Ontario auditor general releases report on Ornge probe

TORONTO, Ont. – Ontario’s auditor general said the Liberal government did not sufficiently monitor the Ornge air ambulance service while its operators made questionable business deals with more than $700 million of taxpayers’ money.

“The ministry didn’t do its job in making sure that taxpayer interests were protected,” said auditor general Jim McCarter, who said the government has ignored a number of red flags with Ornge and did not look to see if it’s living up to its commitments.

“There was a number of questionable business transactions that should have been questioned much earlier,” he said.

He described Ornge as a not-for-profit company which became a mini-conglomerate with a number of non-profit and for-profit spin offs, and described the process of getting information from the company as “pulling teeth”.

McCarter said funding for the air ambulance service increased 20 per cent since it was set up five years ago, but the number of patients transported actually declined.

He explained that Ornge set up a complex web of subsidiaries, one of which paid $15 million for a building to be a headquarters for the air ambulance service, but was leased back to Ornge at 40 per cent above fair market rent.

The company then borrowed $24 million for the building, and sent the $9 million difference from the $15-million purchase price to a related for-profit company controlled by Ornge management.

However, Ornge’s former management refused to give the auditor records from subsidiaries it said were not funded by the province, and would not even say who the shareholders were or how much senior management was being paid.

“We had a very tough time even nailing down these subsidiaries, and quite frankly I don’t think we got them all,” said McCarter.

Ornge founder Dr. Chris Mazza’s $1.4 million annual salary — the highest in the Ontario public sector — was not posted on the government’s annual sunshine list of public employees making over $100,000 a year.

McCarter found Ornge’s land ambulances transported only about 15 per cent of the projected number of patients, and at an average per-patient cost that was nearly as high as the cost to transport a patient by air.

Ornge needed nine helicopters and six airplanes, but purchased 12 helicopters and 10 planes, and is repaying the $300-million in financing using taxpayers’ money meant for ambulance services.

The government replaced the entire board of directors at Ornge in January and this week signed a new performance agreement with the new management at the agency, and will introduce legislation today to provide more provincial oversight.

Health Minister Deb Matthews issued a statement saying she will be “acting on all of the auditor’s recommendations.”

“[The issues with Ornge] led my ministry officials to refer the matter to the OPP, and that criminal investigation is currently underway,” she explained.

However, both the provincial Conservatives and the NDP are not satisfied, and are calling on Matthews to step down.

“This minister – if she wants to do the right thing, the honourable thing – must resign,” said Conservative MPP Frank Klees.

“She was either completely incompetent, or wilfully ignorant. Either way, it cuts the same. It’s unacceptable,” said NDP leader Andrea Horwath, adding that taxpayers should be seeing red over the scandal.

Matthews said she refuses to abandon her post.