TORONTO - Hospital funding should be increased to avoid losing thousands of jobs in Ontario and creating even more delays in a system already overburdened by an aging population, union leaders said Monday.

Michael Hurley, CUPE's Ontario Council of Hospital Unions president, said funding isn't keeping pace with inflation, and he suggested the shortfall could endanger as many as 5,000 jobs and result in a loss of more than nine million hours of patient care.

"You're going to see an ongoing and aggressive downsizing of the system that we haven't experienced for some time, and that's going to roll out for individuals as longer wait times and difficulty accessing service and a general deterioration of the quality of service," Hurley said.

The union expects 4,000 jobs to be lost through attrition and 1,000 through involuntary layoffs, with small and rural hospitals particularly at risk.

Hurley wants the province to take over hospital deficits and provide more than the 2.1 per cent funding increase promised by the government for 2009.

"The provincial government should fund hospitals adequately, which is to meet their inflationary costs, and should cover their deficits, which are projected next year I think to be $350 million," Hurley said.

Canadian Auto Workers president Ken Lewenza, who represents 23,000 members in the health-care field, said the need for properly funded health care is even more important amid the current downturn because workers who lose their jobs lose benefits as well.

"There's going to be more services provided as people lose their jobs and feel the stresses of not having a job and what that means to families and others that won't have the benefits that are bargained through a union to assist them," Lewenza said.

The government should "go over and beyond" to eliminate the waiting periods and continue working to reverse the progress made since the massive cuts under former Conservative premier Mike Harris, Lewenza said.

"The McGuinty government has made an attempt to correct those errors of the past, and to reverse that direction would be insane at this particular time."

The Liberals broke a key election promise when they introduced a health tax in 2004, a move they argued was necessary to combat a $5.6-billion deficit they inherited from the previous Tory government. The health tax brings in about $3 billion a year.

The Ontario Hospital Association wouldn't confirm Hurley's figure of 5,000 potential job losses, saying it has "specifically chosen to not communicate publicly about specific potential funding or job-loss scenarios because such forecasting is imprecise."

Also Monday, OPSEU vice-president Patty Rout expressed concern Health Minister David Caplan won't meet the promised 2.1 per cent funding increase.

A spokesman for Caplan said that worry is unfounded, noting that Ontario hospitals have been told they should continue to plan according to the funding assumptions noted in last year's budget.

"While we recognize the challenges of the current economic environment, the McGuinty government is committed to ensuring continued investment in our health-care sector, and took on a deficit in the current fiscal year to protect services," Caplan said in a statement.

Increased funding, however, doesn't guarantee the money will go where it's needed, warned NDP Leader Howard Hampton.

"The government has increased funding, but what you also have to look at is that more and more of health-care funding under the McGuinty government isn't going towards health care," Hampton said.

"Every time you get into one of these profit-driven, private-consortia hospitals, literally hundreds of millions of dollars that's labelled health-care funding isn't going to health-care services, it's going to some Bay Street corporation."

It's still unclear how many hospitals are facing deficits, though government statistics show 52 hospitals were in the red at the end of September.