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Tuesday, July 27, 2004
This claims to be a fiscally conservative paper, right?
Adam Radwanski can't understand what the "practical" reasons are for wanting to privatize liquor stores in Ontario, something the finance minister there is floating (heard that before). To his mind, there are just "ideological" ones.
"It's pretty simple, really," says the Post's edboarder. "The LCBO offers consumers good choice. Its prices are reasonable. And it rakes in a tonne of cash for the province."
Gunter weighs in with a defense of consumer convenience. He's right, but that's not even the most compelling practical case for privatization.
Yes the LCBO produces revenue.But looking only at the fact that the LCBO "rakes in cash" neglects to address the most basic financial fundamentals. Judging an enterprise based on revenue alone is a startlingly one-dimensional approach for an organ that supposedly favours sensible fiscal management . By that measure, Petro Canada should never have been sold, nor Air Canada.
What about revenue as a ratio to capital or assets? The LCBO is sitting on billions of dollars worth of property and inventory and its operating costs eat up millions every year. All of that is taxpayer money being utilized in what is clearly a ridiculously inefficient manner. The money could be returned to taxpayers as an economic stimulus, or redeployed to balance Ontario's $6 billion defecit. (Of course Sorbara isn't really talking about privatizing the liquor business, just the retail arm. Ultimately there is no private liquor in Canada as even Alberta continues to own the distribution business.)
Think about it this way, Posties: If Queen's Park were suggesting buying a liquor business today, with good customer service and good prices and some decent cash flow, would you think that was a prudent use of taxpayers' dollars at this particular point in time?
Posted by Kevin Libin on July 27, 2004 | Permalink
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» Sell off the LCBO? from Quotulatiousness
This post at the Western Standard talks about the on-again, off-again idea of privatizing the Liquor Control Board of Ontario (LCBO). For those of you who don't live in Ontario, the LCBO is the government-run monopoly provider of almost all... [Read More]
Tracked on 2004-12-08 9:11:25 AM
Comments
"Its prices are reasonable. And it rakes in a tonne of cash for the province."
In which case we should expropriate other industries and sell other goods and services at monopoly prices. Because that has worked so well for Cuba and North Korea.
Posted by: Ghost of a flea | 2004-07-27 6:46:34 PM
Whenever I hear an LCBO defender make some mush-brained, happy-face statement like: "it makes tonnes of money for the Province!!!", I reach around for my wallet.
Provincial liquor monopolies are nothing but stealth taxation that stokes the engine of government. Think of the armies of bureaucrats and interest groups that subsist on its "profits". Abolish the monopoly, starve the beast.
Posted by: Jay Jardine | 2004-07-28 8:34:34 AM
Whenever I hear an LCBO defender make some mush-brained, happy-face statement like: "it makes tonnes of money for the Province!!!", I reach around for my wallet.
Provincial liquor monopolies are nothing but stealth taxation that stokes the engine of government. Think of the armies of bureaucrats and interest groups that subsist on its "profits". Abolish the monopoly, starve the beast.
Posted by: Jay Jardine | 2004-07-28 8:36:43 AM
I've blathered on for a bit on this topic in a post on my own blog.
Posted by: Nicholas | 2004-07-28 3:00:24 PM
This is a day for me screwing up in other folks' comment sections. The link I tried to enter in the last comment didn't work, so here's the direct URL:
http://www.bolditalic.com/quotulatiousness_archive/000280.html
Posted by: Nicholas | 2004-07-28 3:04:29 PM
As usual, Nick says a bunch in just a few words. Cuba, too true.
Kevin, you raise the question about revenue as a ratio to capital or assets, but don't quote figures. What are they, and how do they compare to other large retail operations?
You save your most telling point for last: would it be a good use of tax money to buy a liquor business if we didn't already own one? Which raises the question of whether the government should be in any sort of retail business?
Posted by: Damian | 2004-07-28 3:31:25 PM
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