TORONTO -- Premier Dalton McGuinty may be ready to throw the government's watchdog a bone.

Ombudsman Andre Marin has repeatedly asked the government to extend his jurisdiction over municipalities, universities, schools and hospitals -- the so-called MUSH sector -- as other provinces have allowed.

"The premier had a productive conversation with the ombudsman and suggested he was open to the idea of giving the ombudsman greater oversight of the MUSH sector," Neala Barton, the premier's press secretary, said.

"At this point, he hasn't made a commitment to move forward, but he has signalled that he would like to discuss this further."

Marin, who released his annual report at Queen's Park on Tuesday, said he spoke with McGuinty on the telephone and the premier appeared to have an open mind about the issue.

"So long as the door is open I remain optimistic," he added.

Hospitals in Ontario, Marin said, are like "medieval fortresses," and he suggested ombudsman oversight might have pre-empted the fiasco around Ornge air ambulance service.

"I can't tell you the Ornge scandal would not have happened with our oversight. What I can tell you is it may not have happened," Marin said.

But Progressive Conservative MPP Steve Clark -- whose party has brought Ornge to the forefront -- said the Tories would prefer to have a select committee of the legislature deal with Ornge.

"The ombudsman can have his opinion on whether it would have stopped," Clark said. "We still believe an all-party select committee is the only way to handle this file."

Marin also repeated concerns he's already raised this year over the province's deficit-cutting plans to privatize some services.

He said he's worried the cost-cutting efforts could see some government services delivered privately, without his office's ability to watch over them.

"It's a sad situation to see our oversight eroding," Marin said. "We're on the eve of regressing."

Complaints handled by his office were up nearly 30% last year and covered everything from road salt in drinking water to a $20,000 hydro bill.

NDP health critic France Gelinas lauded the idea of giving Marin jurisdiction over MUSH, adding, "I hope this year is the time when it finally happens."

Green Party Leader Mike Schreiner agreed.

"We need more transparency and accountability -- not less," he said.