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Opposition members have called for the resignation of Ontario Health Minister David Caplan.

Ontario Premier Dalton McGuinty is poised to shake up the senior ranks of his cabinet, following the resignation of Health Minister David Caplan on the eve of the release of a provincial auditor's report that is scathingly critical of his Health Ministry.

Mr. Caplan, a key member of cabinet who survived an earlier scandal involving the province's lottery corporation, will resign Wednesday, said Greg Dennis, a spokesman in his office.

Another source close to Mr. Caplan said the minister offered to step down. "He took it for the team," the source said.

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The move leaves Mr. Caplan, 44, returning to the back benches after serving in senior cabinet roles since the Liberals came to power six years ago. And it leaves Mr. McGuinty attempting to put an end to a scandal over spending on a digital medical record initiative that has engulfed his government since June.

But Auditor-General Jim McCarter will likely trigger a fresh round of questions over the McGuinty government's stewardship of one of its own ministries when he releases his report Wednesday. The report makes it clear that the practices that embroiled eHealth Ontario in controversy this summer were also widespread within Ontario's Health Ministry. The Globe and Mail reported this week that the ministry has for years been awarding contracts to consultants without seeking competitive bids, according to sources familiar with the auditor's report.

Mr. McGuinty has for months sought to portray eHealth as a rogue agency. Revelations that eHealth awarded lucrative contracts to consultants without competitive tenders led to the resignations of chief executive officer Sarah Kramer and chairman Alan Hudson in June.

Mr. McGuinty introduced new rules this summer, banning all government ministries and the province's 615 arm's-length agencies from awarding contracts without competitive tenders.

Opposition leaders, who have been calling for Mr. Caplan's resignation for nearly five months, said last night that the minister's departure was long overdue and accused Mr. McGuinty of stonewalling.

"Only when he was smoked out by the Auditor-General's report did he finally act," Progressive Conservative Leader Tim Hudak told reporters.

He and New Democrat Leader Andrea Horwath said Mr. Caplan's departure from cabinet will not end the matter.

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Deputy Premier George Smitherman should also resign, Mr. Hudak said. Spending on creating a digital record of every resident's medical history ramped up during the five years Mr. Smitherman served as health minister. Mr. Caplan assumed the post just over a year ago, when Mr. Smitherman took over Energy and Infrastructure.

Many government observers say Mr. Smitherman's days in cabinet are numbered because he has mused about running for mayor of Toronto.

"Smitherman should be gone," Mr. Hudak said. "Quite frankly, he has one foot in the mayor's campaign and one foot here at Queen's Park."

According to sources familiar with the Auditor-General's report, Mr. McCarter says Ms. Kramer doled out lucrative contracts based on her prior relationships with consulting firms. He takes her to task for awarding contracts to unnamed favoured consultants, and for failing to disclose to the board of eHealth sole-sourced contracts valued at over $1-million, according to the sources.

A spokeswoman for Ms. Kramer said she cannot comment on the report until it is released today.

The Auditor-General reserves his harshest criticisms for the Health Ministry, accusing it of also awarding contracts to consultants on the basis of favouritism.

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He says in his report that the management board of cabinet gave the ministry a waiver in 2008, allowing it to award contracts without competitive bids for a three-month period, the sources said. The waiver paved the way for an unnamed firm to receive additional contracts and gain an advantage over other consultants vying for business, the report says.

The sources identified the firm as Courtyard Group. Its managing director, Michael Guerriere, worked with Dr. Hudson at University Health Network.

For Mr. Caplan, becoming health minister was a particularly proud moment. He was stepping into a role once held by his mother, Elinor Caplan, in premier David Peterson's government.

Ms. Caplan told The Globe Tuesday night that she's proud of her son.

"He's committed to public service and always tries to do what is right," she said. "His boys will be happy to have more of his time and attention."

With a report from Anna Mehler Paperny

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