12.06.2011 09:13 AM

Shorter Ontario AG report

Quote a discredited Big Oil reportdemand that we make booze cheaper, with all the bad things that usually means; and, make the stunningly obvious observation that electricity costs more than it used to.

Did we get that right?

34 Comments

  1. W.B. says:

    Hey AG! Don’t you know the Ontario Government/LCBO does not want poor people to drink wine.

  2. Ed says:

    I like theStar article that whines about Ontario’s liquor prices, with the throw-away line at the bottom about how liquor is cheaper here than any other province in Canada. Its like a panic created out of thin air.

  3. Village Idiot says:

    Alcohol is far more expensive in Alberta compared to Ontario. There may be no provincial sales tax in Alberta, but the government there gets it’s money somehow through higher sin taxes and fees for services.

    Being a moderate social smoker and drinker (one pack of cigarettes per month, 1-2 beers a week), I barely notice the sin taxes. It’s my way of depriving the government money while still indulging in my vices once in a while for fun.

    • smelter rat says:

      Private resellers also take their cut. Some big box stores in Alberta may sell loss leaders, but you’re right, in general the prices there are consistently higher than they are here in Manitoba where sales of wine and spiritis are managed by the MLCC.

  4. Tim Lemieux says:

    God its aggravating to hear Premier Dad and the LCBO justify monopoly prices with the whole “social responsibility” thing. Just admit it rakes in a lot of dough for the government, and we can forget about ever buying wine at Loblaws.

    But complaining about the LCBO is like complaining about the weather. If even Harris & Hudak wouldn’t even try to dismantle it, then no one ever will.

    • The Doctor says:

      I agree the “social responsibility” thing is bogus, ie. linking that to government monopoly control. You could easily have liquor sales completely privatized, and still have a vigorous tax-funded social responsibility program. A government monopoly is not a necessary prerequisite to carrying out a social responsibility mandate.

      It’s just further proof that government and politicians can and will make any sort of bogus argument with a straight face, no matter how silly or fallacious.

    • pedro says:

      I detest the whole “social responsibility” thing as well – and I’m certainly not of the opinion that monopoly pricing is the only way to accomplish it.
      The worst part of the LCBO portion of that report is that the AG accepts the social responsibility argument, and then still points out that the people are getting a crappy deal because the LCBO could be profiting more by obtaining lower wholesale prices.
      Being “socially responsible” is not mutually exclusive with maximizing profit. The LCBO, on the other hand, must be the only monopoly in the world that manages to botch being a monopoly. While I cannot stand paying artificially inflated prices for beer, wine and spirits in the name of social responsibility, knowing that the government coffers were being filled as much as possible in the process would make me feel a little bit better about it. Knowing that more money could be made without affecting my bottom line, however, really makes me question the point of this scheme.

    • Village Idiot says:

      Of course sin taxes are a racket–the government likes to make money from them. But the advantage of sin taxes is that it makes people in general (on a macro scale) consume less of a product that is harmful if it is abused.

      What benefits to the consumer would there be if the LCBO monopoly was dismantled? Would prices really be that much lower?

      It’s an honest question, and I’m open minded enough to be persuaded about your point of view. But I should point out that when I visit Alberta, the price of beer there (sold in private liquor and beer stores) is higher compared to Ontario.

      • pedro says:

        I don’t know enough about the way alcoholic products are controlled, distributed and sold in Alberta to speculate as to why it might be that prices are higher there. I’m thinking that although private stores exist, maybe the distribution/wholesale component is organized in such a way that private retailers have to charge more to profit?
        I think we should be careful to differentiate between the sin tax component of this, and the rest of the “social responsibility” component. Private sales would NOT preclude the government making money from taxes on alcohol. Taxation could remain the same. The LCBO as a business makes its profit on the retail sale of alcohol, after tax. It is those profits that end up going to the government. This is fine by me – after all, we (collectively) are the owners of the LCBO and should (collectively) receive their profits.
        The problem lies in that no private businesses are allow to compete with the LCBO for a share of those profits. If private businesses were allowed to sell alcohol alongside the LCBO, it would force the LCBO to provide us with some incentive to shop there as opposed to somewhere else. Benefits to the consumer don’t have to come in the form of lower prices — they could be a better shopping environment, better selection, better location, better hours anything. My concerns with the LCBO’s monopoly lie more with the fact that they limit their locations, can close the majority of their stores at 9pm (even on Fridays!), and operate lower quality stores in lower income areas, because there’s no where else for people to go. At the end of the day, I tolerate even that indignity because the trade-off is that the LCBO has more profit to give to our government. Except now I find out that they aren’t even attempting to maximize their profit by pressuring the wholesalers for bulk discounts.
        As long as we don’t get the full benefit of the monopoly (enrichment of the government), why tolerate the downsides?

        Despite all of my problems with the LCBO, I find it to be a WAY more acceptable program than the Beer Store, which is a complete embarrassment. If beer sales were opened up to private store owners, I wouldn’t spend another cent ever again enriching the international parent companies of Labatt, Molson Coors, and Sleeman. In fact, I only ever shop there now when the closest LCBO is too far away or closed.

