Up to 220 jobs will be eliminated to staunch a sea of red ink at Ajax and Pickering hospital and Scarborough's Centenary but it could be just the beginning as Ontario hospitals struggle to balance their books.

The cuts at the hospitals, both part of the Rouge Valley Health System, include 72 registered nursing positions and 36 beds as part of a deficit elimination plan expected to save about $25 million over the next three years.

"They are going to make us work harder and faster," said Ontario Nurses' Association president Linda Haslam-Stroud, noting Rouge Valley plans to maintain its two emergency departments, key services and patient volume.

The deficit elimination plan was developed in response to a recent peer review conducted by the Central East Local Health Integration Network, which oversees the hospital's funding.

Rouge Valley Health System has been struggling. The peer review released last December showed it was in a critical financial situation, having balanced its budget just once in the past six years and accumulated a debt of $33.8 million during that period.

It had forecast a deficit of $6.5 million for fiscal 2007/08, which ended March 31, and owes about $78 million in long-term debt and working capital deficiency.

A watershed report released by the Canadian Institute for Health Information last November showed Rouge Valley had the fifth-highest mortality rate among hospitals in the GTA.

"What we're looking at is changing the way we do work to operate at benchmark performance, so operating at levels that are consistent with other hospitals of a similar size and complexity," Rouge Valley Health System CEO Rik Ganderton said yesterday. "We're not asking our workforce to operate at levels that other hospitals aren't already at. We're bringing ourselves up to standard."

Rouge Valley Health System is not alone ' hospitals around Ontario have been pressured to balance books before an impending zero-deficit deadline this spring.

Since 2004, public health-care providers have had to sign "accountability agreements" forbidding them from having deficits. This year was the first time the two-year agreements were negotiated with the health integration networks, a process critics say offers little space to manoeuvre when money is tight.

Several hospitals have gone public with their finances ' including Kingston General Hospital, where the Ministry of Health sent in a supervisor to investigate after it forecast deficits of $13.5 million in fiscal 2007/08 and $24 million in 2008/09 ' but specific figures are hard to come by.

"That (lack of transparency) is completely inappropriate in a publicly funded system," said Ontario Health Coalition director Natalie Mehra.

"It's our money."

According to projections based on announced levels of funding, 86 per cent of acute teaching hospitals in Ontario will be in deficit by fiscal 2009/10, Mehra said.

While Rouge Valley Health System is in a bad situation, it is among the few that has been upfront about its figures with its community, Mehra added.

Tom Closson, CEO of the Ontario Hospitals Association, said it is difficult to know for sure how many hospitals face staff and service cuts as many have been granted extensions while they continue negotiating with their Local Health Integrations Network.

"We'll have to wait and see what happens over the next few weeks," he said.

"For some hospitals, the ones that are having greater challenges in balancing their budgets, it might become easier for them once more information is available from the Ministry of Health as to whether there is additional inflationary funding for hospitals."

Haslam-Stroud said she has not heard of significant job reductions for registered nurses in any other hospitals across Ontario.

"This is the biggest that I am aware of in the province," she said.

There are currently 1,048 full-time, part-time and casual registered nursing positions across the Rouge Valley Health System. Haslam-Stroud said her members were told 30 of those nursing positions could disappear this year.

The nursing cuts are part of a plan that will eliminate up to 220 staff positions over the next three years ' including 195 union jobs and 25 non-unionized staff and management positions.

The number of positions to be cut from non-nursing categories is not yet available.

The cuts will represent a 7.5 per cent reduction in positions across both the Ajax and Pickering and Centenary sites.

Hospital administration said buyouts, early retirement packages, and new jobs created through the expansion of both hospital campuses over the next three years would minimize the impact.

"It is not necessarily real people that will leave the organization," Ganderton said yesterday.

Rouge Valley Health System is holding a public meeting Thursday to discuss another part of the deficit elimination plan that involves moving 20 in-patient mental health beds from the Ajax site to Centenary at Ellesmere and Neilson Rds.

The Centenary Health Centre in east Toronto and the Ajax and Pickering General Hospital merged to form Rouge Valley Health System in 1998.

Rouge Valley also includes supportive housing for mentally ill and homeless adults, a long-term day program for adults with serious mental illness and an outpatient psychiatric clinic for children and teens in east Toronto.

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