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TORONTO – Ontario plans to create a centralized procurement system across government and the broader public sector.

The government estimates it will save $1 billion a year, starting in about five years.

Treasury Board President Peter Bethlenfalvy says there is currently too much duplication and fragmentation in the way government ministries, as well as schools and hospitals, buy goods and services.

He says in a digital era it doesn’t make sense to operate in silos, and centralizing procurement will bring significant cost savings.

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Bethlenfalvy says creating such a system won’t be quick, but in the meantime, Government and Consumer Services Minister Bill Walker says new contracts will be limited to two-year terms.

The province has also created a Lean and Continuous Improvements Office to modernize how services are delivered and increase productivity.