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Modernize Ontario
About the campaign
Decade after decade of a long walk, Ontario alcohol policies treads towards a freer market. What’s the next step for the Liquor Control Board of Ontario?
The history of the LCBO is rife with the contradiction of making money off of a social vice they take pride in suppressing, a contradiction that continues to be its main driver today – all of this culminating into the necessity of a strike as they saw private competition become an unavoidable reality. So what to expect for the future of the LCBO and the liquor market in Ontario?
Modernizing Spirits
Modernizing the sale of spirits, IE allowing for existing private retailers to also carry spirits, would generate savings for the province of between $100M - $120M per year.
Mixed Public/Private Retail Model
Simply deciding to stop building new LCBOs and allowing for private retailers to fill the void, along with modernizing the sale of spirits, would save Ontario $106M after one year, $590M after 5 years, and $1.3B after 10 years.
Fully Private Retail Model
Having the LCBO operate solely as the wholesaler of alcohol and having retail done privately, would offload the entirety of the LCBO’s retail operations, saving Ontario $563M per year. At the 5 year mark savings would be $2.815B, and at the 10 year mark the savings would total $5.63B.
The LCBO Strike
The LCBO strike is now behind us, with a new 3-year deal signed with the Ontario Public Sector Employment Union (OPSEU). But, the strike being behind us doesn’t mean that all eyes shouldn’t be on the LCBO, and the falsehoods that were spread during the strike. The Consumer Choice Center’s Modernize Ontario campaign evaluates the claims made by the LCBO and its unionized staff over the course of the strike, and highlights that further modernizing Ontario’s alcohol retail market would be a win for consumers, and for taxpayers.
History of the LCBO
The LCBO is a Crown agency that retails and distributes alcoholic beverages throughout the province of Ontario. It is accountable to the Legislative Assembly through the minister of finance. It was established in 1927 to sell liquor, wine, and beer.
The LCBO maintained a quasi-monopoly on the trade in alcoholic beverage sales in Ontario for nearly a century after its creation: for most of this time, LCBO stores were the only retail outlets licensed to sell alcohol in Ontario, with the notable exceptions of beer (The Beer Store) and with the most recent expansion of wine, beer and ready-to-drink cocktails being available at grocery stores and convenience stores.
Because Ontario is Canada’s most populous province, with over 15 million people, or almost 40% of the nation’s population, LCBO’s quasi-monopoly status made it one of the world’s largest purchasers of alcoholic beverages
Read the report
Responding to Myths and Facts
Claim: The LCBO generates $2.5B for the province of Ontario.
FACT CHECK: ✅ TRUE
This is true, the LCBO generated a dividend for the province of Ontario of $2.58B according to their 2022-2023 annual report.
Claim: The dividend would disappear if the LCBO exited the retail market.
FACT CHECK: ❌ FALSE
This claim is categorically false. The LCBO generates it’s revenue for the province of Ontario as the wholesaler of all alcohol in the province. What is called the “wholesale markup” is how the LCBO generates funds for the government. As one of the largest buyers of alcohol in the world, the LCBO purchases all alcohol sold in Ontario, and sells that alcohol to retail outlets, meaning that the wholesale markup exists regardless of who retails it. Below, for example, is how money is made on the sale of a bottle of whiskey, but the same applies for any alcoholic beverage.
Claim: Private retailing hasn’t worked in other provinces.
FACT CHECK: ❌ FALSE
This is categorically false. Alberta has a completely private retail model, where Alberta’s version of the LCBO simply acts as the wholesaler. B.C, has a mixed model where they have stores run by the province, and stores that are privately run. And Quebec, the province that has the most alcohol retail density in Canada, has long allowed for beer & wine to be sold at convenience stores.
Claim: Ontario is the wholesaler for other goods but doesn't act as the retailer.
FACT CHECK: ✅ TRUE
This is true. The province of Ontario does not run a single retail storefront for cannabis sale, but still generates hundreds of millions of dollars by acting as the wholesaler. In fact, the reason why Ontario decided against running retail stores in the cannabis market is because it would generate less revenue for Ontario, because taxpayers would then be on the hook for those storefronts. Ontario made a purposeful decision to avoid replicating the LCBO model for cannabis, and for good reason.
Claim: The LCBO’s retail operations are efficiently run.
FACT CHECK: ❌ FALSE
The LCBO is not an efficient retailer of alcohol. If you compare the LCBO’s operations to comparable private retailers in Alberta, it costs the LCBO approximately $1,000,000 more per store in operation costs. These costs lower the dividend paid to the province of Ontario.
If we could snap our fingers right now and fully transition the LCBO out of the government’s operating model, taxpayers would save $669 million per year. If the Ford government is looking for low-hanging fiscal fruit, this is it.
Claim: The LCBO is a bloated operation.
FACT CHECK: ✅ TRUE
The LCBO is a bloated operation, and that bloat ultimately lowers the dividend the LCBO hands over to the province of Ontario. In 2023, the LCBO had 766 employees on the “Sunshine List”, which are public employees with a salary over $100,000 per year. In fact, the number of LCBO employees on the Sunshine List has increased dramatically over the last 10 years. From 2013 to 2023, the number of Sunshine List employees has more than tripled from 255 in 2013 to 766 in 2023
Claim: Allowing for private retail would sacrifice jobs
FACT CHECK: ⚠️ DEPENDS
This is true depending on the direction the province chooses to go. If the province were to eliminate the LCBO’s retail operations entirely, and allow for private retailers to move into the market, the existing LCBO jobs would disappear, but that doesn’t mean that the net jobs retailing alcohol would necessarily decline. As new private retailers open, so do job openings. That said, Ontario could simply choose to stop building new LCBO retail stores, and allow for private retailers to operate and compete. This would save taxpayers the cost of LCBO expansion, improve consumer choice, and could protect the jobs of those currently employed by the LCBO.
Claim: Product variety would suffer with private retail.
FACT CHECK: ❌ FALSE
This is false, largely because if the LCBO as a retailer makes a mistake on what products it orders, it has to take the losses associated with unsold product. If the LCBO is just acting as the wholesaler, they do not assume any retail losses for unsold product, and it would be on private retailers to better manage their retail space. Private retailers can better respond to consumer demand as private retail is expanded.
Support the modernization of ontario
Sign our petition in support of allowing private retailers to enter the alcohol market in Ontario, giving consumers more choice and convenience, and saving taxpayers money. Ontario should immediately stop building new LCBOs, allow for private retailers to compete for all forms of alcohol.
Sign the petition
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