Premier Dalton McGuinty said Wednesday that his government should have known about the spending problems at eHealth Ontario but promised it is taking action to prevent such debacles in the future.

"It's an important day to accept responsibility and to remind ourselves it's more than just  driving hard on results," he told a news conference in the wake of a damning report on eHealth.

McGuinty said he was impatient to get results, but added, "I never said anything about breaking the rules."

He said it was "unacceptable" to have events such as spending $42,000 to keep a consultant on call, as one example.

Auditor General Jim McCarter said in his 50-page report that the province has spent about $1 billion since 2002 on trying to put Ontarians' medical records online, but has little to show for the money.

eHealth Ontario is an arm's-length agency, one of more than 600 that answer to the provincial government. It had a CEO and board of directors that reported to the health minister.

David Caplan, who had been health minister since June 2008, tendered his resignation on Tuesday night before the report's release.

McGuinty said it didn't matter that the actual decisions on spending were removed from the elected arm of government. "My responsibility, our responsibility, is to take responsibility for such decisions and practices."

The premier said he regretfully accepted Caplan's resignation. He has appointed Deb Matthews as the new health minister.

In a released statement, Caplan said: "I have had the opportunity to review the Auditor General's final report on eHealth Ontario. It is clear from the Auditor General's report that the Electronic Health Record initiative has not had the level of oversight that I, and the people of Ontario, would expect."

McGuinty said the government will accept McCarter's recommendations and build up the expertise within government to reduce the reliance on consultants and has already moved to increase the oversight of arm's-length agencies.

Expenses of cabinet ministers and senior officials will be posted online, the premier said.

The government said in June, at the height of the eHealth uproar, that the sole-sourced hiring of consultants would end and new controls would be put on what expenses they could claim.

Opposition reaction

But NDP Leader Andrea Horwath said the McGuinty government has done everything it could to delay this day of reckoning and put off taking responsibility.

"A billion of our precious health care dollars have been flushed down the toilet with nothing to show for it," she said, adding, the government has made a "mockery of accountability."

In addition, Ontario remains at the "back of the pack" when it comes to having a functioning online medical records system, she said.

McGuinty backed his cabinet minister and senior official even when major problems were coming clear.

Progressive Conservative Leader Tim Hudak said this is actually a McGuinty scandal.

"Sarah Kramer is Dalton McGuinty's hand-picked CEO," he said.

Hudak also charged that McGuinty established the climate for Kramer, who resigned from eHealth in June, and Dr. Allan Hudson, the former board chair, to operate without oversight in a "culture of entitlement."

As a result, Ontarians will have to work longer and harder -- and pay more in taxes, he said.

Hudak also said he expected two resignations -- Caplan and former health minister George Smitherman. "We will continue to pursue George Smitherman's role in this affair," he said, adding the worst problems occurred on Smitherman's watch.

McGuinty said in keeping with parliamentary tradition, the minister in place at that time takes responsibility. "I mean, this goes all the way back to Minister Clement," he said, referring to then-health minister Tony Clement in the Progressive Conservative government of Premier Mike Harris.

Much of this is just "gamesmanship," the premier said.

But Ontarians want to know what happened, how it happened and what steps are being taken to ensure it's not repeated. "I've worked hard to answer those questions in the best way possible," he said.