Doug Ford scolds long-term care operators as shares continue to dive

Doug Ford scolds long-term care operators as shares continue to dive
Shares of Canadian nursing-home operators dropped again Thursday as the Ontario government raises the pressure on the sector to change its ways after COVID-19 outbreaks.

Ontario Premier Doug Ford resumed his criticism of long-term care homes, threatening to pull licenses of several facilities that are under review by the province, while urging investors to ask hard questions.

“I would expect, as a shareholder, to start holding the CEO and chair accountable,” Ford said at a news conference in Toronto. “Because guess what? We’re going to hold them accountable.”

Ford’s government said this week it’s taking over temporary management of five eldercare homes in the wake of COVID-19 outbreaks. Two them are run by Markham, Ontario-based Sienna Senior Living Inc., which fell another 6.8 per cent Thursday and has lost almost 10 per cent this week.

Extendicare Inc. retreated about one per cent. Chartwell Retirement Residences, which says it is Canada’s largest owner and operator of seniors residences, fell 3.2 per cent.

“Canada’s LTC homes have been at the epicentre of the COVID-19 outbreak, particularly the older C Class homes in Ontario,” Jonathan Kelcher, an analyst at TD Securities, said in a note to clients early Thursday.

Inspectors are on site today at five care homes hit hardest by the virus, Merrilee Fullerton, the province’s minister of long-term care, said Thursday.

Tougher rules

At least one shareholder of Sienna isn’t shying away from holding the stock and says the crisis could drive mergers in the sector.

“You’re likely going to get a more consolidated group of players” that can work more closely with government and handle increased compliance standards, Dean Orrico, chief investment officer at Middlefield Group Inc., said on BNN Bloomberg Television. Care homes will have stronger measures in place to manage outbreaks in the future, he said.

Ford vowed this week to hold an independent inquiry into the province’s long-term care system after a Canadian military report outlined poor treatment of residents. He didn’t rule out taking over operation of the system.

His government has also come under fire itself by the main opposition parties for not moving swiftly enough to contain the outbreaks. Ford has said he would appear as a witness himself at any inquiry.

The military report said that at Sienna’s Altamont facility in Toronto, for example, most residents were not receiving three meals a day. Some residents had been bound to their beds for weeks and hadn’t been washed properly.

“With respect to bringing the system entirely under the province, we are skeptical that the Ford government will go down that path long term,” Tal Woolley, an analyst at National Bank Financial, said in a note Wednesday. “Neither left-leaning nor right-leaning governments in the past have shown much interest in taking deeper ownership of the system since it is both capital and cost-intensive.”

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Sienna owns and operates 43 long-term care residences across Canada, along with 27 retirement and 13 managed residences, according to the company’s latest presentation. About 56 per cent of its portfolio is government-funded and the rest privately paid.

Sienna’s stock has slumped 46 per cent this year, erasing $557 million in market value. This week alone it has lost $71 million. The company didn’t respond to request for comment.
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