Opposition critics demanded an explanation Thursday after a legislative committee heard conflicting accounts about whether the government had any power over Ornge, which is under a criminal probe for "financial irregularities."
Lynne Golding, a lawyer who worked for Ornge, testified Wednesday that the government had all the tools it needed to rein in the organization at any time.
That flies in the face of Matthews' earlier testimony she was "handcuffed" by rules that prevented her from acting sooner to stop the waste of taxpayer dollars at Ornge.
She has long maintained she was misled by Ornge management and unable to curtail its activities. At first she blamed the government's toothless performance agreement with Ornge, then said she was powerless because Ornge was federally incorporated.
But Golding said the government was consulted during the lengthy process of drafting the 2005 performance agreement and did have the tools to bring Ornge to heel.
It could have issued a notice of default or threatened to do so, she said.
"That usually gets the attention of a grant recipient," Golding added.
She said the government also had a lot of clout as Ornge's main source of money, giving it about $150 million a year to provide the non-profit service.
"Why did the minister mislead Ontarians by saying ... that the previous performance agreement made her powerless to control Ornge?" New Democrat Jagmeet Singh asked in the legislature.
But Matthews maintains that the performance agreement tied her hands.
"I stand by the auditor general's report," she said in an interview. "He was very clear that the performance agreement was weak, that it needed to be strengthened, that it didn't give us the tools."
Auditor general Jim McCarter is an independent voice, unlike Golding who was paid by Ornge, she added.
As for pulling Ornge's funding, Matthews said that wasn't an option.
"To withhold funding from an air ambulance service — yes, that is something we could have done," she said.
"Was that something we wanted to do? No, because we wanted to protect service. Protecting patient safety was the No. 1 aim."
McCarter criticized both Ornge and the government in his March report, which found that the organization was given $730 million over five years with virtually no government oversight of how the money was spent. Ornge was also allowed to borrow almost $300 million with the province's blessing.
He found a "number of examples of questionable business practices" at Ornge, which has been mired in controversy for months over high salaries and allegations that public dollars may have been used for personal gain.
He said Ornge's former managers and directors also refused to give him records related to its for-profit subsidiaries, including who the shareholders were and how much senior management was being paid.
The opposition parties insist the only way to get to the bottom of the scandal is to strike a select committee to examine Ornge.
The New Democrats and Conservatives, who collectively hold more seats in the legislature than the minority Liberals, banded together to pass a motion to strike the committee.
Despite Matthews' promise that she'd abide by the will of the legislature, the government has refused to create a special Ornge committee, saying it's not needed because the public accounts committee is already doing that work.
In protest, the Conservatives have triggered 30-minute division bells repeatedly for weeks as a delaying tactic in the legislature, which the government said is eating into valuable debate time on other bills.
The Tories complain that each witness brought before the public accounts committee is restricted to 30 minutes of testimony, leaving each party with just eight minutes to question them. However, witnesses can be recalled at a later date.
Government house leader John Milloy said that's the arrangement the all-party committee agreed to and they can change it if they want.
But it also prevents the public accounts committee from doing other work, such as keeping on eye on how the government is spending money, said Tory house leader Jim Wilson.
"Clearly the scandal at Ornge is growing and the scope of the investigation goes beyond the mandate of the public accounts committee, which is to review only the auditor's report," he said.
"The Ornge scandal goes beyond his special report as is now clearly evident."
A special committee would also have more powers to delve deeper into the problems at Ornge, said NDP health critic France Gelinas.
It would be able to put out a wide call for witnesses who could come forward voluntarily, instead of having all members of the all-party committee agree on who should be called in to testify, she said.