EDMONTON – One of Alberta Premier Danielle Smith’s cabinet ministers quit his post Tuesday, citing concerns over how procurement contracts are being signed across government.
It came on the first day of the spring sitting of the legislature, as Smith and her United Conservative Party government grapple with an ongoing scandal surrounding allegations of high-level arm-twisting and favouritism in multimillion-dollar health contracts.
Peter Guthrie, in his letter resigning from the infrastructure portfolio, said he pushed for months for better guardrails, including a financial oversight committee to review major government contracts.
“Unfortunately, the majority of cabinet does not appear to share my concerns,” he said.
Guthrie said he intends to stay in the governing UCP caucus as a backbencher “where I can continue to voice my concerns and hold cabinet accountable with honesty and integrity.”
“It is essential that the public has confidence in its government and its processes,” he said.
“We were elected to be open, transparent, fiscally responsible and – above all – honest with Albertans.”
Guthrie, the member for Airdrie-Cochrane, made headlines earlier this month when he wrote to cabinet colleagues, urging Health Minister Adriana LaGrange to step down from her post while the corruption allegations are investigated.
LaGrange remains in the job with the support of the premier and a number of other cabinet ministers.
Two investigations are underway: one by the auditor general and a second by the government.
Smith said in a statement she accepted Guthrie’s resignation and agrees the allegations surrounding certain contracts signed by Alberta Health Services are serious enough to merit investigation.
Smith repeated that she has “directed our senior civil service to retain a highly credible third party with a strong legal background capable of investigating this matter independently of government, so we can understand exactly what occurred.”
She added, “I want to reiterate that I was not involved in these procurement decisions nor am I aware of any wrongdoing with regards to the issues raised by the former CEO (of AHS).
“My actions were straightforward: the government made a policy decision to expand surgical facilities to tackle the critical issue of wait times, and we all trusted that that direction would be acted upon and implemented by AHS.”
Several cabinet ministers who spoke to reporters at the legislature said they stand by the premier’s statement and disagree with Guthrie’s concerns.
“A guy quit,” said Municipal Affairs Minister Ric McIver. “It’s just an ordinary day. People quit their jobs every day.”
The allegations of corruption stem from a lawsuit filed by the former head of AHS, Athana Mentzelopoulos. They have not been tested in court.
Mentzelopoulos claims government officials as high up as the premier’s office pressured her to sign off on overpriced contracts for private surgical companies.
The lawsuit says her concerns led her to initiate an internal investigation and a forensic audit of procurement practices at AHS last fall, but she was fired Jan. 8 before the audit was completed.
Guthrie was not in the house for question period, but the scandal dominated discussions.
Opposition NDP house leader Christina Gray demanded to know who knew what and when. Smith repeated that contracting and procurement falls “deep within” AHS.
“If something has gone wrong within AHS, within their own procurement processes, we absolutely want to get to the bottom of it,” said Smith. The premier said AHS needed a CEO who fully supported restructuring it into a hospital service provider.
“This is all a circus,” said Gray. “Will the premier call a public inquiry?”
“I am happy to be fully transparent about the cost,” Smith responded. She cited hip surgery fees at private facilities and said AHS is the highest cost provider.
“That’s what we’ve got to investigate,” said Smith.
NDP deputy leader Rakhi Pancholi accused the government of interfering with AHS “to secure the money for their friends.”
LaGrange repeated that allegations in the lawsuit are false and that the government would soon be filing a statement of defence and “vigorously” defending against the claim.
At a news conference Monday, Smith did not commit to ordering all government departments to identify potential ties to firms and individuals named in the lawsuit as part of the government review.
“What we’re looking for is any flaws in the procurement,” said Smith. “We’re not doing a witch hunt to try to find every single transaction that every single business has done if there is no reason to look into it.”
The NDP has labelled the scandal “CorruptCare” and earlier Tuesday renewed a call for Smith to fire LaGrange and order a judge-led public inquiry.
NDP Leader Naheed Nenshi pointed to allegations in the lawsuit that staff in the premier’s office pressured Mentzelopoulos to fire purported critics of the government from AHS.
“It seems Danielle Smith loves the witch hunt, except when she might be the witch,” Nenshi said.
“We lost a minister today, and I will tell you that every single member of that UCP caucus today is asking themselves: ‘Do I want to be the one holding the bag when the music stops? Do I want to be around when the RCMP starts arresting people? Or do I want to stand up for what’s right?’”
As part of the government review, Guthrie notified the auditor general last week of a real estate deal from last summer between his ministry and an individual named in the Mentzelopoulos lawsuit.
That person, Sam Mraiche, owner of MHCare Medical, was awarded a $70-million contract in 2022 to secure children’s pain medication from Turkey. The government received about 30 per cent of the order, and use of the medication was stopped over safety concerns.
A lawyer for MHCare has denied any wrongdoing on the part of the firm in the matter.
Multiple cabinet ministers, including Guthrie, have said they accepted luxury box tickets to Edmonton Oilers playoff games courtesy of Mraiche after his company was awarded the contract.
This report by The Canadian Press was first published Feb. 25, 2025.
