STRATFORD, Ont. - EHealth Ontario's board of directors and the province's health minister won't be fired despite the public outcry over a spending scandal at the agency, Premier Dalton McGuinty said Tuesday.

The premier flatly rejected opposition calls for Health Minister David Caplan's head, and said he still has confidence in his minister and the board, even though "clearly unacceptable" things have happened at eHealth.

"When you're in opposition, they're all hanging offences," McGuinty said following a speech at a digital media conference in Stratford, Ont.

"When you're in government, you actually have to exercise judgment and distinguish between different kinds of circumstances. And this one, to my way of thinking, doesn't call for the resignation of my minister."

Caplan took all the right steps -- including asking Auditor General Jim McCarter to speed up his probe of eHealth -- and shouldn't be blamed for the conduct of an agency which operates at arm's-length from the Ministry of Health, he said.

McGuinty also launched into a passionate defence of eHealth board chairman Dr. Alan Hudson, who signed off on a $114,000 bonus for former CEO Sarah Kramer after only a few months on the job.

"I'm very proud of the work that Dr. Hudson has done and continues to do for us," he said of the neurosurgeon, who's in charge of reducing medical wait times in Ontario.

"He's acted in a volunteer capacity at eHealth, and you just couldn't get a better, more committed or more accomplished individual -- at any pay level -- to take on that responsibility."

EHealth, which is tasked with creating electronic health records in Ontario, has come under fire for questionable spending and awarding nearly $5 million in untendered contracts.

Opposition parties have accused both Kramer and Hudson of giving Liberal-friendly firms lucrative contracts without taking competitive bids and allowing some consultants to charge up to $3,000 a day.

Kramer was abruptly removed as president and CEO on Sunday amid the furor over eHealth, which allowed high-paid consultants to bill taxpayers for minor purchases like tea and snacks.

One consulting firm that received an untendered contract charged eHealth for such tasks as reading newspaper articles, reviewing voice-mail messages and talking shop during a subway ride.

Another consultant, Penny Ballem, was paid $30,000 for 78 hours work over the objections of an eHealth employee, who said no contract was signed for her work, according to documents obtained by the Progressive Conservatives under freedom of information laws.

Ballem told the Globe and Mail she had no idea a staff member at eHealth had questioned her invoice.

The political storm grew after it was discovered that Kramer was paid the $114,000 bonus on top of her $380,000 salary, just a few months after she started the job last November.

Caplan at first defended the bonus, saying it was what Kramer would have received at her previous job at Cancer Care Ontario. But he quickly changed his tune late last week after the provincial agency said Kramer would have received about $40,000 if she'd stayed.

Late Saturday, the board reached a mutual agreement with Kramer that she needed to leave eHealth to help restore public confidence in the agency.

She'll also receive nearly $317,000 in compensation, a move that's fuelled opposition fury.

"Ordinary people are very angry. They are working very hard to earn every dollar that they possibly can under very difficult, economic challenging times, and they are irate, they are outraged at the spending that's taken place and at the lack of oversight at this agency," said Elizabeth Witmer, Opposition critic and former health minister.

"And at the end of the day, minister Caplan must be accountable and he must resign."

Caplan said many "valid" questions have been raised, but the auditor general must sort it all out first.

"I'm obviously going to wait to see what the results of those reviews, and I will take action," he said.

"But I'm also going to keep driving forward on an ambitious e-health agenda."

Both Caplan and McGuinty have insisted that no rules were broken in awarding the untendered contracts, which were allowed because of the "urgency" of eHealth's task -- even though the province's deadline for electronic health records is 2015.

Government officials point out that tougher contract procurement rules have been in place at eHealth since late March. Deputy health minister Ron Sapsford -- who helped draft those rules -- has been installed as temporary CEO of eHealth.

EHealth was established last fall after the first provincial agency tasked with creating electronic health records, Smart Systems for Health, spent about $650 million but failed to produce anything of value before it was quietly shut down.

Smart Systems spent 15 per cent of its $225-million annual budget on consultants, even though it employed 166 people with annual salaries exceeding $100,000.

Both McGuinty and Caplan have defended eHealth, saying it's tough to recruit top experts to build a provincewide electronic health records system when President Barack Obama is pushing a similar project in the U.S.

The U.S. is investing $50 billion over five years on e-health, while Ontario expects to spend another $2 billion on the project over the next three years.

Ontario is lagging behind many other provinces in creating a provincewide system of electronic health records.

Canada Health Infoway, a non-profit agency set up by the federal government, said Alberta, Prince Edward Island and the Northwest Territories should have electronic health records in place by next year, while Quebec and British Columbia are not far behind.