Moving nine ServiceOntario locations into existing Staples stores will cost the government more than it estimated, says a new report from Ontario’s financial watchdog.
However, when factoring in the expanded hours offered by the retail store locations, the province will be saving more money than expected, says the report from the Financial Accountability Office of Ontario released Wednesday morning.
While the province estimated it would cost $10.2 million to “relocate and operate” the nine centres, the actual cost is $11.7 million by 2027 — with $1.7 million for start-up costs and then $10 million for labour and overhead, the report says.
However, that extra cost is due to the longer operating hours — which increased by 47.7 per cent and were a key point Premier Doug Ford touted when promoting the Staples deal — which the government didn’t fully account for, said the FAO.
A year ago, the province unveiled its plan to move nine of the privately operated centres into existing Staples locations for a three-year pilot program running to 2027, with longer hours, access to free parking and some additional services as deals with the independent operators came to an end.
When accounting for the expanded hours the Staples locations are open, and comparing to a scenario where the old ServiceOntario locations would have matched those longer hours, the province saves $1.2 million, given the original locations would cost $12.9 million, compared to $11.7 million for Staples.
In a statement, a spokesperson for Minister of Public and Business Service Delivery Todd McCarthy said the FAO report “confirms that our partnership with Staples Canada offers better services for people at a better price for taxpayers.”
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,” said Matthew D’Amico, McCarthy’s press secretary and issues manager.
But the deal came under fire from critics for being sole-sourced instead of undergoing a competitive bidding process.
The FAO review was prompted by Liberal MPP Stephanie Bowman (Don Valley West), but the government had welcomed the probe, saying Ontarians were gaining “more convenience, more access, longer hours, weeknights to eight or nine … all day Saturdays.”
Bowman said Wednesday that “the report found that the numbers the Ford government gave the public were wrong.”
The Ford government, she added, “has no problem taking profits from Ontario’s small businesses and giving them to American companies … this deal has lacked transparency from the beginning.”
McCarthy has previously said the Staples deal is not a new concept for the province because it has, for years, been using retailers — such as Canadian Tire — to house ServiceOntario locations, including when the previous Liberal government was in power.
But Ontario Greens’ Leader Mike Schreiner, the MPP for Guelph, accused the government of furthering “their privatization agenda and put profits before the people of Ontario … Everything this government does is designed to help well-connected corporate insiders and the richest turn a profit at the expense of everyday people in our communities that are struggling to get by.”
