Doug Ford Fights To End LCBO Supply Management Cartel, Beer could soon be in corner stores in Ontario – April 24, 2019,
When Maxime Bernier decided to run to become Prime minister, one of his major talking points was supply management. The People’s Party of Canada was basically founded on the motto of ending supply management. Well, the reality is what Doug Ford did here; was take a swipe at LCBO without ending their supply management cartel. It might surprise Ontarians to learn that the Beer Store isn’t a Crown Corporation. The Beer Store is actually owned by 3 large multinational brewing companies.
- Molson Coors Brewing Company – 50.9%
- Labatt Brewing Company (AB InBev) – 44.9%
- Sleeman Breweries (Sapporo) – 4.2%
Basically, the contract the Beer Store has with Ontario is the Distribution and sale of beer. If you’re wondering how this arrangement occurred, well protectionism has been part of Canadian culture for a while and when these cartels are formed they’re often not challenged by voters, Canadians are rather passive, I’d have to say even I’m passive on this topic because I don’t consume a lot of alcohol.
But the system Ontario has in place where the Liquor Control Board of Ontario (LCBO) basically sets prices and monitors everything alcohol-related, in the name of protecting Canadian businesses, cartel all over Canada, have not only been allowed to be created but they’ve also been allowed to flourish, to the point that most people don’t even understand that this $1 billion in which the star states the taxpayers will have to pay for, doesn’t explain the complete story.
Beer in corner stores could cost Ontario taxpayers $1 billion, industry sources say – TheStar.com
Ontario Premier Doug Ford weighs in on beer sale battle – GlobalNews.ca
Now, is Doug Ford ending supply management? No, what he’s doing is giving corner stores a stimulus package, because in case you didn’t know when the beer stores close their doors early, a sh*t load of sales taxes doesn’t get to the government’s coffers. It’s important to understand that price controls will still be in effect, what will change is instead of, everyone being solely reliant on the Beer Store, other stores will now be able to sell Beer in a similar fashion to how they sell soda.
If you’ve ever went to a Cosco as an example you’ll notice a lot of small business store owners constantly purchasing soda, this provides a huge boost in revenue all of the Ontario, there are millions of people who would be purchasing beer at corner stores had the Beer Store not had a monopoly and closed their doors so early.
As an example after a maple leafs game, you can’t buy a beer at the beer store and go home with friends at 12 am, instead, you would have had to purchase beer prior to 10 pm and stocked up, now if corner stores are able to sell beer, this changes everything, this changes consumers buying behavior, it’s actually an automatic stimulus for the retail sector. The contract Kathlynne Wynne signed ends in 2025, if the price to break that contract costs only 1 billion, it’s still worth it if you ask me.
I live in Ontario, I’ve lived here most of life, if you know anything about Ontario and beer consumption, chances are that this 1 billion dollar price tag will be paid within 1 year, by consumers. Now if Doug Ford simply did nothing chances are by 2025 Ontario would be missing out on about $10 Billion dollars minimally. Price controls + Sales Taxes + Inflation, this possible $1 Billion dollar price to end that silly contract will be paid easily, possibly in record time.
Now, obviously from my standpoint, this isn’t an open invitation for Doug Ford not to negotiate the contract, because the reality is if honest journalism explained what Doug Ford is doing I doubt any Beer drinker would disagree with him. With that said if the thestar.com frames the story as “Beer in corner stores could cost Ontario taxpayers $1 billion industry sources say” well obviously the average Ontarian will be confused about what Doug Ford is doing.
Now, personally, I’d prefer to end the supply management cartel, which in many ways is the number one contributor to our high customs and duties charges at the U.S border, because in case people don’t know, given the opportunity no Ontarian in his or her right mind would ever buy Liquor in Canada if there were no tariffs charged to us at the U.S border. The supply management cartel for Liquor in Canada is so high that even with the lower loonie it’s still cheaper to buy Beer in Liberal New York State. As many Ontarians know the LCBO is unionized
Ontario Public Service Employees Union – LCBO Union – opseu.org
In Ontario and in many parts of Canada Crown corporations don’t only have price controls, they also have unions who in reality should be considered public sector unions. Crown Corporations are allowed to function as a state-owned business whereas Public sector workers aren’t supposed to have a profit motive, but all of these cartels are eventually going to lead to the demise of the Canadian economy. The real problem with Crown Corporations revolves around an economic downturn, a lot of people in Canada forget that we’re bordering with the United States. The fear tactic often used by the protectionist types is that without these economic barriers and price controls, America will buy up Canada, and destroy our businesses. Of course, this is pure nonsense but if you don’t understand business, you’re forced to believe it, these supply management types do after all have the bully pulpit and more influence than those of us who know exactly what’s going on have.
There’s dishonest reporting all over the Canadian media, people focus on the CBC but most of Canada’s media, simply go with the flow, not wanting to rock the boat in fear these supply management cartels will go on the attack against them. So what we’re left with is Doug Ford at the very least calling this out. Now in the coming days, weeks and months, the LCBO cartel is going to attack Doug Ford, in fact, it’s already happening.
Now personally I don’t know why any person would vote or fight to keep the price of liquor artificially high, but I’ve seen stranger things happen in Canada. My personal belief has always been to take the taboo away from drugs. Stop making drugs sexy, drugs are drugs, some people like them other people don’t, but it’s the making people curious about it that really creates the problems.
I’m huge on labeling, that’s always been my thing, my belief is as long as items are properly labeled and education about these drugs are explained, and they’re kept from the reach of children, the responsibility is on the individual, whether or not they want to consume it or not. Now, I will also point out that I’m not a believer that drugs destroy a society, my belief is idleness destroys a society. Idleness is the devil’s playground. We all know or have met drug addicts that are good at their jobs, what often destroys a drug addict is their lack of liberty.
Human constraints and lack of understanding that our free society wasn’t built on employees and instead was built based on entrepreneurship is why in my opinion you have so many people walking around aimlessly. The cost as an example to start a liquor business in Ontario is artificially high for regulations, so obviously what could have been more entrepreneurs is less. Now Liquor isn’t the only industry in Ontario and Canada that’s controlled by Crown corporations and price controls, I wrote the aforementioned purely so you can see how the government prevents entrepreneurs from even existing.
Now an argument could be made that we don’t want to turn Ontario into the United States? fair enough argument, but the Canadian economy is sinking, although everything appears to be going great now, all it takes is 1 economic downturn and all the price control numbers stop making sense. For that Doug Ford is doing us a favor. What I hope for is a greater understanding of why the cost of living is so high in Canada. Personally, it’s not my business to tell people what to do, I just want people to know what’s going on.
Interesting times ahead