Workers leave emergency care in Nova Scotia’s most vulnerable areas after CRA audit

A private company that has received more than $184 million in public funds over the past eight years to care for some of Nova Scotia’s most vulnerable children and adults with disabilities is losing staff so quickly, remaining employees say it’s a major safety issue for everyone.

Arden Professional Client Care announced details of the Canada Revenue Agency audit in an all-staff email on March 16 – that the company was not releasing tax documents or reporting payments made to workers to the CRA.

Multiple sources told CBC News that several employees have quit.

Arden employees are independent contractors who provide care to a disabled adult or child living in government care. The province uses companies like Arden as a last resort, when it’s not possible to place a person in a group home. The company provides 24/7 care to clients in homes across Nova Scotia.

A source who works for Arden said, “They are extremely vulnerable people. In terms of care, as far as I understand it, this is the end of the road.”

“These people have extreme schizophrenia, extreme autism – non-verbal autism – in which it is extremely challenging to try and communicate and understand the client.”

CBC has agreed not to name the contractors because they are still working for the company and fear retribution.

The company disagreed with the CRA’s position.

Until the recent announcement, there was a widespread belief among independent contractors that they were exempt from paying taxes on income earned in Arden, according to a petition of workers with hundreds of signatures.

In an internal email, Arden management told contractors it disagreed with the CRA’s position.

Matt Suter, executive director of Arden, quoted on March 16 Article 81(1)(H.1) Income Tax Act, which discusses social assistance payments for “informal care programs,” in an email to all contractors.

Suter said the CRA “has made clear through recent interpretation and related case law that services structured like ours do not qualify under this exemption, and therefore payments must be reported.”

The company told CBC in a statement that it is complying with the agency’s instructions. It said it is working with the province to ensure “there are no changes to customer care and safety,” and thanked its contractors for their “continued dedication.”

Some contractors are worried they’ll be hit with a huge tax bill.

One contractor said, “I was shocked and very confused by the email and I worry what it will mean for other contractors, customers and me.”

contractors are leaving

Arden declined an interview, but provided a statement when asked for clarity on what contractors were told about taxes before the audit.

“Arden does not provide personal income tax advice to its contractors,” the statement said. “The company’s independent contractor agreements have always stated that contractors are responsible for their own tax decisions and remittances.”

The statement said that CRA has instructed Arden to issue tax documents to contractors starting from the year 2025. The statement said the CRA is also looking at Arden’s filings for 2023 and 2024, but the company expects the change to only apply to 2025 and future years.

CBC has obtained emails that show at least three workers walked off the job shortly after management informed contractors about the CRA audit.

He realized that the tax implications meant he could not continue working for the company.

Contractors earn $19.50 an hour, but that was increased to $20.50 an hour when Arden announced the audit.

staffing result

CBC has spoken to multiple sources who confirm that more employees are quitting in the days after the first email.

“I personally know a few coworkers who have decided not to continue working. I could easily say there are a dozen,” said a second contractor, whose identity CBC is also protecting.

Another contractor told CBC that “fantastic” gaps were opening up in the schedule. The first source said the few remaining contractors have been scheduled to work up to 66 hours straight to care for customers.

“Many of these clients are used to having the same small, cohesive teams around them every day and every night,” the first contractor said, adding that staff can accompany clients to doctors’ visits or pick them up from school, creating a “consistency” in clients’ lives.

Sources say that although the Department of Opportunity and Social Development requires a staffing ratio of two workers to one client, some Arden homes are now being staffed by only one contractor at a time.

He says it’s a safety issue for everyone because some customers can be violent. Another contractor described working alone as “extremely dangerous.”

CBC asked Arden by email about his plan to care for clients with falling staffing levels, including concerns about contractors working alone.

In a written response, Arden said he would continue to work with the department.To ensure there is no change in customer care and safety which are top priorities for Arden.

The company did not give further information.

Arden paid $184 million since 2018

of nova scotia public accounting reporting It turns out that since 2018, Arden Professional Client Care and its sister company Arden Independent Living have together accepted a total of $184,179,648 from the Department of Opportunity and Social Development.

The department declined an interview.

In a statement, the department said that as of March 30 it had placed 12 children and 44 adults with disabilities in Arden’s care. The department previously told CBC on March 18 that it was using a total of 23 temporary emergency arrangements to care for children.

The department confirmed there are four other temporary emergency arrangement providers in Nova Scotia who care for children.

It reported that Arden’s “master agreement” with the department had expired, but the company continued to operate under the same terms.

The department said that after it became aware that Arden was treating its employees like contractors, officials told the company in March that it would have to file T4As, and comply with “all applicable laws and regulations.”

Concerns highlighted in 2024

Two years ago, a report by the Auditor General warned that the province’s weak oversight of this type of care system could threaten the safety of vulnerable people in care.

Auditor General Kim Adair’s 2024 report examined “temporary emergency arrangements”, or TEAs, Which is the name given to the placement of children placed in government care with companies like Arden.

In an interview with CBC this week, Adair detailed the potential risks in 2024.

“The responsibility lies with the minister to ensure that the checks and balances and social worker support (are) there to ensure that these children are well looked after,” he said.

According to Adair’s findings, Arden provided approximately 83 per cent of the TEAs contracted by the province between 2021 and 2023. Three other companies made the remaining contracts.

Normally the Auditor General follows-up for two years after an audit, but because of the sensitivity of the children involved, Adair decided to follow-up at six months, this week and again next spring.

“We wanted to send a signal to the department and the minister that this is a serious matter,” he said. “And you have to make sure these kids are taken care of.”

according to 2025 policy documentArrangements with companies like Arden should not last more than seven days unless it is an exceptional circumstance. However, the Auditor General’s report found that, on average, the length of stay in a TEA was eight months.

Contractors fear financial ruin

Although Arden contractors are concerned about customers, sources say they are also concerned about their own financial future.

“They may be worried about how they’re going to keep a roof over their heads, how they’re going to pay their vehicle payments,” the first contractor said.

Another contractor said he knew people who work full-time for Arden and have families who would be affected in “quite painful” ways.

The CRA audit may not be Arden’s last audit. According to the Auditor General’s findings, a contract was signed between TEA providers and the Department of Opportunity and Social Development in October 2023.

That contract gives the province the power to audit content providers like Arden for up to seven years after the last payment of public money.