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The $500 million for Canada Health Infoway is meant to help doctors in small offices convert their files from paper to digital. ((John Raoux/Associated Press))

The agency set up to digitize Canada's health-care system will fall just short of its target to see half of Canadians with electronic health records by the end of 2010, after the government delayed giving $500 million to the agency by one year.

Soon after the government announced the funding in the 2009 federal budget, officials wanted more information from Canada Health Infoway about where the money would be spent. Infoway complied and agreed to an audit that came back with no problems.

Then last September, finance officials emailed Health Canada to say the Prime Minister's Office had decided the money would be held back until 2010.

"This government feels strongly that there are two key areas, in particular, where Infoway could be more forthcoming and proactive," documents obtained by CBC News said. "Firstly: it is essential that Infoway articulate reasonable, meaningful and measurable targets for each new investment area, and that progress against these targets be reported regularly.

"Secondly: Infoway must be more proactive in including the federal government in announcement opportunities, and in recognizing our investments. Not only will this approach ensure that the public is informed about federal support for eHealth, it will also augment opportunities to keep the public abreast of your important work."

The delay was no surprise for Richard Alvarez, president of Canada Health Infoway, given the spending scandal in Ontario surrounding the province's electronic health records program, but the delay was frustrating. Bureaucrats were concerned that the delay in funding would prevent them from hitting their 2010 target.

But Alvarez said once they started to receive the money, they worked hard to put it to use, mainly to help doctors in small offices to convert their files from paper to computer.

The Canadian Medical Association has also been lobbying for each doctor's office to be digitized, said the group's president, Dr. Jeff Turnbull.

"It's costly in terms of the amount of money to get it up and going, but it's also costly in terms of training your staff to use it," Turnbull said. "The office has to close while you transition to use it."

As for the target, Alvarez said it's close. "We'll probably be well into the 49, 48 per cent arena, and we'll hit the 50 per cent, basically, early in the new year," he said.