Social services spent $11.2M on hotel procurement since 2018: Minister

Social services spent .2M on hotel procurement since 2018: Minister

Opposition critic Meara Conway says the data provided shows “a clear and consistent trend upwards” on hotel usage by social services since 2018.

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New data shared by the Ministry of Social Services in response to political pressure from the Saskatchewan NDP shows that a total $11.2 million was spent on emergency hotel rooms in the last five years.

Opposition critic for human rights and democracy Meara Conway had given Minister Gene Makowsky until Feb. 10 to deliver promised information on his office’s hotel use as emergency shelter, after a client came forward in October with receipts showing room rates increased after social services began covering her stay at a Regina motel.

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A letter signed by deputy minister Kimberly Kratzig was published Friday morning in response, providing requested data on spending and hotels usage. Conway said both freedom of information requests Opposition had submitted on the topic were also returned Friday.

In the letter, the ministry says the review has prompted “updating” its “procedures” on booking hotels for clients, with a focus on still addressing “cost effectiveness, safety and availability.”

Social services staff will now seek cost quotes from at least three hotels before securing a room in one of the larger cities, selecting the lowest cost hotel that meets individual needs and safety considerations.

A one-year pilot will also be implemented, in which the ministry procures a block of five rooms from a hotel in Saskatoon and Regina at a set rate, including a damage deposit.

“We want to experiment, see if this will give us lower prices,” Makowsky said Friday.

Responding to the letter, Conway said the information provided discredits Makowsky’s claims this fall in which he “misled the public on a few key points, in the wake of the Sunrise Motel scandal.”

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Total expenditures on hotels and related spending since 2018 is $11.2 million, increasing annually from $1.16 million in 2018 to $3 million in 2022. Sunrise Motel, owned by Saskatchewan Party MLA Gary Grewal, received $382,642 of that sum, citing an increase from $282 in 2018, to $12,931 in 2020 and $220,474 in 2022.

Previously, Makowsky said this fall social services spent $2.2 million overall on hotels in 2022, $172,000 of which was paid to Sunrise Motel.

Conway said Makowsky also previously claimed reliance on hotels was not on the rise, but “these numbers show that is false. There is a clear and consistent trend upwards.”

As for Sunrise Motel’s billing history Conway asked “why did reliance on Sunrise Motel jump when Gary Grewal was elected to government in 2020?”

Meara Conway, Opposition critic for ethics and democracy
Meara Conway, Opposition critic for ethics and democracy stands outside the Sunrise Motel, owned by Sask. Party MLA Gary Grewal, on Jan. 25, 2024. Photo by KAYLE NEIS /Regina Leader-Post

Makowsky said the rising costs could be attributed to “inflation” or changes in what hotels are being used, and that there has been a slight decrease in hotel needs from income assistance clients, but an increase from Child and Family Services clients.

He also said the prevalence of Sunrise Motel on social services’ books is due to “willingness” and availability to take clients. According to the ministry’s data, Sunrise Motel received the most business from social services of all hotels used in Regina.

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“We don’t get to pick which hotels are willing to work with us. That just happens to be one of them,” he said. “The RFP, with the damage deposits, hopefully will be able to maybe attract a few more into the mix.”

Asked about the inclusion of damage deposits in the pilot, after saying previously not paying these could cause inflated room rates, Makowsy said “we don’t know the exact number of stays each night where there would be damage into the past, but anecdotally, we know it does happen.”

Conway called it suspect that in the sections cited in the ministry’s letter, from the Child Protection Services manual, Saskatchewan Income Support and Saskatchewan Assured Income for Disability policies, none mention a rule about social services not paying damage deposits.

“That was government’s, the minister of social services’, justification in the wake of us breaking this scandal,” said Conway. “And poof, that concept has disappeared.”

“This only further exacerbates our fears around the suggestion, on its face, that government MLAs are profiteering from their membership and government, possibly, from failed housing policies.”

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Conway said she intends to continue pushing for details on Sunrise Motel, and for reformations to the province’s income assistance programs.

“Hotels are not the answer. They’re expensive, they’re reactive, they will not get any of the root causes of these issues,” she said. “We need an overhaul, on how the Ministry of Social Services is housing people on an emergency basis.”

The provincial auditor is also investigating the ministry’s hotel procurement policies, with results to be released in December.

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