TORONTO - Demands for a public inquiry into whether eHealth Ontario broke the law in awarding of millions of dollars in untendered contracts to what the Opposition calls Liberal-friendly firms were flatly rejected Tuesday by Premier Dalton McGuinty.

A scathing auditor general's report into the $1 billion Ontario has spent trying to create electronic health records has raised questions about serious abuses of taxpayers' money and a full inquiry is needed, said Progressive Conservative Leader Tim Hudak.

"The auditor's report was filled with examples of bid rigging and price fixing, and that borders on criminal behaviour, so we must get to the bottom of why this took place and who benefited," Hudak said.

"We know this government will not give up its dirty secrets willingly."

In his special report on eHealth released last week, auditor general Jim McCarter found that allegations of favouritism in awarding of the untendered consulting contracts were "largely true."

However, McCarter said there was no evidence of fraud or criminal activity nor any indication that partisan politics played a role.

One of the consulting firms at the centre of the scandal, Courtyard Group, has always maintained that it is not a Liberal-friendly agency.

"The auditor notes favouritism played a role in awarding untendered contracts, and rigging the rules even around some tendered contracts," Hudak said.

"That merits further investigation (because) one person's favouritism is another person's political ties."

David Caplan resigned as health minister last week on the eve of the report's release, but Hudak said an "auditor's report and a token resignation do not provide the closure the people of Ontario deserve to see."

Speaking in Hamilton on Tuesday, McGuinty said Caplan did the honourable thing by offering his resignation, and he rejected Hudak's call for a public inquiry as partisan sniping.

"We will not be moving ahead with a public inquiry," McGuinty said following an event at Mohawk College.

"The opposition has a different take on this and I understand that."

The New Democrats said there must be some sort of investigation into the auditor general's findings of favouritism and bid rigging.

"When we spend that much money of our cherished health-care dollars, and at the same time people are losing local health services, we have a right to demand answers in as vigorous a way as possible," said NDP Leader Andrea Horwath.

"I think the government should be open to any kind of mechanism . . . whether that's a public inquiry or a criminal investigation."

The Opposition will continue to demand the resignation of deputy premier George Smitherman, who was health minister for the bulk of the time eHealth was giving out the consulting contracts, said Hudak.

"The auditor general made it clear how the rot of entitlement at eHealth led all the way to the McGuinty cabinet table," he said.

"He demonstrated how Dalton McGuinty and George Smitherman presided over a $1-billion boondoggle."

Serious questions remain about the role of senior cabinet ministers, said Hudak, after the auditor's report showed management board of cabinet waived the rules for untendered contracts, a problem that he suspects is not limited to eHealth.

"Given that many of the warning signs we saw at eHealth are also now on display at Cancer Care Ontario, we would encourage a far-ranging probe that would also have the authority to investigate all of the wider contracting practices of the ministry of health and the agencies that fall under its mandate," said Hudak.

"It's only fair to demand the full and complete truth as to why so much money disappeared."

The government released an internal audit of Cancer Care Ontario last week that said the agency violated its tendering rules on consulting contracts, a claim disputed by the agency.

The Cancer Care audit was released by the government, along with 10,000 pages of documents from the Ministry of Health and eHealth Ontario, at exactly the same moment as the auditor general released his damning report on eHealth.

"Even the release of the auditor general's report was manipulated," said Hudak.

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