Ontario looks to private sector for IT savings


Data service providers could benefit from Ontario’s need to cut deeply into an expected $15.2 billion annual debt if it is able to strike public-private partnerships as it hopes under the latest provincial budget.

The budget released by Finance minister Dwight Duncan on Tuesday says legislation will be introduced by the minority Liberal government letting it go after partnership deals for ServiceOntario, which offers one-stop offices for a range of services from different departments such as drivers’ and business licences.

Because these deals haven’t been negotiated yet, the budget doesn’t estimate what the savings will be. It does say that to expand ServiceOntario’s online offerings would cost $100 million, money the province can’t justify at this point.

Potential service providers include BCE Inc.’s Bell Canada, IBM Canada and CGI Group, which already have contracts from municipal, provincial and federal governments.

While saving money is a prime objective, the province will “set customer service standards and ensure protection of privacy and personal data,” the budget added. “The proposed legislation would also amend a number of statutes to enable both public–private partnerships and the ongoing transformation of services, including the continued adoption of online services.”

Over the coming months, subject to the passage of proposed legislation, the government will finalize its preferred approach and move forward with a competitive process to secure a public–private partnership for the development of ServiceOntario, the budget said.

“That’s probably pretty good news for the ICT sector,” said Linda Leonard, senior vice-president of the Information Technology Association of Canada (ITAC) which represents telecommunications, computer hardware and software and consulting firms.

However, Alison Brooks, public sector research director at IDC Canada, wondered how much money the province could save. ServiceOntario is only a small part of the overall IT services within the government, she noted.

Provincial spending will be reduced by a cumulative $17.7 billion over the next three years compared to what it would have otherwise been, the budget says. That means the annual average growth in program spending will be held to 1.0 per cent between the fiscal years 2011–12 and 2014–15.

There are other cost-saving measures which may impact the number of provincial IT staff. The budget proposes cutting 1,000 full-time public service jobs (although it doesn’t specify where), “strong action to manage current and future compensation costs.” And it said it will try to negotiate a wage freeze with public sector unions.

One potential roadblock is the government has to get the budget through a legislature in which is doesn’t have a majority. The last election was held in October, 2011. Generally, provincial and federal opposition parties are loath to bring down a government less than a year after an election.

The budget says the Liberals in trying to negotiate public-private partnerships, it will be guided by what it says are two successful deals: the Highway 407 Express Toll Route (ETR), an east-west expressway north of Toronto, and the Teranet electronic land registration system.

But there are mentions throughout the budget of other impacts on the province’s IT architecture. For example, the government hopes to save $90 million through IT consolidation.

The government also promises to save money by continuing to digitize paper documents. Over time, the budget says, digital imaging and data capturing technologies will reduce the size of the government’s office-space footprint by converting millions of paper files to protected electronic records.

On the other hand, Ontario will begin to modernize court services by providing some services online (such as court forms, the filing of court documentation and paying court fees). “This transformational initiative will improve access to justice for Ontarians by moving to provide 24-hour online services (versus limited daytime hours for traditional services), and ensuring funding is being used where it is needed most,” the budget says.

The budget takes some of its spending-cutting cues from a provincially-appointed commission on reform headed by economist Don Drummond, which in February urged the government to outsource as much of its IT as possible and co-ordinate spending.

“Increased co-ordination of strategic sourcing, contract management and product/process standardization will contribute to potential cost savings of six to eight per cent” as the Drummond report urged, the budget said.

“The government will continue pursuing savings and efficiencies across the broader public sector by leveraging or further capitalizing on existing collective purchasing capacity and working with health care institutions, school boards and postsecondary institutions to develop participation targets for collaborative procurement.”


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