Province of Ontario Savings Office - Sale and Closure

Sale and Closure

In the provincial budget of 2001, Ontario finance minister Jim Flaherty signalled the government's intention to sell POSO's assets to the private sector, announcing that the Province was "getting out of the banking business" as part of the government's privatization program to end "wasteful activities that could be eliminated".

Critics, most notably the Ontario Public Service Employees Union, the provincial public-sector union that represented POSO's two hundred employees, objected that the sale was ideologically motivated, as POSO actually turned a small annual profit of about $10 million, and moreover that, as POSO's deposits went to Ontario's consolidated revenue fund, from which they could be loaned to the government at rates below those available from private lenders, the government was actually increasing its borrowing costs at a time when its stated objective was eliminating the province's burgeoning budget deficit.

An unsuccessful petition campaign was mounted to attempt to convince the government to abandon its plans for the sale, but the assets were sold to the Desjardins credit union and POSO ceased operations on April 1, 2003.