QUEBEC’S LIQUOR MONOPOLY
Quebec’s liquor commission has enjoyed a monopoly in this province for nearly a century. Since the time of prohibition, in 1921, the provincial government has been the sole buyer and seller of the vast majority of alcoholic products in Quebec, and large profit margins have made it extremely reticent to give up that privilege. But change might be on the horizon.
The Ongoing Program Review Committee, which has been tasked with finding ways to improve the efficiency of public spending, added its voice this week to the chorus of those calling for partial privatization of alcohol sales, recommending that the government force the Société des alcools du Québec to compete directly with the private sector. While some types of wine and beer can be sold outside SAQ outlets, there are strict rules in place that limit the products available in grocery stores and dépanneurs. The SAQ maintains a total monopoly on sales of hard liquor.
Proponents of partial privatization argue that it would improve service and selection while driving down prices for consumers. The review committee noted that administrative costs at the SAQ are still high compared to those in other provinces, arguing that the Crown corporation isn’t as economically efficient as it could be. Exposing it to true competition could certainly encourage better performance, and Treasury Board President Martin Coiteux seems open to the idea. According to a poll conducted last year, 42 per cent of Quebecers would support such an initiative.
One main counter-argument is that the
Quebec’s review committee has created an opportunity for discussion. This is not a bad thing …
SAQ is an important source of public revenue. However, Quebec could do just as well by taxing products sold by private companies in a competitive environment.
There are other considerations that give pause, however. Quebec is not the first province to float the idea of ending a liquor board monopoly. British Columbia (partly privatized) and Alberta (fully privatized) moved ahead years ago, with mixed results.
The number of private liquor stores multiplied quickly in these jurisdictions as government monopolies were broken, bringing new jobs and increasing sales. Alberta, in particular, now boasts a much greater selection of products than what is seen in provinces where liquor boards still hold all the cards. Still, there is evidence that private liquor stores in Western Canada, rather than delivering on the lower prices consumers were promised, actually charge more than publicly owned stores.
Meanwhile, the social repercussions of privatization have been well-documented in countries around the world, as well as in the Canadian context. As pointed out by Mothers Against Drunk Driving, privatization typically results in greatly increased access to alcohol, which in turn encourages greater consumption. Between 1995 and 2003, the number of liquor stores in Calgary increased tenfold, and police reports documented a rise in impaired driving charges and family violence cases in areas of the city with the highest density of stores. In B.C., the government found “serious compliance problems” when it came to barring the sale of alcohol to minors in private stores.
With its report this week, Quebec’s review committee has created an opportunity for discussion. This is not a bad thing, as there are undoubtedly issues with the current model. But the arguments for changing the current system may not be as strong as they might seem at first glance.