A groundswell of change is popping the cap off of Canada’s out-of-date, government-run system of selling liquor to consumers at sky-high prices
OTTAWA, March 16, 2017 – Canada’s liquor control boards – the provincially run bodies that marshal the sale of alcohol to Canadians – have proven surprisingly adept at enduring through calls for lower prices and greater consumer choice.
But, says Macdonald-Laurier Institute Managing Director Brian Lee Crowley, that doesn’t make them immortal.
Crowley, in a new commentary for MLI, lays out the challenges liquor control boards will face in preserving their grip on liquor sales.
“We live in a world driven by the power of the consumer, and regulatory obstacles to consumers are falling all around us”, says Crowley.
That has bodies such as the Liquor Control Board of Ontario, with their monopolies, lack of choice and high prices, swimming against the historical tide.
To read the full commentary, titled “Liquor, Trade and Politics: Get Ready for a Whole New World”, click here.
Constitutional challenges are also posing a major threat.
New Brunswicker Gérard Comeau won his case, made last year before the courts when he was charged with illegally importing beer from Quebec to New Brunswick, that provinces can’t allow monopolies under the constitution.
“We live in a world driven by the power of the consumer, and regulatory obstacles to consumers are falling all around us”
Even if the cost of getting to the Supreme Court proves an insuperable barrier for Mr. Comeau and his friends, eventually someone with deep pockets and an eye on the commercial opportunities that could be created, will take on this issue and fight it all the way.
“When that happens, my money is on the current legal structure for liquor sales being ruled unconstitutional”, says Crowley.
Other trends – such as international trade agreements and the United States’ desire to get its wines into Canadian liquor stores – will also put pressure on the current system.
However the demise of liquor control boards is not imminent. Crowley outlines a number of factors that will keep them afloat – the most important of which is provinces’ need for revenue.
Provinces have allowed spending to spiral out of control and are now more dependent than ever on “sin taxes” such as those placed on alcohol and tobacco.
“The provinces are scrabbling in the bottom of every drawer for every cent they can find, including but not limited to alcohol and tobacco”, says Crowley.
Brian Lee Crowley is the Managing Director of the Macdonald-Laurier Institute.
The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.
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