Tories, NDP warn of LCBO ‘fire sale’
Liberals ‘insincere’ in vow to keep it a public asset, says Conservative leader
As Premier Kathleen Wynne’s privatization czar prepares recommendations on revamping the LCBO, there are fears the provincial booze monopoly could join Hydro One on the auction block.
The Liquor Control Board of Ontario on Friday announced a recordbreaking $5.2 billion in sales over the past year, a 4.3-per-cent jump from 2013-14, which resulted in a $1.8-billion “dividend” to the provincial government.
Economic Development Minister Brad Duguid said the public liquor giant is performing well, but suggested no one should be resting on any laurels.
“Well, we would expect that they should be. That is the expectation we should have for all of our government agencies and that is an expectation that I think that the public should have as well,” said Duguid. His comments came as former TD Bank CEO Ed Clark is working on his next phase of finding ways to better monetize public assets.
Wynne’s government is following Clark’s advice by selling off 60 per cent of the provincially owned Hydro One transmission utility and allowing the sale of beer in 450 of Ontario’s 1,500 grocery stores.
Before the end of the summer, Clark will report back on how to get wine on Ontario supermarket shelves and modernize the LCBO with expanded online sales and specialty boutiques.
“The work that Mr. Clark has done (is) making sure that the public is getting the full benefit for every asset that this government has,” said Duguid.
“He has looked at some specific assets as you know and made some very bold recommendations. This government has moved forward with those bold recommendations,” he said, referring to Hydro One, which will net $4 billion toward the province’s $31.5-billion transit infrastructure plan.
“We owe it to our taxpayers, we owe it to Ontarians, to make sure that they are getting the best return that they can get from these public assets.”
While Clark has ruled out selling the LCBO — and, more importantly, so has Wynne — Progressive Conservative Leader Patrick Brown warned the Liberals are “insincere.”
“You never know what you can expect from this Liberal government. They have a spending problem so I would not be surprised if they look at other government assets . . . other fire sales,” said Brown, whose party opposes the Hydro One deal.
“We should be worried. It’s inconsistent with what they said in the last election campaign. They never said there were going to have to do a fire sale on Crown assets to enable their spending,” he said.
Indeed, NDP Leader Andrea Horwath pointed out that Clark last fall specifically ruled out selling all of Hydro One — instead urging just the sale of its distribution subsidiaries — but was overruled by Wynne.
“They’ve done the wrong thing with Hydro One . . . let’s hope they’re not going to do the same thing with the LCBO. It would absolutely be another very bad decision,” said Horwath, who will be crusading against the Hydro One liquidation across Ontario this summer.
“It’s so shameful that Hydro One is being sold off because that’s also a very reliable revenue stream,” she said.
The LCBO’s banner year included an increase in beer sales of 5.7 per cent, with wine up 4 per cent, and spirits 2.4 per cent.
Ontario craft beer sales jumped 35.9 per cent over the previous year, while the smaller local cider market skyrocketed 93 per cent and the cottage-industry spirits sector enjoyed 53 per cent growth.
It was the twentieth straight year of posting record sales and the $1.8-billion “dividend” to the treasury does not include booze taxes. LCBO president and CEO Bob Peter said the company is doing well.
“At a time when Ontario’s economy is growing modestly, (the) LCBO delivered these landmark results . . . by effectively managing expenses and, above all, focusing on delivering excellent customer service,” said Peter, indicating the monopoly was bracing for competition from grocery stores on beer sales.
“I have every confidence our ongoing commitment to continuous improvement — especially when it comes to the customer shopping experience — will enable us to build on this success in an expanded and more competitive marketplace.”