Privatizing LCBO Could Save Ontario $559 Million Annually: Time for Reform Amid Potential Strike

The Consumer Choice Center (CCC), an organization representing consumers in over 100 countries and monitoring regulatory trends in key locations such as Ottawa, Washington, Brussels, and Geneva, has stirred the pot in Ontario’s alcohol industry. The Toronto-based CCC office has recently issued a compelling release suggesting that dismantling the Liquor Control Board of Ontario (LCBO) could save the province a staggering $559 million annually.

As the LCBO faces potential upheaval with its workers setting a strike deadline for early July, the conversation around reform has intensified. David Clement, a Toronto-based representative of the CCC, underscored the urgency of reevaluating the LCBO’s operations. “A potential LCBO strike would be a huge problem for alcohol consumers in Ontario, but the impact is only this severe because of Ontario’s prohibition-era system for alcohol retail and wholesale. The looming strike is just another glaring example of why now is the time for reform,” Clement stated.

The financial implications of maintaining the LCBO in its current state are significant. Clement explained, “Looking at operating costs for the LCBO, and comparing that to private retailers in other provinces like Alberta, shows that if the province were to privatize the LCBO, taxpayers would save $559 million per year. Not only would shifting to a private model give consumers more choice, but it would also significantly improve the province’s finances. It’s a win-win for consumers and taxpayers across the province.”

Beyond financial savings, the call for privatization also aims to enhance consumer experience and choice. Adopting a model similar to Alberta’s private retail system could modernize Ontario’s alcohol distribution and retail, offering more variety and convenience to consumers. For more information, visit consumerchoicecenter.org.

Meanwhile, bars and restaurants in Ontario are bracing for the potential fallout of an LCBO strike set for July. Industry leaders warn that such action could severely affect the delivery of wine and spirits to establishments still struggling to recover from the pandemic. Tony Elenis, President and CEO of the Ontario Restaurant Hotel and Motel Association, emphasized the precarious situation many businesses could face. “Our core product still is at the LCBO and it is critical that this strike doesn’t go through [and that] there is a contingency to be able to distribute to licensees,” Elenis stated.

Unionized LCBO workers are less than three weeks away from a potential strike, pending the outcome of mediator-led negotiations between the union and the LCBO. On Tuesday, the Ontario Public Service Employees Union (OPSEU) announced it had received a no-board report from the Ministry of Labour, indicating stalled negotiations. This report triggers a 17-day countdown, positioning the union for a legal strike by July 5 if no agreement is reached.

An LCBO spokesperson declined to comment on potential impacts to its delivery network or any contingency plans. “Should a strike occur, LCBO has measures in place to ensure continued customer service,” the spokesperson told Global News. The union acknowledged that a strike would “undoubtedly cause disruption,” but the full extent of the impact remains uncertain.

Elenis noted that while some beverages could be sourced through other channels, the LCBO remains the primary source of liquor and a major supplier of wine. Local wineries, The Beer Store, and individual breweries could still provide some supply to restaurants.

Negotiations between OPSEU and the LCBO are set to continue, with additional dates scheduled for next week. However, a significant point of contention is the Ford government’s impending liberalization of alcohol sales in Ontario, slated to begin in August. This change will allow convenience and grocery stores to sell wine, beer, and pre-mixed drinks, a move OPSEU fears will lead to job losses at the LCBO.

“We’re looking to ensure our job security language is strong; we’re also looking for an alternate model for alcohol sales in the province… and it doesn’t include having alcohol everywhere,” stated Colleen MacLeod, leader of OPSEU’s liquor board employees local, on Tuesday.

A strike disrupting the alcohol supply chain could further harm restaurants still recovering from the pandemic. “Alcohol is very critical to our restaurant [industry’s] success,” Elenis explained. “Restaurants continue to recover from COVID-19, believe it or not, and many of them are continually struggling. So we need the LCBO to stay open and supply us with booze. It is very, very important.”

Header image: via City News