More Fishy Electioneering

Tim Hudak has “big fish to fry.” The PC Party leader chose that pungent analogy to explain why fixing Ontario’s alcohol distribution system is no longer part of his campaign. It’s just a guppy compared to sturgeon like creating a million new jobs while chopping a hundred thousand public service positions.

The Niagara MPP comes from the Mike Harris days, having first been elected in the 1990s, championing the Common Sense Revolution. Now it seems Hudak is still revolting, but good luck finding the common sense.

Much of the Harris government’s inspiration came from the success of the Alberta Conservative juggernaut led by Ralph Klein. If Hudak truly wants to trim the public service while creating new jobs, there’s no more obvious place to look.

The Klein government shuttered its government liquor depots 20 years ago, erasing 208 stores full of civil servants from its books. According to the 1993 Alberta Liquor Control Board annual report, the province also had 530 hotels providing off-sales, and 65 private retailers. In total, that’s 803 total liquor retailers.

Fast-forward to 2014. Wild Rose Country now boasts approximately 2,000 liquor retailers, all private. That’s a whole lot of new job creation, without cuts to programs and services. That’s new income tax, business tax and property tax. That’s 200+ capital assets the government could sell off or put to better use.

It’s also an increase in alcohol-related revenue. Over the past two decades, the Alberta government’s take rose from $405-million to $729-million; an 80% increase.

Related: Beer Goggles for Everyone!
Related: Bringing Ontario Up-To-Date

The other upside to allowing intoxicants to be sold closer to where people live, according to the Alberta experience, is the dramatic decline in booze-related traffic injuries. Despite adding 50% more citizens to Canada’s fourth largest province, the overall number of casualty collisions where alcohol was a factor dropped from 1,699 in 1993, to 980 by 2010 (the most recent stats made available, shown below). No matter what your personal feelings towards Alberta’s long-serving ex-Premier, his move to privatize liquor sales was an unqualified success.

After resigning from provincial politics last year, former (Liberal) Ontario Finance Minister Dwight Duncan revealed even a partial sale of the LCBO could net the province billions of dollars right away, without diminishing long term revenues. According to the LCBO’s own stats, a full closure would also take 7,500 non-essential public servants off the government payroll.

The fact is, Hudak could easily make good on his promise to repair Ontario’s broken liquor distribution system, and to do so would actually add fuel to his big fry up. Instead he’s the one flip-flopping like a trapped fish, struggling to stay out of the fire.

Provided by the Alberta Ministry of Transportation
Provided by the Alberta Ministry of Transportation

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7 thoughts on “More Fishy Electioneering”

  1. Hey Mike, thanks for the comments.

    The figures I provided show that alcohol-involved casualty collisions have dropped dramatically since privatization. I never addressed the basic question of drinking and driving.

    But since you did…

    The 2013 MADD article you linked to, clearly states “the rate has now increased for the fourth time in five years FOLLOWING TWO DECADES OF STEADY DECLINE.”

    It’s worth noting Alberta also made driving with a .05 blood alcohol level an offence a few years ago, which partially explains the increased number of charges being laid. It’s a province with a very rural composition (driving is pretty much mandatory in most areas), an 18-year-old minimum drinking age and more vehicles per capita than any province in Canada.

    Cheers,

    Dan

  2. Hi Dan,

    Perhaps that wasn’t the best example to prove the point but this CBC story from early 2013 shows illustrates the rates of impaired driving (per 100,000) and shows how much lower Ontario’s rate is to the rest of the country: http://www.cbc.ca/news/canada/saskatchewan/infographic-drunk-driving-record-in-sask-worst-among-all-provinces-1.1359384

    Sure some of the that can be attributed to things like greater percentage of the population rural populations but not all. According to stats can, Ontario’s urban/rural spilt is 86/14 (http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo62g-eng.htm), Quebec’s is 81/19 (http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo62f-eng.htm), Alberta’s is 83/17 (http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo62f-eng.htm) and BC is the same as Ontario at 86/14 (http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/demo62k-eng.htm).

    These stats are from 2011 (before the implementation of Alberta’s 0.5% law) but they show that AB, BC and QC have vastly higher rates of incidents of impaired driving despite having similar urban/rural population splits.

    Mike

  3. Thanks Mike, I don’t deny Alberta has problems it still needs to address. My point is that privatizing alcohol sales not only DIDN’T make things worse… it actually made things better. The numbers back me up.

    If you want to get into pricing, convenience and selection, I’ll go there too (starting here: https://brewscout.wordpress.com/2013/07/02/beer-goggles-for-everyone/)

    I was of legal drinking age, doing my post-secondary in Alberta, before and after that province privatized. I’ve seen the transformation first-hand, unlike most people in this province that hypothesize.

    That having been said, I’m born and raised in Ontario, and have lived here most of my life. This province may have lower DUI rates than the rest of Canada, but there’s still room for improvement. If putting booze closer to where people live keeps more drinkers off the road, I’m all for it.

    For your reference, here’s Washington State’s more recent experience: http://www.nbcrightnow.com/story/23774527/alcohol-related-arrests-continue-to-decrease-after-liquor-privatization-in-washington-state

    If other North American jurisdictions have also recently privatized, but have contrary sets up of numbers, I’m genuinely interested in seeing them.

