By John Anderson, Contributor
This opinion piece originally appeared in the Toronto Star on Monday, October 11. To read the original article, click here.
The pandemic has been a great revealer of many previously hidden things. We have learned of the terrible management and conditions in long-term-care and retirement homes that made them easy targets for the COVID-19 virus, and the location of roughly three-quarters of all the pandemic deaths in Canada.
We have learned that for-profit long-term-care homes have the worst records of disease and death, followed by non-profit homes, and the best records are in publicly owned municipal homes.
And, surprisingly, we have learned that the federal government owns 100 per cent of Revera, the second largest long-term-care and retirement home group in Canada. It owns Revera through its 100-per-cent ownership of PSP Investments, the investment fund for the pension plans of the Public Service, the Canadian Armed Forces, the Royal Canadian Mounted Police and the Reserve Force. PSP Investments has some $170 billion in assets. Its private investments, like Revera, earned a profit of 28 per cent last year. This means that you and I ultimately own Revera.
You would think that because Revera is publicly owned it would have one of the better records in LTC. But no. Revera as a for-profit chain has one of the worst records in Canada, with so far over 800 deaths in its LTC and retirement homes. Revera owns homes such as Carlingview in Ottawa with 61 deaths as of August 2020, Maples in Winnipeg with 55 deaths, and Forest Heights in Waterloo with 51 deaths. Why, you might ask, is this the case?
Well, Revera is a for-profit chain where large profits are taken out of the LTC homes and not reinvested in enough well-paid staff or in upgrading buildings. At the start of the pandemic it still had many rooms that held four beds!
I attended the PSP Investments webinar on Sept. 28, 2021, where company president Neil Cunningham did not directly answer questions from attendees, as he was supposed to do, but instead talked on other topics, the first of which was Revera. He said that PSP was sorry for all the deaths, but that it was waiting on public policy to decide what to do about remaining in LTC, but if private equity was needed, they were still ready.
Also, he said PSP wanted to upgrade their old homes, like those that had four beds to a room, but that cost a lot of money, and who was going to pay?
Cunningham also said there was nothing wrong with its investing in Pretium, the American single-family-home rental company that a Star report showed had evicted many racialized residents during the pandemic. According to Cunningham, there had not been a large number of evictions. He said not a word about PSP Investments in private U.S. prisons, from which it divested this year after public pressure.
In the end, we still do not know what the profits at Revera are or whether it pays any taxes at all in Canada, because Revera, being privately held, does not have to publish an annual report!
A recent study by the Australian-based Centre for International Corporate Tax Accountability and Research showed that Revera in the United Kingdom, where it co-owns many LTC homes with its partner Welltower, reported combined losses of $12.6 million (U.S.) while Welltower reported $84.8 million in net income from its partnership with Revera. Is this aggressive tax avoidance by Revera? Until we see the full transparent statement of Revera activities, we will not know the full story.
Revera is PSP Investments’ second most significant global investment. And, in Canada, Revera manages some 22,500 units, making it the second-largest LTC and retirement company in this country. But it is also a global player, managing 24,000 units in the United States and 4,000 units in the United Kingdom.
The newly elected federal government should move on turning Revera over to the provinces as a not-for-profit public company in LTC. The federal government appoints the board of the PSP Investment Fund through the Treasury Board minister. If the federal government wants to make Revera a real public not-for-profit, this is easily doable and the process could start tomorrow.