Who to blame for Ontario’s goofy beer mess

Beer drinkers, Premier Doug Ford is not your new best buddy. His move to decrease the price of a hypothetical bottle of beer by 25 cents is a gimmick that just helps underline what a goofy mess beer retailing is in Ontario.

In the civilized world, beer is something one can buy in privately owned corner stores, grocery stores and liquor stores. Manufacturers suggest prices, but retailers can charge what they like. It’s almost as if beer were just another beverage.

In Ontario, beer retailing is 100 per cent controlled by government. Our political beer bosses make all the rules, control pricing and packaging, run a retail outfit, rake in $589 million a year in beer and alcohol taxes, and even publish a glossy booze magazine. The Beer Store and select grocery stores are also allowed to sell beer, but only because they have kissed the ring of the premier of the day.

It’s a setup that would make a crime boss envious, and it’s all accomplished without anyone in government risking a penny of their own money or doing any actual work.

So now Doug Ford, our latest emperor of beer, has thrown out a challenge to breweries. He would like them to sell their product for a loss so he can tell Ontarians he lowered the price of beer. Oh, and he wants them to do it by Labour Day, and the beer has to be in bottles, not the cans Ontario craft brewers and consumers favour.

In his good-news announcement in Picton Tuesday, Ford said, “We’re bringing back a buck-a-beer to Ontario. Once upon a time you could buy a beer for $1 a bottle. Consumers loved it, participating breweries loved it. It was a win-win.”

The key words are “once upon a time.” A lot of things were cheaper a decade ago, but that doesn’t mean they can be produced at the same price today, just because government wants it. What’s next, penny candy?

Then Ford urged brewers to “Give the taxpayers a break and let them have 24 cans of beer for 24 bucks.”

Unfortunately, brewers can’t give taxpayers a break. That would be Ford’s job, but of course he’s not going to reduce the taxes on beer.

Beer is expensive in Canada for two reasons: high taxes and lack of retail competition. Ford’s move to lower the price a brewery could charge for a bottle of beer does nothing to attack either.

The taxes on beer in Canada are astounding. A study released this year by the industry association Beer Canada found the average combined federal and provincial tax on 24 cans is $20.31, 47 per cent of the total price. About threequarters of that is provincial tax. In Canada, beer is already a buck, but the tax nearly doubles the price.

By comparison, the same 24 cans of beer sold in the U.S. bears an average tax of $4.12 in Canadian funds.

In Ontario, we just don’t believe in beer retail competition. The Beer Store, the LCBO and grocery stores all sell for the same price. It’s a different picture in Quebec, where there is privatesector price competition. In Ontario, you have to pay $27.50 to buy 12 cans of Bud Light. In Quebec, the same beer is $16.99 at corner stores. The best deal in Quebec is at Costco, where you can buy 60 cans for just over $1 a beer.

Ford has talked about breaking up the beer-retail cartel in Ontario by allowing beer sales in corner stores. If it brought price competition, that would be great, but it’s highly unlikely to happen because of a terrible deal made by the Liberal government in 2015.

That was the moment when the government could have opened beer retailing to real competition, but then-premier Kathleen Wynne said no. Instead, she granted The Beer Store another 10 years of nearmonopoly on beer sales. In exchange, The Beer Store agreed to Wynne’s plan to sell six-packs in grocery stores, but only at Beer Store prices and during Beer Store hours.

This new deal for beer replaced an arrangement the government could have cancelled with six months’ notice.

It’s difficult to think of a rational reason why the Ontario government would give such marketing power to a retailer controlled by foreign-owned brewers. Maybe it’s the big brewers’ enthusiastic support for democracy. Over a decade, The Beer Store’s corporate owners donated $1.1 million to Ontario politicians, most of that to the Liberals.

Perhaps a few breweries will sell their beer for $1 for a few weeks for the free promotion the LCBO is offering, but it will never be a regular thing. In this taxthirsty province, it’s not the way we roll.

Randall Denley is an Ottawa political commentator and former Ontario PC candidate. Contact him at randalldenley1@gmail.com

Doug Ford