Ontario's Liberal government came under intense fire Thursday over nearly $5 million in untendered contracts at its newly created health agency, with calls from both opposition parties for the health minister to step down.

ehealth-ont-090527

EHealth Ontario has come under scrutiny for its spending practices. ((CBC))

Speaking during question period at Queen's Park, New Democrat health critic France Gélinas said Health Minister David Caplan is incapable of bringing an electronic health records system to Ontario and called for his resignation, a motion echoed by the Progressive Conservatives.

CBC News reported Wednesday that eHealth Ontario CEO Sarah Kramer approved about $4.8 million in contracts without opening up the deals to outside bidders during the first four months of the agency's operation.

EHealth was set up in late 2008 to create a digital record system by 2015 that allows health-care providers to electronically share patient information.

Kramer said contracts were sole-sourced because of the urgency of the agency's transition as it rose out of a merger between an e-health program at the Ministry of Health and Long-term Care and Smart Systems for Health Agency (SSHA).

Documents obtained by CBC News show Kramer earns a base salary of $380,000 and received a $114,000 bonus in March, about five months after her start date. The next month, Kramer announced in a memo that the company was cutting back on employee bonuses.

Kramer also spent $51,500 on office furniture, hired two consultants who live in Alberta and an executive assistant that cost about $1,700 a day.

Asked whether she got value for some of the questioned expenses, Kramer replied, "I do think I got value for money and the way I know is everything that we wanted to get done got done on time, on budget, and in many cases much better than we hoped could be done."

Facts 'don't sit easy' with government

In the face of sharp criticism from opposition parties in the legislature Thursday, Ontario Premier Dalton McGuinty responded that his government is concerned with details that have emerged and wants to speed up a review underway into eHealth's spending practices.

"There are some facts that have been brought to the fore which do not sit easy with us," he said.

Interim Tory Leader Bob Runciman accused the Liberal government, which set up eHealth Ontario last September, of a sense of entitlement that has spilled over into its agencies.

"This is your appointee, this is your agency. To say that you're concerned is cold comfort, I would think, to taxpayers," Runciman replied to McGuinty in the legislature.

The Progressive Conservatives are calling for Kramer and other eHealth officials to appear before a legislative committee to explain their spending decisions.

Ontario Auditor General Jim McCarter is currently investigating spending at eHealth and its predecessor, SSHA, with plans to unveil his findings in a December annual report.

McGuinty said he welcomes recommendations "sooner rather than later" from the auditor general, while Tories called for a special audit of the agency.

The auditor general's spokesperson said the office is considering calls to make its audit of eHealth a priority.

Workers fired for challenging procurement: sources

New information also surfaced Thursday that nine senior eHealth employees were fired between December and March. Sources told CBC News that some of them had challenged the agency's tendering practices.

Kramer denied the allegations, saying workers were let go because of skill-based reasons and said the agency has encouraged its workers to express any concerns.

kramer-sarah090528

Sarah Kramer, CEO of eHealth Ontario, defended her bonus and her agency's decision not to tender contracts during its transition phase. ((CBC))

"They were certainly not let go because they asked questions. No one's let go because they ask questions," said Kramer.

The eHealth CEO has defended the agency's procurement policy as justified because of the rapid transition process to eHealth from SSHA, an organization that had come under criticism for spending a significant portion of its budget on consultants and for lacking a strategic plan.

"We needed to turn a big ship around very quickly. If you don't turn a big ship around quickly, it'll be 2015 and we'll be floating out to sea," Kramer said.

Procurement regulations require contracts to be open to competition unless they involve legal services, an unforeseeable situation of urgency or the contract involves a patented product made by a single supplier.

Accountant questions logic

Al Rosen, a forensic accountant, questioned Kramer's reason for not putting the contracts out to tender, pointing out it wasn't just a handful of contracts but almost $5 million worth. 

"This is disturbing in the sense that when the governments come in, they say we're going to prevent this type of favouritism with contractors. And in this situation, clearly something's gone wrong," said Rosen.

Health Minister David Caplan said eHealth has since put a new expense policy in place.

Caplan also noted that the agency has been hard at work and has already rolled out two pilot projects for ePrescribing — a system that electronically sends prescriptions to pharmacies instead of handwritten doctor's notes — and has a diabetes registry in the works for 2012, on top of the overall plan for a comprehensive electronic record system for 2015.

He rejected accusations that rules were broken and said eHealth faces "tremendous competition for talent" as U.S. President Barack Obama proceeds with a five-year, $50-billion ehealth strategy.

"I think it is urgent, because we've unfortunately lost a lot of time. Ontario, I say quite candidly, should be much further ahead. We had an agency previously that had the wrong mandate," Caplan told reporters outside the legislature.

Kramer defends bonus, cuts for staff

Among the documents obtained through a freedom of information request were bills for two of eHealth's consultants, who are listed as senior vice-presidents, and commute to Toronto on a regular basis from their homes in Alberta, at a cost of $1.5 million a year for flights, salary, accommodation and per diems.

Another consultant, who charged $300 an hour, billed the agency for reading a New York Times article, reviewing Kramer's holiday voicemail greeting and a debriefing that took place during a chat on the Toronto subway system.

Bills also showed the agency hired an executive assistant for $213 per hour, or about $1,700 a day. Kramer said she performed a "suite of support" for the CEO that extended beyond a standard executive assistant position.

As for her bonus, Kramer said it was doled out only months after taking the eHealth job as part of her negotiated contract. Because Kramer left her previous employer, provincial agency Cancer Care Ontario, with short notice, eHealth was expected to pay her the bonus she'd lost out on at CCO in what she described as a "common practice."

She defended cuts to staff bonuses, saying they reflected a change in management whereby bonuses were solely performance-based, rather than partially reliant on the amount of surplus available at year-end.

If you have information on this story, send an email to yournews@cbc.ca.