I believe that the Ontario Liberal government, should it win re-election in 2018. is planning to privatize the LCBO, surely one of our crown jewels, given the huge profits that go into the provincial treasure each year. Indeed, in fiscal 2013-2014, it made a record profit of $1.74 billion, more than our formerly wholly-publicly-owned Hydro One.
What is my evidence, other than the rising prices that would make the LCBO's sale even more attractive to private investors?
Consider the pattern:
Before privatizing Hydro One, the government engaged in a series of price increases for electricity, culminating in the current peak rate (weekdays 11 a.m.-5 p.m.) of 18 cents per kilowatt hour. One of the reasons cited (link is external) is that Ontarians' conservation efforts reduced Hydro One's revenues. Left unsaid is the fact that lower profits would have also resulted in a lower IPO when the first 15% of Hydro One was sold off.
But wait. There's more.
Premier Kathleen Wynne has made a big play to offer a wider distribution of beer, which will ultimately be available, but only in six-packs, in 400 grocery stores. Prior to that, she had expressed public outrage over the virtual monopoly enjoyed by the privately-owned Beer Store , whose proprietors are multinationals: Molson-Coors, Labatt (owned by Anheuser-Busch InBev) and Sleeman (owned by Japan’s Sapporo). At the time, she suggested a licensing fee would be imposed on that monopoly. Needless to say, that never happened, but the fact that beer is now allowed, albeit in limited distribution and quantity in grocery stores, suggests an effort to change the public perception about the virtues of privatization.
Next, there is the recently-announced LCBO delivery service. Finance Minister Charles Sousa said,
the creation of LCBO.com shows the government-owned liquor agency's commitment to evolve and modernize, and will provide greater convenience for consumers.
"The virtual shelf space now available to small wineries and breweries is fantastic," said Sousa.
The online sales site will be a huge boost to Ontario wineries, breweries and cider producers, predicted LCBO president and CEO George Soleas.As well as a boost to their already fat bottom line, no doubt, thereby enhancing its attractiveness to future private investors.
Consider as well the recent hiring of Bonnie Brooks as the LCBO's new Chair. (link is external) Known as a turnaround-queen, she joined Hudson Bay in 2008, becoming
its first female president and CEO. Brooks is known for engineering a turnaround for the retailer, dropping its moribund apparel brands and bringing in mid-to-high end fashion products.
Brooks was set to retire from her role as vice-chairman before agreeing to take on LCBO role. She said this new opportunity would allow her to help “build on the great work that has already been done, and to take this exciting retail powerhouse to the next level,” with its expansion online and its new role as wholesaler to grocers.
Cynics like me would suggest that she has really been hired to complete the transformation of the LCBO prior to the start of privatization.
Expect no mention of these plans before the next election. Just as the privatization of the very profitable Hydro One came out of the blue, a cowardly and costly way to avoid tax increases while bringing in her balanced budget in time for the next election, my prediction is that Kathleen Wynne will once more betray the people of Ontario should she win another majority mandate
It is a sad thing when a citizen comes to look upon his government with suspicion and loathing. Yet it is an odium that the premier and her tired regime have justly earned.
What is my evidence, other than the rising prices that would make the LCBO's sale even more attractive to private investors?
Consider the pattern:
Before privatizing Hydro One, the government engaged in a series of price increases for electricity, culminating in the current peak rate (weekdays 11 a.m.-5 p.m.) of 18 cents per kilowatt hour. One of the reasons cited (link is external) is that Ontarians' conservation efforts reduced Hydro One's revenues. Left unsaid is the fact that lower profits would have also resulted in a lower IPO when the first 15% of Hydro One was sold off.
But wait. There's more.
Premier Kathleen Wynne has made a big play to offer a wider distribution of beer, which will ultimately be available, but only in six-packs, in 400 grocery stores. Prior to that, she had expressed public outrage over the virtual monopoly enjoyed by the privately-owned Beer Store , whose proprietors are multinationals: Molson-Coors, Labatt (owned by Anheuser-Busch InBev) and Sleeman (owned by Japan’s Sapporo). At the time, she suggested a licensing fee would be imposed on that monopoly. Needless to say, that never happened, but the fact that beer is now allowed, albeit in limited distribution and quantity in grocery stores, suggests an effort to change the public perception about the virtues of privatization.
Next, there is the recently-announced LCBO delivery service. Finance Minister Charles Sousa said,
the creation of LCBO.com shows the government-owned liquor agency's commitment to evolve and modernize, and will provide greater convenience for consumers.
"The virtual shelf space now available to small wineries and breweries is fantastic," said Sousa.
The online sales site will be a huge boost to Ontario wineries, breweries and cider producers, predicted LCBO president and CEO George Soleas.As well as a boost to their already fat bottom line, no doubt, thereby enhancing its attractiveness to future private investors.
Consider as well the recent hiring of Bonnie Brooks as the LCBO's new Chair. (link is external) Known as a turnaround-queen, she joined Hudson Bay in 2008, becoming
its first female president and CEO. Brooks is known for engineering a turnaround for the retailer, dropping its moribund apparel brands and bringing in mid-to-high end fashion products.
Brooks was set to retire from her role as vice-chairman before agreeing to take on LCBO role. She said this new opportunity would allow her to help “build on the great work that has already been done, and to take this exciting retail powerhouse to the next level,” with its expansion online and its new role as wholesaler to grocers.
Cynics like me would suggest that she has really been hired to complete the transformation of the LCBO prior to the start of privatization.
Expect no mention of these plans before the next election. Just as the privatization of the very profitable Hydro One came out of the blue, a cowardly and costly way to avoid tax increases while bringing in her balanced budget in time for the next election, my prediction is that Kathleen Wynne will once more betray the people of Ontario should she win another majority mandate
It is a sad thing when a citizen comes to look upon his government with suspicion and loathing. Yet it is an odium that the premier and her tired regime have justly earned.
