The hospitals have been poorly run and now must live within their budgets, he told reporters on the way into a Liberal caucus meeting at Queen's Park.

'It wouldn't be fair to bail out Rouge Valley for activity that other hospitals are not involved in,' Smitherman said, noting a new chief executive officer has been brought in following a review.

'There's room for improvement.'

The cuts at Ajax and Pickering hospitals and Scarborough Centenary hospital include 72 nursing jobs and the closure of 36 beds as part of a deficit elimination plan to save $25 million over three years.

Smitherman acknowledged the cuts will be hard on the community but said publicly funded hospitals can't be allowed to operate on a 'blank cheque basis' as health spending eats up a larger share of the provincial budget.

'The alternative is to have a free-for-all where hospitals spend whatever they want and send the bill at the end of the year. The people's health system can't be sustained on that basis.'

Smitherman, whose ministry has previously given bail-out cash to hospitals, said he won't know for a month or so how many others are in the same straits as Rouge Valley.

Nurses who lose their jobs with Rouge Valley should be able to find positions at area hospitals as the government follows through with a plan to hire 9,000 more nurses by 2011.

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