Item - 2026.GG31.38

The General Government Committee:

1. Forwarded the item to City Council without recommendation.

The General Government Committee:

1. Requested the Executive Director, Municipal Licensing and Standards, and the Chief Procurement Officer to report directly to the July 29, 30 and 31, 2026 meeting of City Council to provide updated financial information related to the proposed contract amendment.

Toronto Municipal Code Chapter 349, Animals, establishes rules and regulations for responsible pet ownership in the City, including a requirement for every owner of a dog or cat to obtain a pet licence. In 2023, the City entered a no-cost, two-year pilot with DocuPet Inc., a Kingston-based Canadian company that provides online pet licensing services to municipalities, with the goal of improving pet licensing revenue and uptake, streamlining program administration, and enhancing customer experience. The pilot commenced on October 17, 2023, and was originally scheduled to end on October 17, 2025.

At its meeting on June 25 and 26, 2025, City Council authorized Municipal Licensing and Standards to negotiate and enter into a non-competitive contract with DocuPet Inc., (2025.GG22.11). Through that report, City Council approved a contract value of $680,730 net of all applicable taxes and charges for a five-year period, originally intending to run from October 17, 2025, following the conclusion of the pilot, to October 17, 2030. The contract also included the option for the City to extend the agreement for five (5) additional separate one (1) year period, resulting in a total potential contract amount of $1,537,136 net of all applicable taxes and charges.

Since City Council’s approval, and prior to finalizing the post-pilot contract, further discussions with DocuPet Inc. have resulted in proposed changes to the agreement which requires additional Council approval. While discussions were underway, a more detailed assessment of program delivery costs, including technology platform maintenance and compliance with City policies, security and privacy requirements, identified higher-than-anticipated costs for DocuPet Inc. To offset these costs, DocuPet Inc., has requested additional fees to recover costs associated with licence issuance and replacement tags. City staff are supportive of the additional costs as they are necessary for effective program delivery. Should updates to the agreement be approved, a small proportion of the current budget for pet licensing will be reallocated towards the costs paid to DocuPet Inc. Under both the previously approved and proposed contract, DocuPet would collect pet licensing revenue on behalf of the City and remit the net revenue after their fees were deducted. In addition, as a result of these discussions, the pilot was extended until August 17, 2026, to ensure there was no gap in services.

This report requests approval to amend the contract value with DocuPet Inc., clarify pet licence issuance fee descriptions, and to apply ongoing annual inflationary adjustments to existing pet licence issuance fees to offset future inflationary increases in the fees collected by DocuPet Inc. The proposed contract period would be revised to run from August 18, 2026, to October 18, 2030. The total contract value would increase to $1,756,072 net of all applicable taxes and charges over 4 years (from $680,730 over 5 years). Previously, staff estimated an annual average cost of $136,200, however, with the additional fees, that average annual value would increase to $434,592. The contract also provides the option to extend the agreement for five (5) additional separate one (1) year periods, at the sole discretion of the Executive Director, Municipal Licensing and Standards. If all the extension options are exercised, there would be a total potential contract value of $4,453,769 net of all applicable taxes and charges (from $1,537,136). The proposed amendment represents an increase to the initial contract value by $1,075,342 and by $2,916,633 net of all applicable taxes and charges if all potential extensions are exercised, to be fully recovered by licensing revenue.

The total potential contract award, including five (5) option years, is $4,453,769 net of all applicable taxes and charges and $5,032,760 including all applicable taxes and charges. The total potential cost to the City including five one-year optional periods is $4,532,156 net of Harmonized Sales Tax recoveries. In comparison to the contract value that was previously adopted by City Council, this amendment increases the initial contract value by $1,075,342 and by $2,916,633 if all potential extensions are exercised.

Should the report be adopted, the current budget for pet licensing will be partially reallocated towards the costs paid to DocuPet Inc. Any additional costs incurred by the City as part of the DocuPet Inc. contract will be fully recovered by pet licensing fee revenue and absorbed into Municipal Licensing and Standards' operational budget. To help offset future inflationary increases in the fees collected by DocuPet, staff propose subjecting existing pet licence issuance fees to annual inflationary adjustments.

The City Treasurer and Chief Financial Officer have reviewed this report and agree with the financial implications as identified in the Financial Impact section.