Alberta auditor says failed lab privatization left public with $109 million bill

Alberta’s auditor general says the province’s attempt to shift community lab testing to a private operator resulted in significant financial losses and gaps in government oversight. A new report from Auditor General Doug Wylie estimates taxpayers absorbed roughly $109 million after the privatization effort collapsed.

Wylie’s review found that senior officials in government advanced the plan despite internal warnings that the projected savings were unlikely. He says weaknesses in record keeping, financial analysis and contract oversight contributed to the breakdown of the agreement with DynaLife, the private company tasked with delivering lab services.

The province signed a 15-year contract with DynaLife in 2022, aiming to move all community lab testing outside the public system. But as wait times grew from weeks to months, pressure mounted from patients, health professionals and local leaders across Alberta who raised concerns about access to essential diagnostic services.

By 2023, the government cancelled the contract, purchased DynaLife’s operations and brought community lab testing back under Alberta Precision Laboratories. Wylie notes his investigation was limited in some areas because certain documents requested by his office were not provided.

The findings highlight ongoing questions about the province’s approach to health service delivery and how major privatization decisions are evaluated before public funds are committed.