LCBO strike shows why we don’t need government liquor stores

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Unionized liquor retailers say they are striking to save their jobs. Instead, they could lose them. The world has changed for the liquor trade in Ontario and the LCBO, and the striking workers don’t seem to understand that.

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“Tonight marks the start of Ford’s dry summer,” said Colleen MacLeod, chair of the union’s negotiating team, on Thursday before the strike.

MacLeod said if Ontario residents can’t get the alcohol they want this summer, it’s because of Premier Doug Ford. In fact, despite the strike, the province’s residents will largely still get the drinks they want because of several actions Ford has taken in recent years.

Since the height of the pandemic, any restaurant or bar that sells alcohol has been able to sell alcohol to-go, meaning any restaurant or bar in the province can function as a de facto liquor store.

While these outlets are in most cases charging higher prices, there are probably also some enterprising operators who are taking advantage of the strike to sell alcohol at reasonable prices in their establishments.

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There are also craft distilleries, breweries and wineries throughout the province that can sell their products from their own production facilities. The province will even promote locations where residents can purchase alcohol, from The Beer Store to local Wine Rack locations and local producers to pop-up bottle shops.

This will not be the dry summer the union promised.

Oh, and in less than a month, expanded sales in grocery and convenience stores will begin.

Does the union realize that it is not fighting a losing battle, but a battle the province has already won? Does it not realize that its actions are proof of why a unionized state liquor monopoly is a bad idea?

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The state can earn money even without state business

The union relied heavily on the idea that alcohol sales at the LCBO funded health care and education, and that without alcohol sales in LCBO stores, funding for these services would be lost.

“The proceeds from these sales should stay with the LCBO and not help billionaires buy another yacht,” said JP Hornick, president of the Ontario Public Service Employees Union.

It is true that the LCBO sends $2.5 billion to the province each year and that this money does indeed help fund services. However, when we look at other provinces, we see that the government can still make money from alcohol sales even if it does not control all aspects of the sale, storage and wholesale distribution of the product.

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Quebec has a hybrid model for alcohol sales, with beer and wine widely available in private stores while also operating the SAQ, the government-owned liquor store chain. Alberta has a fully private model for retail and has done so for more than 30 years.

Both Quebec and Alberta collect significantly more alcohol per capita through taxes and duties than Ontario does through the LCBO. And prices are often lower in these provinces than in Ontario.

If a state alcohol monopoly neither leads to lower prices for consumers nor to higher government revenues, what is the point?

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With this strike, LCBO workers who believe they are protecting their jobs are laying the groundwork for their elimination.

Alberta began opening a fully private liquor retail business in 1993 and isn’t looking back. Saskatchewan closed its last government-run liquor store in 2023, and customers are now better served than under the old system.

The Ford government never sought to abolish the LCBO, it just wasn’t on their agenda. This strike and the inconvenience to consumers and the bar and restaurant industry will bring this issue to the table.

As the government begins its planned review of laws, regulations, taxes and wholesale prices, it may add another point to the discussion: privatization.

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