The Ford government’s controversial decision to close some independent ServiceOntario locations and move them into big box stationary stores cost more than initially calculated, a new report from Ontario’s financial watchdog has found.
The Financial Accountability Officer of Ontario found that while the province underestimated the cost of the move, it also underestimated the benefits, which could be realized over time.
At the beginning of last year, the government announced it was closing nine ServiceOntario locations and moving them into Staples Canada stores as part of a three-year pilot.
The move meant paying Staples Canada $11.7 million over the course of the pilot to run the locations with more services and operating hours that would be almost 50 per cent higher than before, the FAO found.
The $11.7 million figure revealed by the FAO on Wednesday is $1.5 million higher than the cost the government initially calculated. The operating hours enabled by the move are also up by the financial watchdog’s calculation — from 30 per cent to 47.7 per cent.
Whether the deal will ultimately save the province money in the long run remains unclear. The FAO calculated two scenarios:
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- If the province had renewed its agreements with the nine ServiceOntario locations instead of moving them, it would have made a net saving of $800,000 but not received extra hours.
- If Ontario had expanded operating hours with the nine ServiceOntario locations instead of moving them then that would have cost an extra $1.2 million that was avoided by the Staples move.
The main difference between the ServiceOntario locations that closed and the Staples locations is that the former charged per transaction, whereas Staples has agreed to a total fee with the government. The more transactions an independent location completes, the more the government is charged. At Staples, the more transactions are performed, the better value the deal becomes for the province.
A spokesperson for the province said the second scenario was evidence the government had made the right decision, saving funds on expanded hours.
“Today’s FAO report confirms that our partnership with Staples Canada offers better services for people at a better price for taxpayers,” they said in a statement.
“With more than $1.2 million in cost-savings and 50 per cent more hours of service, nearly one third of transactions are taking place during the extended hours. It is clear that this new approach to deliver more convenience and access is working.”
Opposition parties, on the other hand, see the financial report as vindication of their vocal concerns about the move.
Ontario Liberal MPP Stephanie Bowman, who initially requested the FAO’s report, said it revealed a “bad deal” between the government and Staples.
“It has taken a report by an independent office to have any semblance of transparency about this deal. Now we know why,” said Bowman.
“Doug Ford made another bad deal, and he didn’t want us to know about it. The report shows that the Ford Conservative government used numbers to create a story that wasn’t accurate. Why? To hide the fact that they made a bad deal that wastes taxpayers’ money.”
NDP MPP Catherine Fife said in a social media post that “Ontario is paying more for less.”
The decision to move ServiceOntario stores into Staples stores was part of a broader, six-stage pilot targeted at “evolving” the government service, which included looking at 13 stores like IKEA, Metro and Loblaws to host ServiceOntario kiosks.
The current Staples pilot will expire at the beginning of 2027.
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