      • pedro says:

        Here’s a thought. Maybe stuff is more expensive in Alberta because they don’t have a provincial sales entity that returns the profits to the people. Consequently, the government needs to make all of their alcohol revenue from the taxes themselves, rather than the taxes + profits model that Ontario uses. So, the private retailer still has to make its profit on top of the government getting a cut, and this is what drives the price higher.

  5. steve says:

    How come no other AG in history has ever pointed out the LCBO does not use its size to get booze cheaper, I find that very interesting. The LCBO should be getting booze cheaper, I have heard that $2 to $3 a bottle is possible. If as a social policy we want higher prices fine, let those dollars go to the government not the booze brands. However on top shelf booze, the price is not an issue, so if we had better prices maybe Americans would come here to buy their cognac. I also agree the Auto Insurance need a big stick. On power, you gotta break a few eggs to make an omelet.

    • Michael Radan says:

      I don’t think the AG was advocating the LCBO SELLING booze cheaper.

      What he was advocating was the LCBO use its huge buying power to BUY booze cheaper and thereby making a larger profit. That larger profit cwould mean more money in the government’s coffers to be used for health care, education, ect.

  6. Paul says:

    The price of alcohol was technically supposed to go lower once the HST was implemented, however Premier Dad and his nanny-state commissars closed that loophole right quick. As a guy who does not drink mainstream beers I don’t even really have a problem with the LCBO monopoly (I have friends that have lived in provinces where liquor sales are privatized and they say the selection sucks compared to what we have here in ON.) The problem I have is this “social responsibility/we know what’s best for you” BS that they hide behind to justify raping us on the cost of beer and liquor.

    Insurance needs regulation in this province. It’s absurd what the industry gets away with here and I’m not just talking about auto either.

    As for electricity pricing? Yes, things go up in price. It’s called “inflation” and the current rate is 2.9% (CPI, not core) according to the Bank of Canada. I read somewhere that the rates are going to rise at something like 7.9% per year for the next five years. I’m sure we could have retired the Hydro debt and funded infrastructure replacement while keeping increases in line with, or just above inflation if not for the crooked smart meters and green energy boondoggles (which have FAILED in many other jurisdictions when the government turned off the subsidy taps, BTW)

    Oh yeah, and whose bright idea was paying other jurisdictions to take our surplus electricity? Is that person still employed at Ontario Power Generation? If so, why is that? It’s almost as idiotic as guaranteeing green energy producers 80 cents(!) per kWh for 20 years but the people of Ontario were too stupid to fire those responsible for that in the last election.

    • W the K - No, not Warren says:

      I find that anyone who thinks they’re clever using the term “commissar” to describe any political official in this country has never met one. My father grew up in the Soviet Union. One story from him about those people would be enough to curl your hair and you would never use that term again.

      • Lumipallo says:

        And “I find that anyone who thinks they’re clever using the term” ‘raping us’ “to describe” booze prices in this pprovince really needs to get educated about sexual violence. I think I pay too much for my daily 40 pounder as well. But I have never likened it to rape. A little perspective here, son, a little perspective.

      • Paul says:

        How about “appartchik” instead? From Wikipedia:

        “Members of the “apparat” were frequently transferred between different areas of responsibility, usually with little or no actual training for their new areas
        of responsibility. Thus, the term apparatchik, or “agent of the apparatus” was usually the best possible description of the person’s profession and occupation.”

        Sounds about right to me.

  7. Michael S says:

    Instead of having the breweries and distillers get that money, perhaps Premier Dad can maintain the distribution monopoly but allow corner stores to sell beer and wine, such that the net-net is the same for Government coffers but the local corner store can make a buck?

    • The Doctor says:

      Oh no, we can’t have that. People would be openly copulating on the streets, our spines would start curving, hair would grow on our palms and plagues of locusts would swarm down on us. I mean, just look at France . . .

    • pedro says:

      Yes!
      I’d rather see my money go to the guy on the corner than the international owners of Labatt’s, Molson Coors and Sleeman any day.
      The Beer Store is an amazing deal for multi-national beer companies, and the worst deal imaginable for the people of Ontario.
      Its private monopoly is at least twice as bad as the government monopoly at the LCBO. At least with the LCBO, the people eventually get some of the profits (even if no one there lifts a finger to maximize them). At the Beer Store, no one wins but the shareholders of the companies.

  8. Lord Kitchener says:

    Alcohol is too expensive in Ontario. How come the same bottle of Glenmorangie costs 50$ in Pennsylvania, Virgina, DC, when it costs 90$ here?

    Is it necessary to pay $30/hr to LCBO employees to stock shelves? (the employees that have been there for ever?

    Let me own a Scotch Boutique – I would keep prices down, maintain the selection if not improve it.

    Plus how much could we privatize the LCBO for? that could be put against the debt!

    • Justin says:

      I used to work for the LCBO, they make nowhere close to $30/hour. Not even $20/hour. Again, why does everybody get in such a tizzy when they talk about booze in Ontario. I’ve been liqour free for years and enjoy the added brain cells.

