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Analysis

Doug Ford’s Alcohol Privatization Plan Will Cost Ontario Taxpayers Hundreds of Millions of Dollars. Now It’s Forcing LCBO Workers To Go On Strike.

LCBO workers accuse Ford of working with billionaires and big business to siphon profits from healthcare, education and public services

Unionized workers at the Liquor Control Board of Ontario are now on strike for the first time in history in response to Doug Ford’s plan to fast-track the privatization of alcohol sales in Ontario.

LCBO workers say the changes being rushed through by Ford’s Ontario PC government will redirect hundreds of millions of dollars in revenue away from public coffers to big businesses owned by billionaires like Loblaws or foreign multinational box stores like Wal-Mart.

In addition to costing Ontario taxpayers hundreds of millions of dollars in lost revenue currently spent on healthcare, education and public services, LCBO workers warn that privatizing the alcohol sales will create a scenario likely to lead to mass layoffs and the shutdown of LCBO locations across the province.

Here’s what you need to know:

In December 2023, Ford’s government announced plans to privatize the sale of alcohol in Ontario within two years, suggesting that by January 1, 2026, “grocery and big box stores” would be authorized to sell most alcohol products, other than hard liquor.

But on May 24, 2024, the Ford government issued a press release, suddenly announcing it would be rolling out its plan to privatize alcohol sales “earlier than planned”:

“Starting in August, consumers will be able to purchase new products like coolers and other ready-to-drink beverages alongside more pack sizes at grocery stores that currently sell wine or beer, followed by new retailers being able to sell an increased selection of local, domestic and international alcohol products in a safe and responsible manner. By the end of October 2024, every convenience, grocery and big-box store in Ontario will be able to sell beer, cider, wine and ready-to-drink alcoholic beverages if they choose to do so.”

The LCBO operates over 685 retail stores and employs 10,000 workers. According to the LCBO, the public crown corporation generates $2.58 billion in profit each year which goes directly back to the Government of Ontario and helps pay for healthcare, education and public services.

Ford’s government is currently projecting a deficit of $9.8 billion this year, meaning that deficit would grow significantly without the $2.5 billion generated by the LCBO – unless Ford’s government raised taxes or cut public services to make up the difference.

According to the LCBO’s confidential corporate documents obtained by CBC News, the public crown corporation is projecting that it will lose $600 million to $915 million in annual retail sales as a direct result of Ford’s plan to privatize alcohol sales and an additional $400 million in lost tax revenue.

The documents indicate the LCBO hopes to recoup costs by restructuring itself as a wholesaler, but even that approach, if it works, is projected to result in a loss of $150 million per year.

All factors considered, CBC News says the result of the various changes Ford’s government is planning will likely “cost Ontario taxpayers at least $225 million” per year.

Photo: Luke LeBrun (PressProgress)

What the union is saying:

LCBO workers are represented by the Ontario Public Service Employees Union, whose members have never gone on strike before – even under Mike Harris’ conservative government.

OPSEU says the real issue is that Ford’s government is siphoning hundreds of millions of dollars in revenue away from a public crown corporation to big businesses.

“Premier Ford is trying to sell us a bad deal, one that hands over more of the alcohol market to big grocers and convenience chains like Loblaws and Circle K,” Colleen MacLeod, chair of OPSEU’s LCBO division said at a press conference this week.

OPSEU says its core demands include opening more LCBO retail stores, including more convenient LCBO Express locations, keeping LCBO stores open later, and expanding LCBO’s warehousing, logistics and e-commerce capacity for bulk purchase and home deliveries.

“We envision a future where the LCBO grows with Ontario,” OPSEU President JP Hornick said in a statement this week. “We could improve convenience by expanding public LCBO retail locations and hours. That would not only grow the LCBO’s revenues that pay for our healthcare and education, but also create good jobs in communities across our province.”

Photo: Luke LeBrun (PressProgress)

What labour experts are saying:

Labour experts agree the strike was provoked by the Ford government’s decision to privatize alcohol sales in Ontario.

“The union is using the collective bargaining process to resist the privatization of the LCBO,” Brock University labour studies professor Larry Savage told PressProgress. “There’s no question that the privatization of alcohol sales in Ontario will lead to the eventual closure of LCBO locations.”

“That’s the government’s game plan: sell our public assets and shift billions in revenue over to big box stores that are already amassing record profits.”

Steven Tufts, a labour geography professor at York University, has also described the move to privatize alcohol sales as a “union avoidance strategy” to “erode good jobs in the alcohol retail sector.”

“This strike is a deferred action,” Tufts told PressProgress. “It is the inevitable consequence of decades of casualization of LCBO work (now 70% of workers) and privatization of retail distribution which will not expand with 8,5000 corner stores selling booze.”

Savage also underlines the problem posed by widespread casual work at the LCBO.

“Roughly 70% of the LCBO workforce is casual,” Savage noted. “The vast majority of have no benefits or guarantee of hours. Given the cost-of-living crisis, workers need higher wages and greater employment security.”

Tufts says OPSEU is looking to secure the “working conditions for workers that remain with the LCBO by rolling back casualization” and “driving up the costs of closing stores through demands for increased severance” for when the LCBO begins shutting down locations and laying off workers.

Tufts also notes that OPSEU’s proposals on “expanding distribution and modernizing the LCBO” by opening more locations and new formats such as LCBO express locations are a noteworthy counterpoint to Ford’s “cheap beer everywhere at anytime populism.”

Photo: Luke LeBrun (PressProgress)

What Doug Ford’s government is saying:

The government claims its plan to privatize alcohol retail sales is really about “delivering choice and convenience” to shoppers.

“There’s no reason why Ontario consumers shouldn’t enjoy the same convenient shopping experience as Canadians in every other province when buying some wine for their holiday party or a case of beer or seltzers on their way to the cottage,” Doug Ford was quoted in the press release announcing the plan.

However, the government also acknowledges it’s plan is also about creating a “more open marketplace” for selling alcohol, and acknowledges it’s “working” with “industry partners” to that end.

Those industry partners include big business lobby groups like the Retail Council of Canada, whose members include Loblaws, Metro, Sobeys, Wal-Mart and Costco, as well as the Convenience Industry Council of Canada, whose members include Loblaws, Circle K and several oil and gas companies that operate convenience stores – all of whom stand to generate significant profits as a result of Ford’s plan to privatization alcohol sales.

“Clearly the government has not only been listening to what Ontarians want, but they have listened to what independent grocers and smaller businesses need,” one grocery industry lobby group noted.

An empty LCBO retail store on July 5, 2024; Photo: Luke LeBrun (PressProgress)

 

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Luke LeBrun
Editor
Luke LeBrun is the Editor of PressProgress. His reporting focuses on the federal political scene, right-wing politics as well as issues in technology, media and culture.

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