The Ontario government is seeking a buyer for the Province of Ontario Savings Office. The privatization initiative is part of the 2001 Ontario Budget released today.

Operated by the government since 1921, the POSO has 23 branches plus five smaller agencies across Ontario that provide limited banking services. This proposed sale is the first step in the Government of Ontario’s Value for Money Review. “It is clear the private sector has more expertise than we do when it comes to running a bank,” Ontario Finance Minister Jim Flaherty said in announcing the move.

The Ontario SuperBuild Corp. will solicit offers to purchase the POSO. During the sale process the Ontario governemnt will continue to guarantee all funds on deposit. To provide security for POSO clients, the government’s guarantee on term deposits will continue until maturity. For POSO chequing and savings accounts the guarantee will continue up to the date of the sale.

A request for proposals to hire a financial advisor to assist with the sale will soon be posted on the government’s MERX electronic tendering service (www.merx.cebra.com). It will be interesting to see if former Finance Minister Ernie Eves’ new employer, Credit Suisse First Boston, makes a run at the assignment.

Procedures will be put in place to ensure that personal customer information will not be disclosed in the sale process. The Deputy Minister of Finance has written to the Information and Privacy Commissioner, requesting the Commissioner’s assistance in developing a protocol to be followed in the sale process that fulfills all privacy requirements.

For remote POSO locations, the prospective buyer must maintain a physical presence in those communities, and ensure that substantially similar banking services are provided during a planned three-year transition period.