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Demands on Ontario municipalities are growing, but resources aren’t growing with them. As service expectations, reporting requirements, infrastructure needs, and fiscal pressures add to municipal workloads, existing ways of working can only stretch so far.
The solution can’t simply be asking teams to take on more. It requires changing how the work gets done. Digital transformation in the public sector can help municipalities create capacity without adding resources by rethinking where staff time is spent, which processes create unnecessary work, and where technology can eliminate low-value tasks.
Why Ontario municipalities are facing a growing capacity challenge
Municipal finance teams have always operated within constraints. What’s changed is the number and complexity of expectations being layered on. At the same time, many municipalities still rely on processes and systems that weren’t designed for today’s volume of reporting, data, and service demands.
Workforce pressures are stretching capacity even further. Municipalities are preparing for the retirement of long-tenured employees who hold significant institutional knowledge, while attracting the next generation of talent is proving difficult.
Why “doing more with less” isn’t a sustainable solution for municipalities
The approach of “doing more with less” has meant asking existing resources to carry more of the load. Teams take on additional services, reporting requirements, and responsibilities with the same number of people, or fewer. That model has limits and is unsustainable for municipalities long term. There’s only so much additional work a team can absorb if the processes behind it don’t change.
Technology can help municipalities break the capacity crunch by making routine work easier to manage without putting more pressure on already stretched teams.
3 tips for making public sector digital transformation more effective
Making transformation count requires municipalities to think beyond the technology itself and consider what needs to change, how work can improve, and where their people can add greater value.
Here are three practical considerations to help municipal finance leaders make transformation efforts more effective.
Start with the outcome, not the technology.
Municipalities should define the outcome they want to achieve before selecting technology. Starting with technology can add systems and complexity without addressing the processes that are creating unnecessary work.
According to a 2026 BDO Canada survey, 41% of Canadian public sector organizations report experimenting with AI without yet achieving meaningful return on investment (ROI). In many cases, the issue isn’t necessarily the technology. ROI is harder to achieve when organizations introduce AI before deciding what problem it’s there to solve and what needs to change around it.
Before investing in new solutions, finance leaders should consider:
- What business or service outcome are we trying to improve?
- What is preventing us from achieving that outcome today?
- What would success look like for the municipality, our people, and the community we serve?
- How will we know whether we’ve achieved that outcome?
Identify where capacity is being consumed and redesign the work.
Once the outcome is defined, work backwards through the processes that support it. Look for activities that consume significant staff time without adding equivalent value, such as repetitive data entry, manual reconciliations, duplicated work, or fragmented reporting.
Then, consider where the process can be:
- Simplified by eliminating unnecessary steps or duplication.
- Standardized to reduce variation and manual intervention.
- Modernized through better data, redesigned processes, and technology.
AI in municipal government can support efforts to simplify, standardize, and modernize work. But municipalities need to identify where it can meaningfully improve outcomes rather than simply automating existing inefficiencies.
AI in municipal government
AI shouldn’t be layered on top of a process that already isn’t working. Start by identifying the problem you need to solve and whether AI is actually the right tool for it.
If AI is the right fit, consider what needs to be in place to make it work, from reliable data and infrastructure to governance and employee adoption.
What’s the current stage of AI and digital transformation in the public sector?
16% of Canadian public sector organizations say they’re actively embedding AI into workflows and operations, according to our survey.
38% are still modernizing their core systems.
Used effectively, AI tools can help reduce lower-value, repetitive work, enabling people to focus on the meaningful activities where human judgement, context, and decision-making matter most.
How do public sector organizations expect AI to impact their workforce?
72% of Canadian public sector organizations say they see AI supporting employees while keeping humans at the centre, according to our 2026 survey.
Only 16% of public sector respondents believe AI will have minimal impact on their organization.
What does it take to move AI from experimentation to meaningful impact? Our AI Vision 2030 report explores the readiness, governance, and workforce considerations organizations need to move beyond AI pilots and prepare for the agentic future of work.
Reinvest the capacity you create.
The real value of modernization isn’t the hours you save, but what your teams can do with that time. Rather than filling capacity with more administrative work, municipalities can put it toward the planning, analysis, and decision support that too often get pushed aside by day-to-day demands.
For municipal finance teams, that could mean:
- Less time compiling information, more time on long-term planning and forecasting. That gives finance leaders greater insight into the municipality’s financial position, allowing them to test different scenarios and plan for what’s ahead.
- Less time reconciling data, more time analyzing it. Reliable information gives finance teams more opportunity to provide meaningful analysis and decision support to municipal leadership.
- Less time producing reports manually, more time improving the insight behind them. More efficient reporting to council, other levels of government, and constituents can strengthen transparency while freeing leaders to focus on what the information means and what should happen next.
- Less repetitive work, more meaningful work for employees. Modernizing finance processes can reduce repetitive work and give employees more opportunities to use their judgement and skills, which can also support attraction and retention.
How BDO helps municipalities do more
BDO has supported more than 900 municipalities across Canada, helping them address everything from day-to-day financial and operational challenges to larger modernization initiatives. We can help your municipality identify where capacity is being consumed, rethink the processes behind the work, and determine where technology can practically help.
Our teams live and work in the communities you serve. With BDO, you’re working with a partner who cares as deeply about those communities as you do and can help you do more for your staff and constituents.