Ontario has reached a tentative agreement with the association representing the province’s doctors in a deal that Premier Dalton McGuinty says showed flexibility on both sides of the bargaining table.

The cash-strapped government announced Tuesday that it had reached a new fee agreement with doctors that will add $100 million to their compensation while reversing fee cuts announced earlier this year.

According to Health Minister Deb Matthews, every dollar is offset with system savings that doctors control.

“Doctors control a very large part of our health budget,” Matthews told reporters. “If they order an unnecessary test, they control a lot of health-care spending. By working with doctors, we can reduce those expenditures and we’re happy to pay for new doctors that are joining our system.”

She said the province adds about 600 doctors annually.

Matthews said the bargaining process between the government and the OMA was not a typical negotiation.

“We actually engaged doctors at the tables where they worked with ministry folk to identify places where we can improve care,” she said. “Everyone knows that in the health care system we’re not getting the best value for every dollar, so they identified those places where we can do better working together.”

Matthews also defended the decision to reverse several of the fee cuts the government imposed in May.

“I didn’t want to get stuck in a position where I was so entrenched in my perspective I wouldn’t listen to doctors,” she said.

While the agreement will need to be ratified, the Ontario Medical Association Board of Directors has unanimously recommended the agreement to its members. A ratification vote is expected to take place in December.

If approved, the deal would last until 2014.

Upon announcing the agreement, McGuinty said the deal respects doctors as well as “Ontario’s fiscal plan,” as the government struggles with a $14.4-billion deficit.

“It protects all the gains we’ve made together on behalf of Ontario patients,” he told reporters during a news conference. “But what’s more, it will make further gains on behalf of Ontario patients.”

A statement issued by the province says the agreement includes a plan to lower wait time through e-consultations with doctors and more investments to help expand access to family doctors, including the expansion of house calls.

The plan also includes reducing the number of unnecessary medical exams.

The changes to six fees include the self-referral fee, the Optical Coherence Tomography fee, the after-hours premium, the anesthesia flat fee, the laparoscopic premium, and the Coronary Intensive Care premium.

In written remarks, Matthews said she was pleased to have struck a deal that "puts patients first and respects our doctors."

"This agreement renews a real partnership between our government and Ontario’s doctors, as we transform Ontario’s public medicare system so that it is there for our children and grandchildren," Matthews said.

In his own prepared comment, OMA President Doug Weir echoed Matthews' sentiment.

"Most important to patients, we’ve established a partnership that means that we can continue this important work in the future," he said.

Talks between the province and the OMA, which represents 25,000 doctors, broke off earlier this year after the government made regulatory changes to cut Ontario Health Insurance Plan fees and premiums.