N.L. spent nearly entire $22M contingency fund on 'skyrocketing' costs of kids in care
Finance minister says work underway ‘trying to right-size that budget’
Finance Minister Siobhan Coady says there was only one transfer from a $22-million contingency fund set up to cover "unforeseen expenditures" by the Newfoundland and Labrador government in the last fiscal year.
Nearly all of that cash — $21 million of the $22 million available — was transferred to again address a recurring issue that has been repeatedly flagged for nearly a decade.
"The costs of children in care are skyrocketing, and it's under review as to how we improve, from a management perspective," Coady told a legislative committee in mid-April.
"But that's why we had to put some more money in that category this year as well."
Coady was responding to a question from Tory MHA Lin Paddock about contingency fund spending in the just-ended 2024-25 fiscal year.
"I can tell you that Treasury Board is working very closely with children in care. We're trying to right-size that budget," Coady said.
"So we've given them additional money this year. We're trying to work on some improvements to the management of the system so that we're not spending as much money in certain areas. So we're hopeful that they will be able to manage their way through this."
Fund repeatedly tapped to cover care cost overruns
It's not a new problem — and not the first time the province has transferred contingency funding to cover the ballooning costs of children in care.
Tens of millions have flowed over previous fiscal years:
- 2023-24: $15 million was funnelled to the Department of Children, Seniors and Social Development (CSSD) for children in care.
- 2022-23: $5 million was provided to CSSD from the contingency fund for the same purpose.
- 2019-20: $6 million to assist with the cost of specialized care for children in care.
- 2018-19: $12.3 million flowed from the contingency pot to CSSD.
- 2017-18: more than $11 million transferred from the fund.
A spokesperson in Coady's department steered requests for further information to CSSD.
A succession of child welfare ministers has insisted over the years that plans are in the works to address the issue.
The spiralling spending has been attributed to caring for children with the most complex needs, called Level 4.
Their care has been largely outsourced to private providers.
A 2024 CBC News investigation found that the province paid nearly $420 million to fewer than a dozen companies for complex care over the previous six years.
According to data obtained through access to information, annual spending had jumped by about 50 per cent over that time frame.
Coady's comments about contingency transfers came at a legislative hearing poring over budget estimates for the Department of Finance and Treasury Board.
Next week, CSSD will see its numbers go under the microscope.
Documents tabled with the provincial budget show a big jump in spending on overall child and youth services over last year's initial projections.
Last June, the minister in charge of CSSD defended the system for kids in need of complex care.
Paul Pike told CBC News that the care is "very high level" and noted that the services are provided by people with certain educational requirements and experience.
"We are meeting the needs of our most vulnerable," Pike said at the time.
The department didn't make anyone available for an interview this week.
But in a statement last year, CSSD said costs have gone up because of the increase in the number of kids requiring the highest level of care, and also cited inflationary pressures.
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