the first wave of the COVID-19 pandemic, Dalhousie University signed a $100 million contract with the province of Nova Scotia to administer pandemic relief. But the program ended up costing less than anticipated and the province won’t be getting the money back, according to a Nov. 23 report from Nova Scotia’s auditor general.
“$100 million given to Dalhousie University meant the province gave up control over how the money was spent without knowing how much was needed,” auditor general Kim Adir said in their report.
The funds will now go towards public health research at Research Nova Scotia, meaning the funds will never return to the province. However, the clause specifying Research Nova Scotia receives the money was not added until September 2020 when the audit was underway; previously, there was “uncertainty” regarding where excess funds would go, per the report.
A large part of Dalhousie’s surplus relates to loan guarantees. $35 million of the $100 million was used to create the Tourism Sector Financing Assistance Program, which provided loan guarantees for large tourism operators. This means Dalhousie will pay the debt obligation if a tourism operator defaults on their loan.
This program ends in 2027 or when an operator defaults on their loan. If the program had been run by a government department, the $35 million would have remained with the province until some of it was needed to pay off a loan. If none of that money was needed to pay off a loan by 2027, it could have been used in another part of the government. But with Dalhousie in charge, the university expensed the $35 million and is retaining it as security for those loans, meaning the government has spent $35 million on this program.
By having Dalhousie run this program, the province “locked-in” the price of the program prior to knowing how much it would actually cost, according to the report.
The report also raises concerns about the contract between Dalhousie and the province being informal. The agreement is missing several basic terms normally found in standard government services contracts. There was no confidentiality clause, conflict of interest clause or option to terminate the agreement earlier than the set date of March 31, 2027, the report said.
Despite these concerns, the report said the programs themselves were well run, with only minor issues found.