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Will an LCBO Strike Spark a Private Party?

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The looming LCBO strike threat has suddenly gotten all sorts of Ontarians anxious about a potentially dry next few days (or weeks). LCBO workers, who are represented by the Ontario Public Service Employees Union (OPSEU), voted 95 per cent in favour of striking, and the deadline is approaching.

The Liquor Control Board of Ontario is the arm's length agency of the provincial government which has the statutory authority under the Liquor Control Act to control the sale, transportation, and delivery of liquor, as well as fixing the prices at which they are to be sold.

Certainly the stakes are high on both sides. In all likelihood, it seems highly doubtful that the strike will go through. Yet a strike is in no one's best interests. The LCBO management stands to lose lucrative revenue to a shuttering of stores, but workers may also suffer in the long run should a strike vote pass. Both parties should be prepared to afford each other leeway and reach an appropriate conclusion.

Tim Hudak released a white paper in 2012 which called for "increased choice and competition in alcohol retailing." Kelly McParland in the National Post argued in December that if voters really wanted a privatized LCBO, the change would already have been implemented. Premier David Peterson (Liberal) and Mike Harris (PC) both promised privatization but ultimately never followed through on the promise. Premier Kathleen Wynne, discussing the potential strike, argued that it would not be necessary to revisit the way alcohol is sold and noted that the LCBO "functions very well."

Now, this entire scenario would change if the availability of alcohol were to be completely diminished. This inconvenience may cause citizens to want an alternative to the LCBO in the event it is rendered incapable by a strike. Already, recent mentions in major media outlets are noting increased calls for some form of privatization.

If privatization were to pass and LCBO revenues were to decrease, the next contracts for the workers will likely be a lot stingier. The LCBO currently provides a $1.63 billion dividend to the Ontario government and had total sales of $4.7 billion in 2011-2012.

There will not be a complete lack of availability of alcohol, however, if a strike action occurs. The Beer Store and a number of breweries and wineries will be open for business. Additionally, LCBO agency stores, which are independent retailers authorized to sell alcohol, are not staffed by OPSEU-unionized workers, and will also be open.

Remember Don Drummond, the TD Bank chief economist whose 2012 report called for massive cutbacks in government spending, including in education and health care spending? He also made suggestions on improving the LCBO's returns. Far from downscaling or privatizing the LCBO, the Drummond report recommended that the LCBO be directed to improve its markup structure for setting retail prices and to more aggressively pursue store expansion.

The government likely will not intervene as it did during the dispute with teachers, when it passed Bill 115 to impose contracts on teachers (and later repealed the legislation). This bill contained in its preamble a reference to the "public interest" and the need to "protect the gains made in the education system." The distribution of liquor, by contrast, is certainly more of an individualistic want than a societal need.

These factors should all be taken into account during these crucial moments before the deadline is reached.

Originally published in The Prince Arthur Herald.

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