Sunday, December 9, 2012

Privatize liquor sales and gambling a Tory bait and switch?

Tim Hudak, the leader of the Ontario Progressive Conservatives, suggests we take a look at privatizing liquor sales and gambling in Ontario. So, is this just another political bait and switch scheme or does he really intend to follow through and incorporate this into a future Tory election platform?

Readers, if you’re waiting for privatization, don’t hold your breath.

The last time a PC government sold off a key government asset was the sale of Highway 407, which was sold in 1999 in what I’d categorize as more of a give-away—I bet my 15-year-old granddaughter could have cut a better deal.

Furthermore, we’ve had other politicians promise privatisation of our “sin” industries, but never carried through with the measure. It seems to me, also, that Tim Hudak has been opposed to privatizing the LCBO in the past. And remember that the Dalton McGuinty Liberals ran against privatization in the 2003 and 2007 elections, yet reversed themselves and were ready to do just that in 2010, before changing their minds once more.

The way I see it, offering to privatize liquor sales and gambling is one of those bright shiny objects politicians hold up to catch the attention of the media and grab some space in the day’s headlines. It’s one of those cynical games politicians never seem to tire of playing.

Mind you, I believe it would be a good thing to privatize liquor sales and gambling. For one thing, governments should never be engaged in commerce, especially in mature industries where there is every expectation that private operators could do as good or better job. Moreover, the so-called “sin industries” are the very last ones in which I want my government involved, let alone monopolizing.

The LCBO and our “gaming” corporation exist primarily as feather beds for public-sector and other union workers and little more. Just another way to help keep the labour unions on-side for the next election campaign.

Income received from these government agencies could just as well be approximated from taxes on privately operated, government regulated enterprises.

The fact that the Ontario Lottery and Gaming Corp. (OLG) is government owned did not stop corrupt practices, nor should we have expected that it would.

Both the OLG and the current Grit government understand the private sector can do a better job. Recently Finance Minister Dwight Duncan was quoted as saying that the Liberal government is “already privatizing the OLG”. And OLG spokesman Tony Bitonti said recently:

OLG is expanding the engagement of the private sector to build and run day-to-day operations of existing and new sites, as well as develop new technology and games for lottery terminals.”

I say get out of gambling and booze altogether. And not because of ideology or money but because of principle—it is, after all, the right thing to do. Remember, monopolies are the enemies of private enterprise and consumers, no matter who owns them.

By the way, Alberta successfully privatized liquor retailing, warehousing and distribution in 1993. Here’s a current quote from an Alberta government Web site:

…private liquor retailing has been remarkably well received by consumers and everyone involved in the liquor industry and continues to meet the original objectives set out by the government.”

Those who claim the LCBO being in government hands, of itself, helps prevent alcohol abuse or use by minors are misguided or are being disingenuous. Spend a Friday or Saturday evening in any urban centre in Ontario without wilful blindness, and that myth will soon be dispelled.

Privatize, regulate and tax, that’s the ticket.



  1. So, you feel Hudak should not put anything out there he will not do. How about just getting elected as a first? Do you not think we might be better off with Hudak than the crooks we now have or the NDP?

  2. I see no Issue…..after all we have legal abortion, gay marriage and safe injection sites. I suspect that marijuana will be the next thing legal.

    1. Anon, what in the world do legal abortion, gay marriage and safe injection sites have to do with privatizing liquor sales and gambling? I don't see the connection.

    2. They do in the sense historically the temperance movement who favoured the rigid system of selling alcohol where mostly religious conservatives who also favour traditional family values and tough drug laws. Its only the last 30 years that things have flipped where it is the left due to their pro-union and preference for government over private ownership, that it has been the left who wants to maintain the system and the right who wants to ditch it. Lets remember in 1985, it was David Peterson who ran on selling alcohol in corner stores, while the PCs along with the NDP opposed it.

  3. If you look at Hudak's original statement, he was proposing some experimentation with the rigid LCBO model, which would include increased role for private retailers. Interestingly Liberal hopefuls Pupatello and Murray agree with some of these ideas.
    One clear proposal Hudak did make was an end to The Beer Store near monopoly on sales. Since the company already is private and foreign controlled at that. few arguments against a bit of competition can be leveled. In many smaller stores the retail model is a throwback to the 1930s: a wall seperating the beer from the customer, one harassed clerk taking the order, walking to the back and delivering it. The microphone beside her, so useful in the 1960s is disconnected, and there is no one at the back anyway. In between she has to administer the bottle return program hoisted on it by McGuinty. Clearly, The Beer Store has used none of its profits to modernize stores, or to hire more staff. What other similar retail model exists anywhere?

    I think Hudak's mistake was partly backing away from his proposal 2 days later; this made him look uncertain.

    1. "backing away from his proposal 2 days later", eh Martin? Well no guts, no glory. Bold men/women with vision are pretty hard to come by these days.

  4. I support privatization of the LCBO but I am a bit skeptical. That being said maybe his hope is to do something in between like have a hybrid system like British Columbia has, or allow beer and wine to be sold in corner stores like Quebec does while keeping the LCBO for spirits and more exotic wines and beers. That being said, Alberta did it so it can be done, the real problem is unions are a lot more powerful in Ontario and there isn't the negative public perception of them like there is in the US or Alberta thus it would cost him a fair amount of political capital and he may want to spend it on other issues. On the other hand if done early in his mandate, whatever negative reaction there was would likely be gone by the next election. Also if there was a time to privatize the LCBO it was in the 80s when they closed at 6:00 and on Sundays, were ugly places with limited selection and unhelpful staff. The modernization under Andy Brandt essentially made it a lot more difficult to privatize. I think in provinces like the Atlantic ones, Saskatchewan, or Manitoba you might get less resistance since they don't operate nearly as well as the LCBO and have a much smaller selection. Still I hope it is done. If done here, you probably see other provinces follow with perhaps except Quebec (they are more socialistic and you can already buy beer and wine and grocery stores and depanneurs) and British Columbia where you already have private liquor stores.

  5. I should add another big problem is the unions are great at fearmongering and no one seems willing to stand up and call them on therrors, thus many do believe privatization would lead to many of the dire predictions the unions claim. Instead of using ideology, but rather just facts, someone needs to lay out a strong case of how privatization would improve things and all the negative consequences have not materialized in other jurisdictions that have private sales