Toronto council approves $20M deal with U.S. tech company PayIt, but some competitors crying foul

Agreement a step forward in modernizing the city, Mayor John Tory says

CBC.ca
May 6, 2021
Samantha Beattie

Toronto councillors approved a $20-million deal Wednesday that will soon allow residents to pay city bills on one digital platform rather than juggling the current 11 separate portals -- but some local tech firms say they didn't get a fair shake in bidding for the job.

The city says the service provided by U.S.-based PayIt will streamline how residents pay their property taxes, parking tickets and other municipal services.

"This is a step forward in modernizing our government and improving the customer experience for the residents we serve in a number of ways," said Mayor John Tory in a statement.

"Residents, businesses and visitors to Toronto want a simple, consistent and connected interaction with the City and this new service offering will help us deliver just that."

But some people have raised concerns that the way the city made the deal shut out local tech companies and was not transparent.

PayIt representatives approached the city in 2019 with their idea for the digital platform. They then worked with the city for many months before a contract was put up for tender.

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Tech Reset Canada founder Bianca Wylie said this process gave PayIt a clear advantage for when the city did put the job up for a bid.

"PayIt worked with city staff outside a city contract for many months," Wylie said. "There's a significant amount of work done prior. It's hard to say [other companies] are starting from the same point here."

Wylie said for a deal as big as this there needs to be more accountability to the public to ensure taxpayers are not stuck with a less than ideal service.

Other proposal rejected
The city originally brought forward a recommendation to councillors last summer for a sole-source deal with PayIt, which was rejected. So staff put out what's called a Swiss challenge, opening up the bidding to other companies, but giving PayIt the option to match any of their proposals.

Toronto resident Sam Selim said his company SQL Power Group, which has experience worldwide submitting proposals for similar initiatives, put in a bid that would provide the same service at a lower cost.

"Here's a company locally willing to do the same work for half the price," Selim said of his company's proposal that cost about $100,000 to put together.

The city rejected SQL's proposal, but the worst part was PayIt was not forced to match, he said. 

Coun. James Pasternak, who voted in favour of the deal Wednesday, defended the city's process.

"It has been done through established city policy, and it's been vetted very carefully," Pasternak said.

"I think that the process has been fair. There's always recourse for those vendors that felt that they did not have a fair shake."

Pasternak noted the agreement is a three-year pilot program that allows the city to end it with no penalty.

Residents will benefit, city says
Starting in the fall, residents, businesses and visitors will be able to pay property taxes, utility bills and parking fines through electronic funds transfer, credit or debit cards.

Later the city will add the option to pay for permits, licences and court fines, it said in a news release.

The service will come with an app and the option for e-billing.

"Other payment methods will continue to be maintained to ensure access is equitable, adaptive and accessible to the needs of the city's diverse population," said the statement.

Residents will pay a 1.5 per cent fee for debit transactions and 2.35 per cent fee for credit cards.

The city says it will save $11 million over five years on costs including the credit card fees it currently pays. PayIt will earn between $20 million and $25 million from the contract.