VANCOUVER -- The failure to protect B.C. seniors from COVID-19 has renewed calls for oversight in the province's care home industry – particularly in the for-profit facilities receiving public funding.

The provincial government invests $2 billion into long-term care annually, with $1.3 billion going to contracted for-profit and not-for-profit providers, and the BC Seniors Advocate believes officials need to pay more attention to how it's being used.

"I think we need to take a stronger interest and give strong direction on how money is spent,” said Isobel MacKenzie.

Her office published a report in February, shortly before COVID-19 hit, that looks into the spending of public dollars in seniors' homes. It shows 38 per cent of care homes are owned and operated by health authorities while the remaining 62 per cent are run by the private sector.

Each long-term care home has its own contract with health authorities, which will determine the amount each gets from that government funding. It’s a lump sum that’s then paid to the facility.

“The current approach is we give them basically a pot of money and they spend it as they see fit,” said MacKenzie.

Part of what determines the amount of that government investment is an expectation that wages will be paid at a unionized standard. 

“There is a range from about $17 or $18 an hour at the low end for a care aide to $25.30, which is the standard wage rate paid by the health authorities,” said Jennifer Whiteside, secretary business manager for the hospital employees union. The low end wages are seen at the privately run facilities, she explained.

MacKenzie told CTV News the system has created “an incentive out there for a care home operator to pay lower wages because they get to keep whatever is different from what they’re funded to what they’re paying.”

But Daniel Fontaine with the BC Care Providers Association said that funding isn’t just for wages, it has to include roof repairs, sewer drainage, taxes and building maintenance.

“There is no capital funding that comes from the province,” he said. "Whenever care providers have said we have a leaky roof or we have expenditures, what’s happened is they’ve been encouraged to reduce their labour costs to find some funding to be able to pay for those capital costs.”

Fontaine said during this pandemic, care homes are incurring massive expenses on "everything from traditional deep cleaning to the PPE."

"Prices have gone through the roof for things like surgical masks and there’s been no additional funding for care operators," he added.

Research associate Andrew Longhurst works with the Canadian Center for Policy Alternatives, and he suggested what could be happening in this current system is that B.C. is "subsidizing large real estate portfolios of for-profit companies rather than those dollars going into frontline care.”

The report from BC’s Seniors Advocate found that for-profit companies are spending more on building or capital costs. “This hints at some really concerning trends that we’re seeing internationally,” said Longhurst, “where there are fairly complex business arrangements where operators may lease back the real estate, so the actual brick and mortar building, from another company at inflated rates.”

“I’d be the first to say there’s more to do,” said Health Minister Adrian Dix. When CTV News asked him if there needed to be more oversight in how public funds are spent, he said, “there is more oversight, and I think there needs to be other improvements and changes because the people living in long-term care are different than they were.”

He explained that the level of acuity in long-term care “is considerably worse than it was 15 years ago,” and that there’s a lot of investment needed to improve care homes. “Many of the public ones date to the '60s and '70s and they reflect standards of building that have to be improved and that affects the lives of care aides and everyone else.”

BC’s Seniors Advocate suggests more transparence of spending of public dollars is necessary. “We have to remember that the profits are generated by public dollars,” she said, “I would hope that the care industry would have the introspection to realize that while this started out with the best of intentions there have been unintended consequences.”