03/20/2012 05:33 EDT | Updated 05/20/2012 05:12 EDT

Ornge air ambulance report coming tomorrow

Ontario's governing Liberals will be confronted with one of their biggest embarrassments Wednesday when the first report on Ornge, the province's troubled air ambulance service, is tabled in the legislature.

Auditor general Jim McCarter's value-for-money report is expected to shed some light on "financial irregularities" at the agency, which are already under scrutiny by police.

Ornge receives about $150 million a year from the province to operate a non-profit air medical rescue and transport service.

The agency, which created a web of for-profit entities, has been mired in controversy for months over high salaries, questionable business practices and allegations that public dollars may have been used for personal gain.

The opposition parties have hammered Health Minister Deb Matthews almost daily with new revelations from whistleblowers about service disruptions and staff shortages, insisting she must resign over the scandal.

But Matthews said she won't step down.

"In my humble opinion, I have shown tremendous leadership on this file," she told the legislature Tuesday.

"We have new leadership in place. Their instructions were to put patient safety first. Patient safety is their No. 1 issue."

Premier Dalton McGuinty said he hasn't seen McCarter's report, but believes it will offer some insight on Ornge without the politics.

"I think it's really important that we find ways to speak to and uphold the public interest as distinct from partisan interest," he said Tuesday.

"And that's why I'm very much looking forward to the auditor's report. It is arm's length, it is dispassionate, it is objective. It's going to be helpful."

Matthews, whose ministry was in contact with McCarter as he conducted the audit, was also tight-lipped about whether the report will contain any nasty surprises.

"We won't do everything perfectly the first time," she said outside the legislature. "So when there are problems that are identified, I think it's incumbent upon us to fix those problems. The auditor general will give us good advice on that."

The Liberals were already in damage-control mode Tuesday, with McGuinty and Matthews making a feel-good health announcement about two new birthing centres for midwives, the New Democrats said.

Birthing announcement suspicious, NDP says

The timing of the photo op — where McGuinty and Matthews cradled newborns and greeted mothers — is very suspicious, said NDP health critic France Gelinas. There were few details about the initiative, such as where the centres would be built or how much it would cost.

"This is a great news announcement," she said, noting that the NDP promised birthing centres in last fall's election.

"I can't help but think that the only reason it's being announced today is because Ornge is coming out tomorrow."

Both opposition parties say they're expecting a scathing report from McCarter, whose complaints about being stonewalled by Ornge during his routine review prompted Matthews to send in a team of about 30 forensic auditors last December.

She called in the Ontario Provincial Police in February after receiving information from the auditors, which was passed on to police.

McCarter will likely confirm what everyone's known for months — that the government failed to keep an eye on Ornge despite years of warnings and complaints about the agency, said Progressive Conservative health critic Elizabeth Witmer.

"I think it will be quite a damning report for the premier and for the government and the Ministry of Health," said the former health minister.

Report expected to look at $6.7M payment

NDP Leader Andrea Horwath said she believes McCarter will shed more light on what went wrong at Ornge.

He's expected to delve into some of the questionable financial transactions, such as the $6.7 million paid by helicopter firm AgustaWestland to an Ornge subsidiary controlled by then chief executive Chris Mazza.

The payments were made after Ornge used provincial funds to buy 12 helicopters. Mazza's replacement, Ron McKerlie, has acknowledged that the marketing work performed by the Ornge subsidiary didn't reflect the amount of money that was paid.

The government is already aware of McCarter's recommendations because it's usually given a chance to respond to them before the report is tabled, Horwath said.

"A lot of what we've seen already in terms of the government trying to clean up this mess is directly as a result of this auditor's investigation," she said.

"It's not like the government suddenly figured it out and decided that they knew what to do. I suspect — and I would suggest —that much of what's already happening is directly a result of the auditor's involvement over the last several months."

Ornge has turned corner, Matthews says

But Matthews insists Ornge has turned a corner since she replaced Mazza and its board of directors in January.

She's also promised new legislation that would tighten the leash on Ornge and draft a new performance agreement to boost oversight of the agency.

Matthews has acknowledged that the 2005 performance agreement that led to Ornge's ill-fated foray into the for-profit sector wasn't adequate to prevent the apparent "abuse" of taxpayer dollars.

The new rules would stop Ornge from selling assets or taking on more debt without ministry approval, strengthen conflict of interest provisions and give the ministry more audit and inspection powers, she said. It will also create a new patient advocate and complaint process to ensure patient safety.

But Matthews wouldn't say Tuesday when the legislation will be introduced, other than it will be "very soon."

In addition to the criminal probe and McCarter's report, the Ministry of Health's emergency health services branch is also investigating 13 incidents related to air ambulance transports, three of which involved deaths of patients.