Good morning everyone.

On Tuesday afternoon, Matt Jones, the Minister of Hospital and Surgical Health Services, one of Alberta’s four health ministers, made a surprise announcement in the legislature:

“Concerns were raised about the procurement practices and procedures and handling of conflict of interests in AHS procurement,” he said, referring to Alberta Health Services.

“I’m pleased to share the procurements for the central and south zone surgical facilities have been cancelled.”

Now, the announcement that a project has been shelved is not always newsworthy. Governments make plans, change them, priorities shift, etc. But cancelling these two projects in particular was something of note.

The two companies with which the government was negotiating are owned in part by Sam Mraiche, the Edmonton businessman at the centre of the province’s procurement controversy.

On Saturday, The Globe and Mail published an investigation detailing many of the connections between Premier Danielle Smith ’s government and Mraiche, whose companies have been awarded health contracts worth more than $600-million since the start of the COVID-19 pandemic.

Globe journalists Carrie Tait, Tom Cardoso, Mark MacKinnon and Stephanie Chambers spent months combing through documents, speaking with dozens of people and filing more than 70 freedom of information requests to piece together a glimpse into Mraiche’s dealings with the Alberta government.

The Edmonton executive has always maintained that he has done nothing wrong. In a letter sent by his company MHCare to the government in April, it said: “The unspectacular truth is that Mr. Mraiche’s interactions with government, those in elected office and senior staff fit entirely within the established parameters of typical government relations for the CEO of a commercial entity.”

And his lawyer said The Globe’s questions to him for our latest story were unrelated to health care procurement and “seem calculated to unfairly cast aspersions” on Mraiche.

The Premier has said she met with the executive socially a few times, but she said they never discussed his business with the government. Sam Blackett, Smith’s spokesperson, said this week that “at no time has Mr. Mraiche ever spoken to the Premier about any of his businesses or business interests.”

Smith’s government has been dealing with questions over procurement since February, when Alberta Health Services’ former chief executive alleged some of the agency’s private surgical contracts contained inflated prices, may have been tainted by conflicts of interest, and that political officials put pressure on her to proceed with the deals. Athana Mentzelopoulos, the former executive, in a wrongful dismissal lawsuit has alleged the government fired her for investigating these deals, some of which involved Mraiche’s companies.

The government has countered, saying Mentzelopoulos was dismissed because she was incompetent and did not push the government’s plan to expand the use of private surgical facilities. None of the allegations have been tested in court.

It was The Globe in February that first reported that Mraiche owned stakes in the two companies negotiating with the health agency to open surgical facilities in Red Deer and Lethbridge. The Globe also reported that the companies had proposed rates exceeding what a Calgary company was paid and what it cost Alberta Health Services to perform the same procedures itself.

In that same April letter, MHCare denied that the Red Deer and Lethbridge projects proposed to overcharge Alberta Health Services.

The Minister’s announcement on Tuesday about the end of negotiations with the two companies provided few details. But in a statement sent to The Globe later that day, Jones said negotiations were terminated on Nov. 28 and the “proponents were informed immediately.” He added there will be a “new competitive procurement process in early 2026 to secure additional surgical capacity.”

The owners of the two proposed facilities, which includes one of Alberta Health Services’ former procurement officials, Blayne Iskiw, said they too were surprised by the announcement.

“Prairie Surgical was surprised to learn of the Minister’s public announcement in the legislature today. It comes without explanation or rationale, either to the public or more importantly to Prairie Surgical,” the statement said.

In a week when the Alberta government said it would resist the federal gun buyback program, banned the resurrection of the Progressive Conservative brand in the province and made it easier for a referendum on separation to go forward, it was the health care procurement controversy that made the most noise.

Who knows what next week will bring.

This is the weekly Alberta newsletter written by Alberta Bureau Chief Mark Iype. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.