The Financial Accountability Office of Ontario (FAO) released a report on Wednesday concluding that the Ford government’s decision to move nine ServiceOntario centres into Staples Canada stores will cost $11.7 million, more than one million higher than the province’s initial estimate.
In 2024, as first reported by CityNews, some privately run ServiceOntario outlets were shut down with little notice and moved into Staples and Walmart locations as part of a sole-sourced, three-year, taxpayer-funded deal. Previously, the nine ServiceOntario centres had been privately operated and relocated following their existing agreements’ expiry.
Six ServiceOntario centres were moved on Feb. 1, 2024, followed by the remaining three on May 9, 2024, Sept. 12, 2024, and Dec. 4, 2024. Each centre will operate until Jan. 31, 2027.
On Wednesday, the FAO found that the cost estimate of $11.7 million is $1.5 million higher than the government’s original assessment of $10.2 million.
“The FAO estimates that the cost to relocate and operate the nine ServiceOntario centres in Staples Canada stores will total $11.7 million over the duration of the Staples Canada agreement to Jan. 31, 2027,” the FAO said. “This is comprised of $1.7 million in one-time set-up costs in 2023-24 and 2024-25 and $10 million in labour and overhead costs over the duration of the agreement.”
The FAO attributed the higher cost estimate to using the actual operating hours of ServiceOntario locations within Staples Canada stores, which increased by 47.7 per cent compared to the original locations. In contrast, the province’s cost estimate was based on an anticipated 30 per cent increase in operating hours.
“However, this will be partially offset by a 30 per cent reduction in the number of service desks,” the FAO noted.
Staples Canada was expected to receive compensation from the government for “one-time set-up costs” related to the relocation of ServiceOntario centres and the ongoing operating expenses, factoring in the number of service desks and staffing costs at each location.
Todd McCarthy, the minister of public and business service delivery, said last year that the move was partly about saving taxpayer money—initially projected at $900,000 over three years, mainly through not paying leasing costs.
The province’s Liberal Party requested the FAO “provide analysis of the government’s decision to award contracts without a competitive bidding process to Staples and Walmart, to privatize parts of ServiceOntario.”
In its report, the FAO indicated that the purpose was to “examine the financial impact” of the province’s plan to relocate the nine ServiceOntario centres into Staples Canada stores.
