Ontario health minister resigns ahead of report on eHealth spending abuses

Ontario Health Minister David Caplan is shown in this file photo. THE CANADIAN PRESS/Jacques Boissinot

TORONTO - Ontario's health minister bowed to months of opposition pressure and tendered his resignation Tuesday on the eve of a report into how the province spent $1 billion over 10 years to create electronic health records.

Sources told The Canadian Press that David Caplan notified Premier Dalton McGuinty that he would step down in advance of the auditor general's special report into eHealth Ontario, which also included the awarding of millions of dollars in untendered contracts to consultants.

A health ministry spokesman confirmed late Tuesday that Caplan would officially step down as health minister Wednesday morning.

Auditor General Jim McCarter will release a 50-page special report, which was commissioned last June as the Liberal government tried to defend itself against growing reports about sole-sourced contracts and expense claims by high paid consultants at eHealth.

Those questionable expenses included allowing consultants who were paid up to $2,700 a day to bill taxpayers extra for minor purchases like tea and snacks.

The opposition parties welcomed Caplan's resignation, which they've been calling for since the eHealth scandal first broke.

"Quite frankly it should have happened six months ago, and I think it tells you a lot about what's happened to Dalton McGuinty after six years in office," said Progressive Conservative Leader Tim Hudak.

"He dodged, delayed and stonewalled until backed into a corner."

The New Democrats said they didn't want Caplan's resignation to overshadow the details of what will be in the auditor general's report.

"It's no surprise on the eve of the auditor's report that the minister decided to fall on his sword," said NDP Leader Andrea Horwath.

"It's something that's going to take all the attention, but the reality that we know is the government still presided over hundreds of millions of health-care dollars being flushed down the toilet."

So far, the media have reported $16 million in untendered eHealth contracts that were given to consultants, some of whom had close ties to top executives at the provincial agency and were even paid for consulting each other - driving up their fees.

Even now, months after the scandal first broke and forced the government to replace both eHealth CEO Sarah Kramer and chair Alan Hudson, there are still almost 300 consultants under contract at the agency - down from 385 in April.

The departures of Kramer and Hudson did little to quiet opposition demands that Caplan resign. In 2007, the political veteran weathered the scandal over insider wins at the Ontario Lottery and Gaming Corp., which also saw the opposition calling for his ouster.

Details of some controversial eHealth contracts have been spilling out since last May, including one $30-million, sole-sourced equipment deal for IBM that was approved by a powerful committee of the Liberal cabinet and could prove very troubling for the government.

That's because most of the other contracts were given out by Kramer, who was paid $317,000 at the height of the scandal to leave the job she had held for less than a year, or by other eHealth executives and were not specifically approved by cabinet ministers.

"What we've heard from this government up until now is it's an arms-length agency, they've been making their own decisions, but clearly it's happening at the highest levels of government as well," said Opposition critic Christine Elliott.

"The example has been set that it's OK to do that, and so we've seen these agencies follow suit."

The New Democrats agreed the IBM contract could be key to the auditor general's report Wednesday.

"It goes to the point that the corruption and the rot goes right up to the top," said Horwath.

Governments of all stripes in the past allowed untendered contracts, but the Liberals changed the rules for all ministries and arms-length agencies, boards and commissions to prohibit the practice, Deputy Premier George Smitherman told the legislature Tuesday.

"We've set a new standard and eliminated the prospect for sole sourcing," said Smitherman.

"They did it. We've done it. It's been the pattern, but it's been changed and we've raised the bar."

EHealth was set up last fall after its predecessor, Smart Systems for Health, spent about $650 million and produced so little it was quietly shut down on a Friday and replaced with eHealth the next Monday.