The provincial health ministry provided some grim news, saying Ontario hospitals could still find themselves on the short end of the financial stick issue later this year even after the Ontario government increases their funding to them.

“Definitely, layoff notices will be happening this year,” said Deb Matthews, in an interview last week. “We are in tough economic times. But we will be really working hard to mitigate any impact on patient care, while sustaining the funding.”

As the Liberals wrestle with a record $25.7 billion deficit, the government is looking at ways to cut costs, and raise revenue quickly. With health care, the largest budget item in the budget, the Liberals are looking to establish “sustainable funding”, after seven years of what Matthews says was fixing the problems in the health care sector caused by the Progressive Conservatives.

“There were investments that had to be made,” she said. “Health care was underfunded for so long. We had to repair the damaged by the previous government. Now we have to knit the different pieces together.”

Health care spending by the Liberals has increased each year by 6 per cent since 2003 when they were elected. She said they managed to reduce wait times, provided money for hospital expansions, and cash for needed programs. But Matthews said that type of spending “is not sustainable” now.

She said there are about 20 per cent of beds being used in hospitals across the province by patients that should not be there.

Even though layoff notices will be issued in hospitals, most of the positions will be filled within the hospital structure, she said.

“Positions are filled within,” said Matthews.

In this year’s budget, the Liberals are looking at three spending options for health care, a one per cent increase, a two per cent hike, or a three per cent boost. The provincial government is scheduled to deliver its 2010 budget later this month.

Matthews said the provincial government has already told hospital officials their budgets will increase, but how much remains a question mark.

Hospitals across the province, including in Hamilton, have been cutting back their spending because they are expecting no more than a 2 per cent increase to their budgets. Hospital officials say their costs, though, are increasing by 4 per cent.

Hamilton Health Sciences, which is dealing with a $17-million deficit, has already    proposed eliminating 140 jobs, cut 50 beds and do 1,200 fewer surgeries in 2010. St. Joseph’s Healthcare is eliminating 12 jobs, and increasing its parking fees to tamp down its $6 million deficit.

Matthews said provincial officials and hospital representatives have been working together to find common ground on the province’s health care funding.