Government purchasing of Amazon services continues to trend upward

By Allison Smith December 4, 2019

The province of Ontario spent at least $865,000 on products and services from Amazon last year, an increase of 17 per cent from 2017-18, according to the public accounts. 

This includes a recurring contract with Amazon Web Services, one of the world’s largest cloud computing platforms that hosts the website and provides its IT services, procured by the Treasury Board Secretariat for $195,139. TBS is headed up by President Peter Bethlenfalvy, the minister in charge of trimming the public service’s overall spending. 

The other four Amazon procurements range from $91,748 to $258,541 and came from the ministries of natural resources, attorney general, community safety and corrections, and government and consumer services. The $258,541 purchase, from the Ministry of Natural Resources and Forestry, specifies it was from 

Last year’s spending is part of a slow creep, as government ministries’ dealings with Amazon increase year-over-year. 

In 2017-18, Ontario ministries listed three Amazon procurements in the public accounts, totalling around $548,000, and up from $376,000 in 2016-17. 

(Separately, TBS paid an additional $187,884 for Amazon Web Services that year and $228,359 the year prior.) 

Ontario’s procurement of Amazon products and services is small relative to its overall budget, but its growth reflects an international trend as the online behemoth aims to integrate its vast selection of products into government, potentially shaking up existing supply chains. 

On October 29, Amazon announced the expansion of its Amazon Business and Business Prime services into Canada. The company says the services are designed to “meet unique and complex procurement needs” for “hospitals, educational institutions, large organizations [and] government agencies,” as well as private businesses, and promises “sharp pricing, broad selection and convenient delivery.”

A spokesperson for Bethlenfalvy told Queen’s Park Today “the government will continue to make effective procurement decisions on a case-by-case basis to ensure the best use of taxpayer dollars.”

South of the border, a report from the Institute for Local Self-Reliance, which advocates for small businesses in Washington D.C., warns Amazon is slowly securing contracts to provide cities, counties and schools with office and classroom supplies, library books, electronics and more, opening the way for “billions of dollars in public spending to shift to Amazon.”

Local government suppliers in Baltimore — where government procurement of Amazon products has ramped up in recent years — told the New York Times they are worried their companies could go out of business or be forced to partner with Amazon thanks to the convenience and cost savings it offers public-sector institutions. 

In Ontario, Amazon has hired multiple in-house and consultant lobbyists to “promote policies that support Amazon’s continued growth, investment, and job creation in Ontario,” according to the province’s lobbying registry. 

Separately, consultants from Global Public Affairs are campaigning to expand the government’s use of Amazon Web Services into other government departments.

Several lobbyists’ registrations say they are “Seeking [a] government contract with multiple government departments and institutions with regards to Amazon Cloud based solutions and related support services” and “Seeking to influence policy direction related to cloud based services.”

Premier Doug Ford has touted Amazon for creating warehouse jobs in Ontario. In July, the premier cited 600 job openings at Amazon’s facility near Bolton as proof the province’s workforce can’t keep up with job creation. “It’s a good thing that’s happening in Ontario right now,” Ford said at the time. 

Procurements under $50,000 do not have to be disclosed in the public accounts, so more smaller purchases from the online retailer could have been made, but not listed.

With files from Sabrina Nanji