Smarter Buying for Larger Savings

Centralized Procurement can Save Taxpayers $1 Billion a Year

Peter Bethlenfalvy is MPP for Pickering — Uxbridge and President of the Treasury Board of Ontario. This blog is one instalment in a series on the Ontario government’s Smart Initiatives, aimed at generating savings and improving user experience through innovative approaches to government. Read his previous blog here.

You and your family have probably done it before — buying in bulk to save money. In fact, it’s also a well-established practice in the private sector. Countless businesses buy products they need in bulk to reduce costs on their bottom line.

It might surprise you to learn that, while bulk buying is used everywhere from Main Street to Bay Street, Ontario’s government was stuck with a fragmented, outdated procurement process that was inefficient and costly to taxpayers.

That is, until now.

As part of our government’s Smart Initiatives, I was proud to announce our plan to centralize procurement — that means, buying products in bulk to fill the needs of government offices and Ministries as well as hospitals, schools, and any of the other countless agencies or organizations in the broader public sector.

This will only make it easier and cheaper for service providers across the province to buy products and goods — it will save taxpayers money.

Just how much money?

Our government ran the numbers and found that, once the plan is fully implemented, centralized procurement will save taxpayers an estimated $1 billion each year.

That’s $1 billion not currently going to support front-line healthcare or education services. It’s $1 billion that’s not being invested in building roads, hospitals or schools.

It was wasted because, for years, Ontario’s government didn’t think about programs or spending with a whole-of-government mindset. For too long, government was separated into silos that didn’t properly communicate with one another, making it impossible to co-ordinate meaningful change across the public service and broader public sector.

I launched our Smart Initiatives to fundamentally change the culture of government. By not only breaking down silos and seeking out opportunities for collaboration, we’re delivering a better user experience, saving taxpayer dollars and helping to return Ontario to fiscal health.

During my time in the private sector, I saw how much money bulk buying could save businesses of all types. I knew the potential that existed to save money for the people of Ontario. We promised to bring the best practices of business to the business of government and that’s exactly what we’re doing.

Building a modern centralized procurement system will drive significant cost savings through the streamlining of purchasing processes across vendors and the consolidation of contracts. From pacemakers to bandages, to computer and IT hardware across the Ontario Public Service and broader public sector, there are incredible savings and efficiencies to be found. This system will apply to Ontario ministries, provincial agencies, as well as broader public sector organizations such as hospitals and schools.

Until now, all these organizations would buy these things separately only filling the needs of their singular organization. That means they paid a lot more than they needed to. Under our plan, we will use the leading supply chain processes and practices currently at use in the private sector to eliminate fragmentation and leverage the power of bulk buying. That means they would save a lot of money on the things they need to run day-to-day.

It’s the only way to find innovative solutions instead of looking at government spending as a zero-sum game.

Through our plan to centralize procurement, as well as our other Smart Initiatives, we will bring Ontario’s government services into the modern era. Instead of wasting tax dollars through fragmentation and a lack of communication throughout government, we can generate $1 billion in savings that can support vital front-line services. We can improve the experience of Ontarians when they interact with government and lessen the burden of government on their day-to-day lives.

Centralized procurement is just one way we’re making that change. Our Smart Initiatives include many of innovative ways to improve government and I’m excited to share them with you.

Stay tuned to this channel, as well as my social media accounts on Twitter, Facebook, and LinkedIn for more of these posts. You can learn more about our Smart Initiatives at Ontario.ca/Smart