Other big retail stores considered to host ServiceOntario locations as well as Staples

The decision to move several ServiceOntario locations into Staples is part of a broader accessibility push by the Ford government, one that has also considered retailers like IKEA, Costco, Loblaws and Rexall, Global News can reveal.

The information comes from an internal government business case that examined how the province could improve access to ServiceOntario through partnerships with large retail stores.

The government considered a total of 13 different retailers to host ServiceOntario kiosks, the document shows, as part of a broader, six-stage pilot targeted at “evolving” the government service.

Premier Doug Ford faced immense pressure in January over the decision to shut down some privately operated ServiceOntario locations and open kiosks inside the American stationery giant Staples instead.

The move was met with shock and frustration from owners of ServiceOntario locations set to be closed, according to CityNews, which first reported the story.

The Ford government has said the move will make it easier for people to access government services, comparing it to Canada Post operations located within pharmacies.

The business case shows Ontario is expected to pay Staples a total of $1.75 million in one-time costs to set up its nine ServiceOntario kiosks. It also says the stationery giant will receive a total of $8.29 million over three years to run ServiceOntario locations.

The business case compares that cost to a 2022 total of $3.66 million to run the nine locations set to be moved. Including the setup costs, the document suggests the government will save just $930,000 over three years.

The ServiceOntario locations being replaced with Staples stores will yield varying savings, the business case shows. One of the nine locations is set to cost the government an extra $4,000 per year, a price a government source said is worth paying for expanded opening hours.

A range of different local businesses will close, including some that appear to have been performing well by the government’s own measurements.

Location-by-location reports were partially redacted but show the performance of seven of the nine locations set to close were rated either “good” or “satisfactory.” One location was listed as “needs improvement” and the other poorly rated location was described as a “provider (that) has been unreliable and unresponsive for some time.”

The Staples model will mean a change in how the government funds ServiceOntarios, a government source told Global News.

At current locations, owners pay operating costs like leases and staff and the province provides a fee for every transaction that takes place at a ServiceOntario.

The Staples move, however, will involve a set annual fee of roughly $2.8 million across the nine locations with the stationery chain responsible for staff and other costs, regardless of how many people visit, the source said.

The change means the government can offer longer operating hours without necessarily paying more money for a surge in evening or weekend transactions. If the move is not a success and foot traffic doesn’t increase, though, it could also see the government pay more for fewer visits.

The total payment of $8.29 million is set for the three years of the pilot, plus setup costs. The government source said it may then be renegotiated if the agreement is renewed.

The deal with Staples the Ford government has announced is part of a broader pilot plan, the business case shows.

Across six separate pilot plans — some of which have already launched — the document says it is “evolving our service delivery model. The pilots considered are integrating delivery with other government services, libraries and First Nations. It also plans to co-locate some with other municipal services, ServiceOntario locations on wheels and into retail spaces.

A government source told Global News that Staples was not the only retailer where they would be moving ServiceOntario locations.

A total of 13 separate companies were considered for ServiceOntario locations. The business case shows they were:

• Canadian Tire
• Home Hardware
• IKEA
• McKesson Group
• Rexall
• Sobeys
• Costco
• Hudson Bay Company
• Home Depot
• Staples
• Walmart
• Loblaws
• Metro

The partially-redacted slide deck shows one dropped out because it didn’t have enough Toronto-area locations, while franchising systems stopped another. Another company “did not present an interest” in partnering with the government and yet another stopped replying after initially suggesting it would take part.

A government source said three more partnerships were still to be announced in the retail-partner pilot for ServiceOntario. They did not say which companies were involved but said discussions were still in their early stages.

CityNews has reported Walmart will also host ServiceOntario desks.

The system for other retailers to have ServiceOntario locations will be different, the government source said.

Where Staples has been given a set fee to take over and run ServiceOntario kiosks, the other three retailers will play the role of landlord.

The source said that means whoever is currently running ServiceOntario locations set to be moved will enter into a new lease with one of the retailers and continue to be paid a fee for every transaction they process, just at a new location.

The government source said it was not considering expanding publicly run ServiceOntario locations because unionized workers and procedures made them significantly more expensive to run and less flexible to implement changes.

There is no public timeline yet for the remaining ServiceOntario retailers to be announced.

The government shared the business case with Global News after privacy officially denied a freedom of request in its entirety, suggesting the document could reveal cabinet secrets.

After questions from Global News, Ford government staff agreed to release most of the business case, with some redactions around specific companies and locations.

The release of the business case comes after opposition critics and parliamentary watchdogs have called on the province to be more open about how decisions are made.

A 2020 report by the Auditor General of Ontario, for example, made a series of recommendations for the government to change how it handles business cases, with a focus “to promote transparency and government accountability.”

Both the Ontario Liberals and NDP repeatedly called for transparency from the Ford government over its ServiceOntario and Staples decision.

“If the Conservatives had actually made this decision with the interests of everyday Ontarians in mind, they would have no trouble explaining why they didn’t open it up to a competitive bid,” Ontario NDP critic for consumer protection Tom Rakocevic previously said.

Ontario Liberal Leader Bonnie Crombie called on Ford to “come clean and explain to Ontarians why they are footing the bill” for retrofits to Staples stores.

Asked if he would release the business case at the beginning of February, Ontario Premier Doug Ford said, “We’ll get that for you.”