Queen's Park: LCBO waste enough to drive you to drink

As we shake off the post-festive fog and get back to business this week, the fight for the premier of Ontario’s office ramps up in earnest.

Politically, we’re adrift in a strange new world with a prorogued legislature, a lame duck premier, and seven candidates to replace him. Of course, there are nine aspirants if you include Conservative Leader Tim Hudak and NDP Leader Andrea Horwath.

The leadership convention takes place Jan. 25-27 at Maple Leaf Gardens, which is somewhat ironic when you consider the fact that there hasn’t been a winning team out of there since 1967. The winner of that beauty contest will become premier, although if it’s one of the candidates who don’t currently hold a seat in the house, there will be another delay of at least six weeks in order to hold a byelection.

When the new leader assumes the job in the legislature, it’s anyone’s guess as to what will happen. If the Liberals shift to the left by aligning with the NDP and settling with the unions, the spring budget will be a tax-and-spend doozy. Alternatively, we could be heading for another general election. We just don’t know.

Meanwhile, the curious leadership of Premier Dalton McGuinty continues. Mindful that his successor will likely face voters sooner rather than later, the premier-in-exit has placed a couple of pre-election goodies on the table. One was to find $10 million in the face of the Connecticut massacre to restore a program to install security cameras and remote locks in schools. The other involves a nod to the long-standing demand for more places to buy liquor, beer, and wine.

The latter move is more interesting since it’s a hot-button issue for voters and a critical fiscal component of the budget.

The proposal is vague. We’ll get 10 pilot LCBO express kiosks inside grocery stores selling wine, beer, and liquor some time over the next 18 months. They won’t be independent and probably won’t have extended hours. LCBO employees will staff them.

It’s far short of Hudak’s call to privatize the LCBO and more cosmetic than a fundamental shift away from the root of the LCBO’s post-Prohibition mandate to control access to the demon rum that has been in place since 1927. It does nothing to address the issues of local choice because it’s still a one-size-fits-all strategy just like the Beer Store.

The real issue is who the retail entities serve. Foreign conglomerates, for example, own the Beer Store through a de facto cartel that allows them to rig the game to ensure their brands get prominence at the expense of craft breweries.

The LCBO doesn’t serve the citizens of Ontario either. Like the Beer Store, it serves its master, which in this case is the giant bureaucracy that surrounds it and holds up the $1.63 billion paid to the treasury last year from sales of $4.7 billion as the price of cutting it loose.

The reason for the mediocre returns despite its monopoly is that the LCBO is expensive to run with some 6,500 full- and part-time employees paid $15 to $20 an hour plus benefits. Incidentally, that contract is up for renewal this spring, so customers should brace themselves.

Then there are the 1,000 or so managers and supervisors. Fully 250 of them make more than $100,000 a year with 17 senior managers earning more than $200,000 a year. In addition, president and chief executive officer Bob Peter is pulling in about $450,000 plus bonus.

The issue is not whether private enterprise could do better — it most certainly could — but whether a thorough overhaul of the LCBO’s practices could generate more revenues for the treasury and serve the public better.

Auditor general Jim McCarter thinks so. He pointed out in his review that the way the LCBO sets prices is mind-boggling. First, it sets the price at retail and then tells suppliers to raise or lower their prices accordingly.

It’s fair to assume that the LCBO has some fat and a decent audit and management review team should be able to flush those savings loose.

Hudak’s mantra of privatization is a dogma that plays well with the hard right of the Conservatives but he should be cautious because until we really know what’s going on at the LCBO and how much money it’s wasting, it would be premature to sell out right now.

Ian Harvey has been a journalist for 35 years writing about a diverse range of issues including legal and political affairs. His e-mail address is [email protected].

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