February 2010

 

Privatizing the LCBO … Again

The sale and distribution of alcohol in the province of Ontario is controlled by the provincial government through the Liquor Control Board of Ontario (LCBO). Over the decades, the provincial government has acknowledged that alcohol can not be thought of as an ordinary commodity.

For approximately the last 15 years, the provincial government has received a substantial dividend from the LCBO. The LCBO website explains that “the financial dividend to the province has increased 5.1 per cent from $1.28 billion to $1.345 billion.” (Source: LCBO 2007-08 annual report)

It should be noted that within this figure tax payments to the province are not included as part of the dividend.

Even with those impressive financial gains, Ontario’s Premier Dalton McGuinty has retained the services of CIBC World Markets and Goldman Sachs Inc, to “write up blueprints for possible privatization of agencies…including the Liquor Control Board of Ontario”.

This development comes after a rather tumultuous fiscal year for most western governments, both federal and provincial, all of whom have had to come to grips with lower-than-normal corporate tax revenues due to the “financial crisis” of the past 18 months.

In Ontario, an internal review of the LCBO is not new. In 2004, Premier Dalton McGuinty and his then Minister of Finance Greg Sorbara insisted that the LCBO be turned into an income trust. However, in 2006 Federal Finance Minister Jim Flaherty imposed a tax on income trusts, effectively nullifying any advantage to conversion.

The benefits of maintaining the LCBO as a monopoly were discussed then and remain true now:

• WHO research shows that one of the most effective ways to minimize alcohol-related harm is to maintain public alcohol retail distribution systems with a strong duty of social responsibility;
• The LCBO monopoly is more restrained than their private counterparts in promoting alcohol sales and more likely to aggressively challenge and refuse to sell alcohol to underage youth and the already intoxicated;
• Public monopolies moderate the political influence of private corporate alcohol sellers that have a vested interest in boosting alcohol sales;
• Publicly-owned retailers can be held more directly accountable to the public.

(Source: OPHA Letter to the Members of Provincial Parliament re: Privatization, Dec. 2004)

When discussing the control of alcohol sales it is also important to see what privatization has done to other areas of Canada, and the world:

• Alcohol consumption increased in Alberta the year privatization was introduced, while rates in other parts of the country declined;
• A study of the impact of privatization of alcohol sales in Alberta found significant increases in suicide mortality rates;
• Studies in Western Australia and Iceland found an overall increase in alcohol-related problems such as violence and impaired driving with longer hours of sales.

(Source: Provincial Liquor Boards: Meeting the Best Interests of Canadians, MADD Canada, June 2009)

Even in a society where consumer’s needs are met with competing companies dropping prices to ensure sales and customer retention, Ontarians have made it clear that there is a line in the sand when it comes to alcohol and they don’t want it crossed. This is seen within an extensive study released in 2005 by the Centre for Addiction and Mental Health. Some key highlights are below:

• 80% of respondents believed that the number of places where they can buy alcohol in their community is “about right”. A further 9% of respondents felt there are “too many” alcohol outlets.
• 92% of respondents considered it “somewhat convenient” or “very convenient” to get to the nearest liquor or beer store.
• 73% agreed that “before making legislative or policy changes to the way alcohol is sold, governments should be required to consult with health experts.”

(Source: Alcohol and Public Health: The Implications of Change to Ontario’s Beverage Alcohol System, Submission to the Beverage Alcohol System Review Panel, 2005. - Original: Public Opinion on Current Alcohol Policy Issues: International Trade Agreements, Advertising and Access to Alcohol. Findings From a 2002 Ontario Survey, Centre for Addiction and Mental Health Research Document Series No. 201)

The future for alcohol sales and distribution in Ontario is uncertain at this time: what is certain is that alcohol has been shown over decades of research to be no ordinary commodity and should therefore not be treated as such.

For more information on alcohol monopolies please see:

• Retail Alcohol Monopolies and Regulation: Preserving the Public Interest Position Paper (CAMH, January 2004)
• Provincial Liquor Boards: Meeting the Best Interest of Canadians [PDF] (MADD Canada, June 2009)
• OPHA Letter to Members of Provincial Parliament, re: Public health imperatives support rejection of LCBO privatization proposals [PDF], December 15, 2004

In addition, you can find background information, papers, and numerous letters with regards to alcohol privatization by accessing our Information Pack on Privatization and the OPHA's Our Voice in Action - Letters section.

 

Register Online for the 7th annual Alcohol: No Ordinary Commodity Forum

REGISTER NOW

Join us on Tuesday, March 2, 2010, from 8:30 a.m.-4:00 p.m. for our 7th annual Alcohol: No Ordinary Commodity forum. The ongoing aim of this forum is to bring Substance Misuse Prevention and Injury Prevention professionals together to discuss how to help mitigate the harmful effects of alcohol. The forum also provides an opportunity for networking and knowledge exchange.

This year's theme is: Alcohol Policy: Time to Act! Current Research, Policy, and Practical Applications to address Alcohol-Related Harm. We will be discussing methods of developing and implementing Alcohol Policy at the Municipal and Provincial levels with examples provided by members of the public health field. This year’s focus aims to encourage those involved in Alcohol Policy and those thinking about engaging in Alcohol Policy to work together to implement such policies in their communities.

As in every year, there will be opportunities for discussions with renowned expert speakers.

Keynote Address:
• Dr. Thomas Babor, University of Connecticut School of Medicine, and lead author and principle investigator of the landmark book Alcohol: No Ordinary Commodity: Research and Public Policy;

Confirmed speakers include:
• Denise DePape, Director of Alcohol Harm Reduction, BC Ministry of Healthy Living and Sport;
• Nancy Langdon, Program Development Officer, Ottawa Public Health;
• Andy Murie, CEO, MADD Canada;
• Dr. Norman Giesbrecht, Senior Scientist, Centre for Addiction and Mental Health;
• Penny Nelligan, Director, Standards, Programs & Community Development for the Ontario Ministry of Health Promotion;
• Susan Shepherd, Manager, Toronto Drug Strategy Secretariat, Toronto Public Health;
• Victoria van Gilst, Health Promoter, Substance Misuse Prevention, Niagara Region Public Health.

Participants will be charged an $86 registration fee. Participants will receive: two snack breaks and a catered lunch; a printed Summary of our six past alcohol policy forums; and a USB key containing presentations and background documents.

This event is brought to you by the Alcohol Policy Network at the Ontario Public Health Association and the Centre for Addiction and Mental Health in partnership with Toronto Public Health, York Regional Public Health, Ottawa Public Health, Kingston, Frontenac, and Lennox & Addington Public Health, and the Ontario Ministry of Health Promotion.

For more information, contact Jennifer Lodge or call 416-367-3313 ext. 253.

Please note: The Ontario Injury Prevention Resource Centre (OIPRC) will hold their 1st Annual Injury Prevention Forum on Seniors Falls Prevention on Wednesday, March 3, 2010. This forum will also be held at North York Memorial Hall. We are offering a discounted price of $130.00 for those who plan to attend both events.