  4. So Dan, my question would be (from a purely public safety angle) why mess with a system (once again not talking about the inner workings of the beer store, which I think are due for some much needed improvements) that has led to the lowest number of drunk driving incidents in the country?

    Now in terms of pricing. Alberta has much lower beer tax but as this metro article points out, this saving isn’t passed on to consumers and can lead to differences in pricing between chain and convenience: http://metronews.ca/news/calgary/927249/calgary-beer-drinkers-face-6-44-price-swing-for-a-12-pack-survey/. The article (From 2014) states “a dozen Molson Canadian bottles ranges between $22.75 and $29.19, as per a phone sample of 24 booze barns” while the current price (non-sale) for a 12 of Canadian here is 21.75.

    In terms of choice selection. I would point to this onbeer.org story on the state of Alberta’s craft industry and specifically point four:

    The fourth factor is Alberta’s fully privatized retail system. Despite its upsides, it makes it very difficult for a small player to get wide distribution – requiring a brewery to literally go store-by-store to persuade a retailer to carry their product. This is resource intensive work – and who has more resources?

    (http://www.onbeer.org/2010/12/the-alberta-disadvantage-the-struggles-of-alberta-micros/)

    Obviously this is only one of five factors listed in the article but it sums of my concerns for Ontario. How is Bellwoods going to compete for shelf space in a Macs? Just an example using my favourite brewery.

    Like I mentioned above, I think there are ways to keep responsible sales, well paying jobs and expand craft access.

    Just a few off the top of my ahead.

    – Allow OCB to buy a stake in TBS
    – Re-structure listing fees to be based on brewer size
    – Greater in-store promotion for OCB beers (maybe a rotating brewers feature)

    Just some thoughts.

    Mike

  5. Damn, Mike, you do your research. Good on ya!

    1. “Why mess with a system…” Because there’s room for improvement, and other jurisdictional research/experience shows how it can be done effectively. I’m not proposing we re-invent the wheel. I was a Business Analyst for Ontario’s Ministry of Consumer and Business Services (now ServiceOntario)… drawing from other regions’ knowledge base is common practice when proposing changes to the regulatory environment.

    2. “Now, in terms of pricing…” The difference here is that in Ontario you can pick between either the price the LCBO’s or The Beer Store’s price (which is nearly always the same, everywhere, in the entire, enormous territory). In Alberta, you can shop from 2,000 private retailers that set their own price and compete for business. The AVERAGE price might be higher in Alberta, but if cost is your only consideration — and not the enormous selection of flavourful beers from all over the planet — you can still usually beat the Ontario rate if you care to shop around.

    3.”In terms of selection…” It’s important to look at the onbeer.org (I love Jason’s blog, by the way!) article as a whole. True, it’s labour intensive for small brewers to go location-to-location to get distribution, but that’s no different than the LCBO here. Individual store managers decide what gets in their shop (unless that’s changed recently, which I heard some rumblings about — please let me know if I’m wrong). Any brewery can buy their way into The Beer Store, but if we’re talking about small, local brewers, that’s more than just a little cost-prohibitive, and it ludicrous to say its fair for them to have to contribute to A-B InBev, MolsonCoors and Sapporo for that privilege.

    If you have some time, I invite you to go through this (admittedly long-winded) piece I posted last year, and see how Half Pints of Winnipeg feels about the Ontario vs. Alberta models: https://brewscout.wordpress.com/2013/06/20/bringing-ontario-up-to-date/ Alberta has problems, but Ontario has more.

    The onbeer.org article focuses on the plight of Alberta’s craft brewers, who, until recently were hampered by a minimum brewing capacity just to get into the game. Nano-breweries couldn’t sell off-premise. Since that changed, as Metro Edmonton reported in February, there’s plenty of interest in opening new craft breweries in that province: http://metronews.ca/news/edmonton/942696/more-craft-breweries-could-come-to-edmonton-says-beer-retailer/

    4. As to Bellwoods (also one of my faves… I’m drinking a Bimini Twist right now), I interviewed one of their owners about that last year for my piece in the Toronto Standard: http://torontostandard.com/culture/is-dundas-ossington-torontos-de-facto-beer-district/. It’s not in the article, but Mike Clark says the partners have no interest in the LCBO or the Beer Store. I still have the audio file.

    I do recall seeing Bellwoods in Penn Station when I was in New York however. Curious, right?

    Fact is, if Bellwoods wanted wider distribution – in a public or private marketplace – they would have noooooo problem. They’re industry darlings with great branding and damn fine product. They could bottle barrel-aged Brett farts and convenience stores would beg to stock it.

    5. Your points at the bottom — I’m in favour of, but I believe they’re just a starting point. I love our craft beer, but as a consumer I also believe the average Ontario beer drinker shouldn’t have to book a flight to taste what someone in north Edmonton takes for granted.

    I’m off to C’est What? now, to enjoy some more of Ontario’s finest. Please find me if you’re there. Or tomorrow, at Trinity Bellwoods for Home Runs for Horizons. I’m enjoying the discussion.

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