Cost of NWT air ambulance contract goes from $150M to $425M

The NWT’s health minister is under pressure to justify why the territory’s air ambulance contract is more than doubling in price – an increase expected to cost the territory at least an extra $13 million per year.

In June 2014, the GNWT awarded a 10-year air ambulance contract valued at $150 million to Air Tindi and Advanced Medical Solutions.

Last year, a new 10-year contract was awarded to a partnership featuring the same two companies – and others – for $424.8 million.

That represents a 183-percent increase. According to the Bank of Canada, inflation over the same period was 32.5 percent.

Air ambulance contracts are complex. The initial value agreed at the start is unlikely to be what is paid at the end. For example, the 2015-25 contract actually ended up costing $205 million, and the GNWT says the latest contract figure “does not account for annual inflationary adjustments tied to CPI, actual fuel prices, and fluctuations in volume of service.”

Meanwhile, a network of governments, insurers and patients ends up covering the overall cost, so the GNWT is not shouldering the entirety of this increase.

Based on initial contract values, the full increase would be about $27 million a year. Instead, the GNWT expects its share to be an extra $13.3 million in 2026-27 according to its draft budget.

The new contract “accurately reflects the current pricing environment in the air ambulance industry,” the NWT’s health authority told Cabin Radio in a statement.

Some regular MLAs expressed shock at the numbers.

In the legislature this week, several requested more information as they went line by line through the Department of Health and Social Services’ proposed budget for 2026-27.

“I don’t think we’re getting a clear understanding of why it’s increased that much,” said Great Slave MLA Kate Reid. She asked for a written substantiation from health minister Lesa Semmler to explain the increase.

“This is a massive price hike that goes far beyond simply inflation,” Yellowknife North MLA Shauna Morgan told Cabin Radio.

“I understand in the NWT we are often at the mercy of particular companies for necessary services since there is little competition,” Morgan said.

“We must find more effective ways to put boundaries around what the GNWT is willing to pay.”

Air Tindi: old contract ‘not sustainable’

One of Morgan’s main concerns is that according to the GNWT’s reporting, the cost and frequency of air ambulance flights had been going down slightly over the past few years.

“I’m having trouble understanding why this budget significantly more than doubles, all of a sudden, the cost of air ambulance in a given year,” she told Semmler.

“Are you saying that this year we’re going to be paying more than twice the same amount for the same service as we got last year?”

The GNWT’s response is that it had been getting a surprisingly good deal up until now – and the new contract comes with a better standard of service.

“The contracts allow for annual inflation adjustments tied to the consumer price index, but inflation related to aviation and specialized health care services has not tracked well against CPI over the last 10 years,” the NWT’s health authority told Cabin Radio by email.

In other words, inflation as most people understand it – how the consumer price index changes, measured using things like groceries – became detached from inflation in the pricing worlds of aviation and healthcare.

In the latter years of the last contract, the GNWT thinks it was getting a deal because while aviation and specialist health costs had soared, the contract locked Air Tindi and Advanced Medical Solutions into smaller CPI-based annual increases.

Air Tindi agrees with this assessment.

“To speak for Air Tindi, the last contract was awarded 12 years ago and was not financially sustainable for the previous three years,” the airline’s president, Chris Reynolds, told Cabin Radio by email this week.

“If you consider what was going on 2014, we did not contemplate the havoc the Covid-19 pandemic would inflict on the aviation and medical industry as well as the NWT economy.”

‘We were expecting this’

The problem with getting a deal in the final years of a 10-year contract is that the prices are likely to catch up with you when you renew.

Senior GNWT officials admitted as much when MLAs started asking questions this week.

“We were very much expecting this new contract to come back significantly higher,” said Jeannie Mathison, an assistant deputy minister at the Department of Finance.

But the GNWT also argues that the new contract provides residents with better service in a couple of key areas.

Firstly, said Mathison, the contract previously only allowed for one aircraft that could transport bariatric patients (in general terms, individuals with severe obesity). The new contract “has more than one aircraft that can do that,” she said, and that has a knock-on effect on aircraft availability.

“We don’t have to keep one aircraft just in case we get a bariatric patient,” said Mathison. “So that was a significant increase because it was less down time for the flight – the ambulance overall, the aircraft overall.”

There are now three critical care teams working 12-hour shifts daily instead of two, she continued, again helping to limit aircraft down time.

“The new contract allows for more coverage for flight crew, medical staff, and larger, faster aircraft with more range,” Air Tindi boss Reynolds added by email.

“I can tell you, from my own perspective, that it was a competitive bid process against companies from Manitoba and Alberta,” he wrote, “and the award is of considerable significance to ACCESS Air Ambulance – a partnership of Tłı̨chǫ Investment Corporation, Det’on Cho Corporation, Aklak Air, Advanced Medical Solutions, and Air Tindi.”

Sale to Ottawa conglomerate

All of the companies on that list are names associated with the North. Morgan, though, had questions about Advanced Medical Solutions.

On May 7, 2025, the NWT government said it had awarded the new air ambulance contract to a partnership that included Advanced Medical Solutions, a company founded by Sean Ivens in Yellowknife in 1995.

One week later, Advanced Medical Solutions announced it was being bought by Calian, an Ottawa-based conglomerate with thousands of staff. (Air Tindi is owned by Clairvest, a Toronto-based private equity firm.)

In the legislature, Morgan asked health minister Semmler what kinds of commitment these companies had made to the NWT’s economy and labour force.

Semmler, quoting from the Business Incentive Policy that gives procurement preference to NWT firms, said companies “must show meaningful – not token – use of northern capacity,” but she did not provide specifics.

Pressed by Morgan to set out what would happen if a contractor did not live up to that commitment, Semmler said she was unsure.

Lastly, Morgan asked: “Can the minister commit to providing a detailed justification for why taxpayers are suddenly paying three times the amount for this contract?”

“I don’t have all the details. What I do have is that, from what was mentioned, we had in the old contract fixed cost that cushioned the price, inflation and the volume in the numbers,” the minister responded.

“The new contract had to address the new volumes, inflation, only the contract was based on volumes from 10 years ago. So this new contract includes new planes that travel faster, can travel longer distance, less down time for planes and staffing based on staffing configurations.”

The NWT’s health authority said the new contract “addresses some of the changes to the air ambulance industry over the last decade and aims to address shortcomings from our previous contract to improve the responsiveness and efficiency of the program.”

“What we observed in the previous contract was that the number of dedicated and contingency aircraft matched well with our needs,” the authority continued, “but the number of available medical personnel, pilots and medical equipment greatly impacts our ability to make efficient use of the aircraft and, therefore, the new contract increases the staffing and medical equipment available.”

The changes made “will reduce the response time for many patient transports,” the authority concluded, “which is good for patient care and for the healthcare system.”