Ontario Premier Dalton McGuinty stood by the eHealth Ontario board of directors on Tuesday, saying he still has confidence in them despite the contracts and spending scandal.

Though he noted some things are "clearly unacceptable" at the embattled provincial agency, McGuinty said he will not fire the board or Health Minister David Caplan.

Opposition parties have repeatedly called for Caplan to step down over his handling of eHealth, and on Monday turned their eyes to the agency's board of directors, who serve under chairman Dr. Alan Hudson.

McGuinty, in his first comments since the legislature rose for the summer late last week, defended Hudson and praised the work he's done as head of the province's wait times strategy.

"I'm very proud of the work that Dr. Hudson has done and continues to do for us. As you know, he's acting in a volunteer capacity at eHealth," said McGuinty.

"You couldn't get a better, more committed and more accomplished individual, at any pay level, to take on that responsibility."

Sarah Kramer was let go from her post as eHealth's CEO and president on Sunday and received a severance package worth about $317,000.

Kramer came under attack over a $114,000 bonus she received just four months after starting her job, for which she was paid a $380,000 salary.

EHealth approved more than $5.5 million in untendered contracts in the first few months of operation, with some doled out to firms with personal connections to Kramer and Hudson.

The agency was set up in the fall of 2008 to create a comprehensive electronic health record system for the province by 2015.

Ontario lags behind: report

Meanwhile, Ontario's health watchdog says it hopes the eHealth scandal doesn't slow momentum on developing an electronic health-record system.

In an annual report released Tuesday by the Ontario Health Quality Council, the agency said it is concerned that "wasted time may undermine trust in the healthcare system" and blasted the provincial government for its lack of progress in setting up an electronic health records system in Ontario.

The council's CEO, Dr. Ben Chan, said that 2007 statistics show that 25 per cent of family physicians in Ontario have electronic records, compared with 50 per cent in Alberta, 89 per cent in the United Kingdom and 98 per cent in the Netherlands.

"Computerized records can remind caregivers and people with chronic diseases when it's time for tests, drug adjustments and other regular care, and it can track results, and send alerts when there is a problem," said Chan.

Worries abound that with the departure of Kramer and the continuing controversy over the agency's spending, eHealth won't reach its 2015 target.

Lynn McLeod, chair of the Health Quality Council, said patients will suffer if the rollout is delayed.

"This is one of the biggest roadblocks to an efficient health system that delivers high-quality care," said McLeod.

A third-party consulting firm, PricewaterhouseCoopers, is reviewing the agency's books, under the management of an internal government auditor. Ontario's auditor general is also assessing the agency.