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Opposition warned Liberals of Ornge irregularities in 2004

When Ontario's auditor general slammed the government for failing to oversee the publicly funded Ornge, the Liberals defended themselves by saying they were handcuffed by a weak performance agreement that they signed with the organization.

But documents obtained by the Progressive Conservatives and New Democrats show the Liberals were warned eight years ago that there were problems with the agreement that created Ornge before it was approved by cabinet.

Bureaucrats cautioned the government that its role in Ornge and the amount of control it had over the organization wasn't "sufficiently addressed,'' according to the documents.

One lawyer in the Ministry of Health and Long-Term Care's legal services branch said he had "serious concerns about the substance and tone'' of the internal application to create Ornge.

Yet cabinet approved the agreement and decided to award the contract for air ambulance services in 2005 to a corporation that was later renamed Ornge, after its orange aircraft.

Then-health minister George Smitherman, who signed the performance agreement in 2005, helped create Ornge after a number of coroner's reports and the auditor general urged Ontario to fix its patchwork air ambulance delivery.

Smitherman has blamed health bureaucrats for failing to notice problems at Ornge, saying he didn't see them coming and would regret it "for the rest of my life.''

But the documents show the government ignored the red flags about Ornge for years, even from its own bureaucrats, said NDP health critic France Gelinas.

"It basically says that they had plenty of warning telling them that we didn't need to go down this path, that alarm bells were ringing that they should pay attention to,'' she said.

"The scandal of it all is that there had been many, many warning signs, as far back as 2004. And the willingness to act was never there.''

It's also clear that "someone was manipulating the cabinet approvals process'' and the Liberals wanted to suppress that information, said Tory Frank Klees.

"You can't have a situation where you have cabinet ministers sitting around a table with a report such as the one that was tabled,'' he said.

"And there were other documents as well that simply confirm that the … proposal was very faulty, the senior civil servants advised strongly against it, the decision was made to support it notwithstanding that. That there was not political inference here is now impossible to believe.''

Health Minister Deb Matthews, who wasn't in cabinet until 2007, said she couldn't say why the performance agreement with Ornge was approved, given the concerns expressed by senior bureaucrats.

"I'm not going to talk about what happens in cabinet other than to say that decisions are made very thoughtfully and we take advice from a variety of places very seriously,'' she said.

But she insists that there was little the government could do to rein in Ornge once the organization went off the rails.

Ornge has been mired in controversy for months over high executive salaries and allegations that public dollars may have been used for personal gain.

Auditor general Jim McCarter has criticized the Liberals for giving Ornge $730 million over five years with virtually no oversight of how the money was spent.