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Ornge to revert to not-for-profit air ambulance co-ordinator

Interim CEO of Ornge Ron McKerlie was at the Ornge offices late on Wednesday evening in Mississauga on Jan. 25, 2012.

Deborah Baic/The Globe and Mail/Deborah Baic/The Globe and Mail

The Ontario government is pledging to turn the province's embattled Ornge agency back into a not-for-profit air ambulance co-ordinator, but it will continue to operate its own fleet of helicopters and airplanes.

Opposition critics and aviation experts say the government is not going far enough, and are calling on it to unwind Ornge's aviation operations and allow private companies to operate the air ambulance service. They say a lack of transparency surrounding Ornge's acquisition of the aircraft that allowed it to compete against private sector players raises questions about whether taxpayers got the best possible deal.

Ornge operates the helicopters and airplanes through private, for-profit companies. Health Minister Deb Matthews said on Monday that she has asked the newly appointed board of Ornge to wind down the for-profit entities.

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"We are absolutely committed to bringing the operations of Ornge back to a not-for-profit organization," Ms. Matthews said in an interview. "It will take time."

The province created Ornge as a not-for-profit entity in 2006 to co-ordinate all aspects of the province's air ambulance services. Ornge then created for-profit entities to compete with the companies that were already providing air ambulance services.

Ornge will continue to own and operate aircraft. Jennifer Tracey, a spokeswoman for Ornge, said the aircraft are owned by Ornge Issuer Trust, and Ornge is its sole beneficiary. For profit entities provide services to Ornge on a "cost recovery basis," she said.

Ornge bought 11 Sikorsky aircraft and four hangars from Canadian Helicopters in 2009 for $30-million. Lynne Golding, a lawyer at Fasken Martineau, advised Ornge on the deal, which ultimately paved the way for it to take over a contract from the company Canadian Helicopters to operate the province's helicopter ambulance service. The contract was worth $30-million a year in revenue to Canadian Helicopters.

Canadian Helicopters, which provides air ambulance services in other provinces, including Nova Scotia, had the contract since 1977 and had won it through a competitive bidding process. But when Ornge announced in 2010 that it was taking over the contract, there was no competitive process to determine whether another company could provide the service for less money.

Ron McKerlie, interim chief executive officer of Ornge, said in an email response to The Globe that a competitive tender was not required because Ornge was bringing the helicopter service in-house. A "cost review" showed that Ornge could provide the services for less than Canadian Helicopters, he said. The new board has not examined this cost review, he added.

"The minute someone says there is no competitive bidding process required, red flags should go up," said Progressive Conservative MPP Frank Klees. "There isn't a private company that would purchase equipment without a competitive bidding process."

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Aviation sources said they have urged Mr. McKerlie to seek competitive bids for the operations and, in the meantime, allow Canadian Helicopters to resume the contract, which formally expires on March 31. But the sources say the plan is to keep the assets in-house.

The winding down of the for-profit companies began last week with the appointment of a trustee in bankruptcy of two entities, including Ornge Global GP, which gave Ornge the legal authority to terminate the employment of chief executive officer Chris Mazza without severance. He had been on a medical leave since December.

Dr. Mazza recently put his home in Toronto's Kingsway neighbourhood up for sale. He is asking $1.4-million for the two-storey, three-bedroom house on "one of Toronto's most spectacular treed crescents," according to the real-estate listing.

Kelly Long, Dr. Mazza's partner and the former director of health care relations at Ornge, answered the phone at the house on Monday, but said Dr. Mazza was unable to talk. "You do know he's on medical leave," she said.

Editor's Note: An earlier version of this story incorrectly said Canadian Helicopters provides air ambulance services in B.C. This version has been corrected.

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