Every year, Ontario publishes a ledger. The Public Accounts’ Detailed Schedules of Payments list, ministry by ministry, everyone paid more than $50,000 in a year — road builders, law firms, software vendors — and the total each received. Hardly anyone reads it. It answers a question hardly anyone asks: who, exactly, are we paying?
For technology, one vendor leads by a wide margin. The largest technology-vendor line item in the schedules, two years running, is Microsoft Canada: at least $106 million in 2023–24, and roughly $125 million in 2024–25 — up from about $29 million paid by the central ministry in 2018–19. IBM follows at roughly $59 million, then Oracle at about $34 million. Ontario ministries paid at least $200 million directly to named US-headquartered technology vendors in 2023–24; the following year, with Salesforce and Google joining the list, about $275 million.
Floors, all the way down
Each of those figures is a floor: a provable minimum, with the true number likely sitting somewhere higher. The schedules itemize only payments above $50,000, and spend routed through resellers appears under the reseller’s name. For instance, Ontario buys its Microsoft licensing through a reseller (CDW) and much of its cloud computing through others, so the schedules show almost no direct payments to, say, Amazon Web Services — the cloud spend sits under reseller names, invisible to anyone reading the vendor column. The schedules are also unaudited, their totals include sales tax, and the vendor sums are mine, built from the individual line items.
Zoom out and the floors keep stacking. The two budget lines Ontario dedicates to IT carry an operating budget of roughly $857 million for 2025–26 — a figure that excludes capital, the IT budgeted inside other ministries, and the entire broader public sector: the hospitals, school boards, and municipalities that can buy through the same provincial arrangements and for which no consolidated ledger exists. The largest of the eight ministry IT clusters, at $171.8 million, is Health. And this is one province. Federally, the US Department of Commerce’s guide for American exporters describes the Government of Canada as the largest purchaser of ICT goods and services in the country, at about $5 billion a year.
What the dollar buys
So far this is procurement at scale — big governments buy big software. The next question is what the dollar buys. The vendors are public companies with audited, filed economics. Of every dollar paid to the major US software vendors, roughly 18 to 36 cents exits as net profit. Microsoft — the largest technology line item in Ontario’s schedules, and the federal government’s largest software supplier — sits at the top of the range, at 36 per cent. The specific product lines governments license — cloud services, per-seat productivity subscriptions, creative tools — carry gross margins of 63 to 95 per cent. (Both are company-wide global figures; nobody measures margins on Canadian public-sector sales specifically. More on that below.)
Margins like that follow from the structure of software. Once the product exists, one more licence costs the vendor close to nothing, so the price tracks the buyer’s alternatives. A licence priced far above marginal cost tells you, precisely, what the vendor believes your alternatives are worth. For an organization that standardized on a product a decade ago — files, workflows, integrations, and staff training all assuming it — the honest answer is: not much.
Hold that arithmetic next to the sector doing the paying. The fiscal plan that allocates $171.8 million to the Health IT cluster belongs to a health system that measures itself in nursing hours, wait times, and hallway beds. In January 2026, the Ontario Hospital Association told the province’s pre-budget consultations (opens in new tab) that hospital costs rise about 6 per cent a year while funding rises about 4, leaving the sector with a structural deficit of roughly $1 billion — and that the savings still to be found point at consolidating programs and closing non-core inpatient services. The software Ontario buys mostly works, and cancelling a licence doesn't directly fund surgeries. Still: in its last full fiscal year, Microsoft reported net income equal to 36 per cent of revenue. That figure measures Microsoft everywhere, and says nothing about the margin on Ontario’s contracts specifically; it does place the province’s largest technology payments with a supplier at the profitable end of an already high-margin industry. In a sector where the next dollar comes out of patient care, that deserves at least the question — is this the only way to buy the capability?
Where this argument is weakest
An argument this convenient to someone in my line of work deserves a stress test. The counter-case, as fairly as I can make it:
The margins are global. Microsoft’s 36 per cent covers everything it sells, everywhere; its Ontario contracts are a rounding error inside it. Gross margin also pays for engineering, sales, and data centres — net margin is the number that exits. The defensible claim is narrower: the product category governments license ranks among the most profitable things anyone sells them.
Renting is often right. Nobody should rebuild a word processor out of principle. Anyone who has watched a large custom government IT project fail knows renting a finished product is frequently the prudent call. Custom software carries its own total cost and its own delivery risk.
The sharper finding concerns governance. Ontario’s Auditor General examined the government’s central IT office in 2022 and found it relied on 140 external vendors for systems essential to the continuity of government operations — with third-party assurance reports on none of them, and software licences tracked for three vendors only: Oracle, IBM, and Microsoft. The 2024 follow-up found the fixes still in progress. As of the last audit, the province paid rent and left the meter unread.
Rent, or own
The ledger records, in the end, a set of standing arrangements: a province-wide Microsoft licensing arrangement, mandatory for every Ontario ministry and agency and open to hospitals, school boards, municipalities, and universities; an enterprise Oracle agreement running to 2027; Adobe and Citrix arrangements beside them. The province is re-tendering all of them for renewal.
The question a steward of public money should ask is narrow and quiet: is recurring rent, at margins the vendors themselves publish, the only way for a cash-strapped public sector to acquire capability? For commodity email, documents, and infrastructure, renting probably wins. For the systems that encode how a province delivers care, justice, and service to its people, a second option exists: the public owns what it paid to build — the source, the exit rights, the data. It rarely makes the evaluation grid. Mostly because nobody puts it there.
In an earlier note I described the cloud as a tenancy, with keys that stay yours if you ask for them. The same holds one layer up. A licence is a lease. Ontario’s Microsoft arrangement comes up for renewal this September; the replacement is already in tender. The ledger will record the payment either way. Let’s hope someone weighs the alternatives first.