Consultant Russ Christianson, OPSEU president Warren
(Smokey) Thomas, and Liquor Board Employees Division chair
Denise Davis present before the Standing Committee on
Government Agencies in Trenton, Ontario on June 27, 2012.
TRENTON – At a time when the Ontario
government insists that dwindling revenues have forced it to
adopt austerity measures, an all-party legislative committee
has been told that the LCBO could dramatically increase its
dividend to the provincial treasury by repatriating
privately-owned and operated agency stores.
Members of the legislative committee on
government agencies learned today that Ontario could stand
to gain more than $350 million over the next 10 years if the
LCBO repatriated the most profitable agency stores when
their contracts with the Crown agency expire.
“The numbers are staggering,” Ontario Public
Service Employees Union president Warren (Smokey) Thomas
told members of the committee meeting in Trenton. “From 2003
to 2007 alone, the LCBO permitted close to $1 billion in
retail alcohol sales to be sold through private agency
“This is nothing more that privatization
through the back door. And successive Conservative and
Liberal governments have gone along by giving this public
money to private businesses.
Under terms of their contract with the LCBO,
private owners of agency stores are paid a commission of 10
per cent on gross sales.
In its original mandate set in 1962 LCBO
agency stores were designated for rural and remote
communities in northern Ontario where opening an LCBO retail
outlet was not feasible. The number of agency stores in this
part of Ontario has remained constant over the years at
about 80 locations.
Since 1996 and the failed effort by the
Harris government to privatize the LCBO, however, the number
of agency stores has rapidly expanded especially in southern
Ontario where there are now more than 140 outlets, many
bordering on large urban centres and in close proximity to
existing government operated LCBO stores.
In a detailed financial analysis of agency
stores presented to the legislative committee, figures show
that the top 100 private outlets in southern Ontario each
earn revenues of more than $700,000 annually, an amount that
would easily qualify for opening a ‘real’ LCBO store
featuring wide product selection, trained and professional
staff and a commitment to promote social responsibility.
In 2009 these 100 privately
owned-and-operated stores had combined sales of $161
million. If the LCBO brought these retail sales back to
their own stand-alone outlets Ontario could benefit from an
additional LCBO cash dividend of $340 to $370 million in the
next decade, Thomas told the committee.
OPSEU, which represents more than 6,000
liquor board employees, has shared its financial findings on
agency stores to the LCBO and they have not been challenged.
The fiscal data used in the financial analysis comes from
the LCBO’s own numbers.
“We hear a lot these days about austerity
and about how our provincial government insists revenue
streams have dried up,” said Thomas. “If this is true how is
it that the Ontario government finds itself giving away
millions of dollars in potential revenues instead of keeping
it to pay for health care, education and other public