      • The Doctor says:

        You’re right. Actually, let’s bring in prohibition. I hear that was a roaring success in the USA in the 1920s.

        • Justin says:

          I’m more on the side that liqour is a luxury. I don’t really care if others enjoy alcohol, and I never said make it illegal. Learn to read.

          • The Doctor says:

            Your point seemed to be that we have no business complaining about the liquor store/sales situation in Ontario, becuase you’re a teetotaler, and why does anyone need alcohol anyway, it’s bad and kills brain cells. That naturally raises the issue of prohibition. It’s a totally fair comment.

            You know, I don’t eat junk food, so I guess that means as a matter of public policy all 7-11 stores should become monopolies with lousy hours, lousy service and exorbitant prices. That way, we’ll all be better off.

    • Mike B says:

      It would be put against debt but then we would lose an important source of revenue in the long term. The Mike Harris government wanted to sell the LCBO, yet now we know that had they done so they would have still ended up with a 5 billion dollar deficit. They don’t get paid $30 an hour by the way, but they certainly do provide 5000 well paying jobs and still turn a healthy profit that funds government programs. Why would we want to ruin that? For a slight, short-term reduction in our debt?

    • Village Idiot says:

      Well, sin taxes are obviously lower in the United States. But I’m sure that Americans have to put up with higher fees for toll roads and property taxes. And then Americans have to buy health insurance (especially with Obamacare’s new mandates). Having a First World infrastructure is not cheap, and the government has to get it’s money somehow.

      You might not like prices for booze in Ontario, but they are actually lowest compared to other provinces in Canada. And Canada’s sin taxes are pretty low compared to many European countries.

  9. Mike B says:

    As people above have already pointed out, alcohol is more expensive in Alberta where liqour is privatized. Ours is cheaper and it goes to funding government programs. I have no problem with the price I pay for booze, I don’t care that we as citizens of Ontario essentially benefit from having a publicly-funded LCBO, and frankly the fact that this topic keeps coming up is rediculous and irritating. People should focus on more important things then whether a can of beer should be 2 or 3 dollars.
    Finally, regardless of whether you think it’s hypocritical that the government constantly site the “social responsibility” aspect of the LCBO, that doesn’t change the fact that there is a direct correlation between rates of alcoholism and alcohol-related accidents and the cost of alcohol. Let’s focus our energy on imrpoving health care, education, and poverty; things that matter.

    • We have both private and government liquor shops here in B.C. The consumer gets to choose. What a concept!

    • Michael Radan says:

      So Gord, since we are asking for back up.

      Can you back up your claims that selection in Alberta is far better compared to anywhere but QC?

      Can you back upp your claims that the LCBO gets less of a rake?

    • Village Idiot says:

      I have a friend who lives in Alberta, and when he visits me in Ontario he’s always pleasantly surprised that the price of booze, beer and cigarettes are cheaper. I can also attest that when I visit him in Alberta and confirm that they pay more for these indulgences. There’s no provincial sales tax in AB, but the government can’t pay for itself.

      As for convenience, I did like the fact that there was a liquor store still open at 1:45 AM after my friend picked me up at Calgary International Airport. I paid more for the case of beer than I would have in Ontario of course. But I perceived that as a convenience fee.

      Maybe the LCBO is archaic and should be dismantled. But not even Mike Harris bothered with doing that. But if it ever happens, it doesn’t mean that prices for alcohol will be lower as a result.

  10. pedro says:

    The LCBO is the least of our problems.

    Until our government gives us somewhere to buy beer that isn’t a) The Beer Store, b) The LCBO, or c) other jurisdictions entirely, we’re all just pissing our beer money away to the Labatt, Molson-Coors, Sleeman consortium that we allow to steal our money.
    The profit on every beer sold at the LCBO goes to Ontarians. The profit on every beer sold at the Beer Store goes to a private entity that’s been granted near-monopoly status on the strength of a “social responsibility” type argument. The world is hardly crumbling where beer sales are allowed in corner stores; we should declare the argument invalid and open up beer sales to competition. Then we’ll see how many people still prefer shopping at the Beer Store, with their crappy selection, indifferent staff, inability to keep their board updated with what is actually in stock, and slow service.

    I would rather that the LCBO be a complete monopoly than allow the Beer Store to keep their operating advantage. And best of all would be to open up the sector to public and private interests alike, and have everyone compete for our business.

  11. Marc L says:

    The assumption in some of the posts above about the LCBO’s pricing versus an Alberta-type private-sector model is that the former is better because it allows profits to go to government to “fund social programs”. This is a very weak — even dangerous — argument. On that basis, why not just nationalize everything, from grocery chains to car companies and channel the profits to “fund social programs”? The fundamental question is whether there is any social benefit to having governments in the business of selling alcohol in 2011. There are reasons to have governments in some areas, such as the provision of health care, education etc. But alcohol??? I don’t think so. Even the “social responsibility” argument if taken seriously would lead to governments selling tobacco, running bars, etc. etc. If there is no rationale for the government being there, it should no be there. Period. Governments have no valid reason to be in the retail alcohol business.

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