The Liberal government is keeping alcohol sales right where they are, even in the wake of reports recommending beer and wine start being sold in convenience stores.

“We believe Ontarians are well served by the current model,” said Susie Heath, press secretary for Finance Minister Charles Sousa, whose ministry is responsible for the provincial liquor retailer.

“Last year, the LCBO generated $1.74 billion in transfers to the province, the 20th consecutive year the agency has increased its dividend to the province. This is important funding that supports vital services for all Ontarians, such as health care and education.”

The government is reviewing its Crown corporations – including the LCBO, OPG and Hydro One – and could sell part of them or strike new partnerships with pension funds such as OMERS and Teachers'.

At the LCBO, Sousa has already announced 10 new Express outlets in major grocery stores by the end of the year. The government is also putting up for sale the LCBO head office and big warehouse in a lakefront section of downtown Toronto where land prices are high.

In its recent annual report, the LCBO noted its sales from its 900 or so outlets grew by $105 million to just under $5 billion last year, the 19th straight year of record sales.

The Liberals' statement comes hot on the heels of a report from the C.D. Howe Institute, titled Uncorking a Strange Brew: The Need For More Competition in Ontario’s Alcoholic Beverage Retailing System. The report recommended the government permit the sale of alcohol in grocery and convenience stores, as well as licensing more retailers to sell beer and wine.

Progressive Conservative Finance Critic Vic Fedeli told Queen’s Park Briefing Wednesday that most people are unaware the government has already deregulated sales of beer by allowing The Beer Store to operate. The business is privately owned by brewing companies – another little-known fact, Fedeli says.

“Why is it okay to sell beer through the private sector, but not wine or liquor?” asks Fedeli. “That would be a logical question.”

Fedeli says there needs to be a broader discussion about opening up alcohol sales, one that eventually leads to more talk of interprovincial trade.

The C.D. Howe report found the lack of competition in Ontario's alcohol sales system is causing higher prices and lost revenue for the government. At present, only the LCBO, The Beer Store and several off-winery retails can sell liquor.

According to the study, there is a link between deregulated alcohol sales in British Columbia and Alberta and higher government profits. Ontario could see similar results if it allowed convenience and grocery stores to sell beer and wine, the report claims.

“Other factors being equal, Western Canadian provinces with more competition had 7 per cent more per capita provincial alcohol profits than provinces with government-run monopolies,” states the study. “We find that increasing competition in the alcohol retail sector can reduce prices for consumers without necessarily decreasing revenue for the provincial government.”

The same study claimed brewers were raking in up to $640 million more in additional profits compared to more competitive markets like Quebec. Ontario's convenience stores say they are ready to provide more competition.

“Make no mistake about it – modernizing Ontario’s alcohol retailing system can be done within the framework of the LCBO and in a responsible manner to ensure that the sale of alcohol is conducted with the highest standards,” said Dave Bryans, CEO of the Ontario Convenience Stores Association (OCSA).

The OSCA, which says its members already run many LCBO outlets, and that modernizing the system could boost sales in areas like the craft beer industry. OCSA members say they would set aside 30 per cent of beer retail space fro Ontario craft brewers.

Liberals not budging on beer and wine sales

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