It will cost $1.5M more than announced to run 9 Service Ontario branches in Staples stores: financial watchdog

NDP MPP Catherine Fife criticized the government for its inaccurate initial cost estimate and suggested the government is letting public services – from Service Ontario to home care – plummet in quality.

Every week, my office deals with Ontarians who are frustrated with their inability to access the services that their taxes have paid for,” Fife said in a news release.

Matthew D’Amico, minister McCarthy’s spokesperson, issued a statement Thursday that didn’t address the higher contract cost but highlighted the pilot project’s positives:

The FAO report “confirms that our partnership with Staples Canada offers better services for people at a better price for taxpayers,” he wrote.

“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.”

Ontario Liberal Finance Critic Stephanie Bowman, whose request triggered the FAO’s review of the Staples deal, has issued a news release:

“It has taken a report by an independent office to have any semblance of transparency about this deal. Now we know why. 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,” Bowman said.

Green Party Leader Mike Schreiner criticized the government for signing a deal that he said doesn’t save taxpayers money.

“This government will go to any lengths to further their privatization agenda and put profits before the people of Ontario,” Schreiner said in a news release.

Jeffrey Novak, Ontario’s financial accountability officer, said his office figured out the government would be on the hook for $1.5 million more with the Staples deal by costing the agreement and overhead costs and, in particular, reviewing Staples’ operating hours.

Why did the province miss that when it released its initial cost estimate? “That’s a good question for the government,” he said during a briefing with reporters.

Novak noted Staples has a different compensation structure to previous private Service Ontario operators, but added the government is bringing in a new system in 2025.

The majority of Service Ontario locations (70 per cent) in the province are privately operated.

Queen’s Park has several watchdogs, so don’t fret if you can’t keep them straight in your head.

The FAO, per its own description, “provides independent analysis of the state of the Province’s finances, trends in the provincial economy, and related matters important to the Legislative Assembly of Ontario.”

The FAO is set to hold a 10 a.m. ET media briefing. We'll update this story with any new information we learn from that news conference.

The FAO reports the Service Ontario sites in Staples stores have longer operating hours and provide some additional services – “mainly complex health card services.”

The nine locations (mostly in the Greater Toronto and Hamilton Area) are all now up and running and will continue until late January of 2027.

Todd McCarthy, minister of public and business service delivery, defended the contract with Staples in the wake of details going public. He said it will save a projected $900,000 over the course of the three year pilot project.

The FAO isn’t so sure.

In one scenario, the FAO said it would have been cheaper to renew agreements with the original operators. This would have cost $10.9 million – which is cheaper than the Staples deal.

But in another scenario, the province would have inked deals with the original operators but pushed for expanded hours and additional health card services. That could have cost $12.9 million, which is more expensive.

Reporters will have a chance later Wednesday to ask the FAO questions about these scenarios.

The FAO’s report is out. Its topline finding is that Ontario is set to spend $11.7 million to run 9 Service Ontario branches in Staples Canada stores over the next three years – that’s about $1.5 million more than the estimate the government provided the public last year.

You can find the full report here, if you'd like to read it for yourself.

We’re awaiting a new report Wednesday from Ontario’s Financial Accountability Office (FAO) that looks into the Ford government’s sole-source deal to move 9 Service Ontario branches into Staples stores.

The government has defended the $10.2 million contract with Staples Canada, saying it would cut down on operating costs after the initial spend of retrofitting the stores.

However, all three opposition parties at Queen’s Park blasted the move and the Ontario Liberals asked the FAO to investigate.

The report will be released at 8:30 a.m. ET. Check back on this story for more.