03/19/2013 11:31 EDT | Updated 05/19/2013 05:12 EDT

Ontario Health Minister Deb Matthews Under Fire Over $2 Million Ornge Bonuses


TORONTO - The governing Liberals defended Ontario's troubled air ambulance service Tuesday for awarding nearly $2 million in bonuses to staff after promising last year to cancel them.

NDP Leader Andrea Horwath asked why Ornge didn't stick to its guns when it said it wouldn't give performance pay to non-unionized employees.

"The fact that executives at a disgraced public company will be getting big bonuses is just another bit of bitter news for patients who want to see health care dollars spent helping people get well, not padding the pockets of already generous public salaries," she said in the legislature.

But Ornge had little choice after a group of federally regulated employees launched an appeal with Human Resources and Skills Development Canada and won, said Health Minister Deb Matthews.

"In order to avoid the high cost of litigation, (Ornge) did decide to offer bonuses to their employees with a very clear understanding that this is one time," she replied.

"It brings their salary up to what it was last year. It is not higher than last year's, and they have a plan going forward."

From now on, there will be "very strict guidelines" about how staff will be evaluated for performance pay, Matthews said later outside the legislative chamber.

"I would have preferred that they were able to stick with their original decision not to pay performance pay, but they lost that appeal," she said.

Ornge will give performance pay to 424 unionized and non-unionized employees this fiscal year — an average of about $4,632 each, according to board chairman Ian Delaney.

The bonuses won't be awarded to anyone who worked for the now bankrupt entities of Ornge, he said in a letter to Matthews obtained by The Canadian Press.

"Ornge is committed to operating within the funding envelope provided to it by the government of Ontario and will deal with this and other costs within that envelope," Delaney wrote in the March 15 letter.

That raises questions about whether the $2 million in payouts will affect Ornge's operations, said Progressive Conservative Frank Klees.

"They've already said that they've hired additional paramedics and pilots, they said they weren't going to increase the existing funding envelope," Klees said.

"Are there going to be cutbacks on some other part of the essential service so they can pay this $2 million? That's a lot of money."

Premier Kathleen Wynne said her government will re-introduce legislation to "tighten up the oversight" of Ornge and address performance pay for executives and managers in the broader public sector.

As for the Ornge bonuses, Wynne said: "This is a decision that was taken out of our hands."

The Liberals always say they're going to crack down on bonuses and CEO salaries, but never do, Horwath said.

"People expect to actually see real change, and they're not seeing any of it," she said. "They're seeing just excuses time and time again."

Ornge, which receives about $150 million a year from the government, has been under fire for more than a year over sky-high salaries and financial irregularities that are currently under police investigation.

EHealth, the electronic health records agency that landed in hot water in 2009, also tried to cancel employee bonuses with mixed results.

EHealth employees filed a class-action lawsuit after Matthews told the agency to cancel raises of up to 1.9 per cent and promised bonuses of up to 7.8 per cent in 2011.

Last August, the head of eHealth Ontario, Greg Reed, returned a bonus of $81,250 on top of his $329,000 salary after The Canadian Press reported it.

Former health minister David Caplan was forced to resign in 2009 after eHealth spent $1 billion trying to develop electronic health records but had very little to show for all the money.

Millions of dollars were given to consultants with ties to the Liberal government in the form of untendered contracts, while auditors uncovered widespread abuses of expense accounts at the agency.