Saskatchewan liquor store privatization a $46 million a year giveaway

Despite making millions each year in revenue to support the province, the Saskatchewan government wants to privatize liquor sales.

Regina (09 Dec. 2014) — Privatizing Saskatchewan's liquor stores will cost Saskatchewan residents $46 million a year, a new report from the Canadian Centre for Policy Alternatives (CCPA) and Parkland Institute has revealed.

“Privatization takes $46 million away from services like health care or education and puts it into the pockets of private liquor store operators,” said James Clancy, National President of the National Union of Public and General Employees (NUPGE). “Saskatchewan residents will pay the price through tax increases or cuts to public services.”

The study compared the rate of return the Saskatchewan government receives from liquor stores to what the Alberta government receives. If Saskatchewan followed Alberta's lead and privatized liquor stores, government revenues for the last five years would have been $229.2 million less, or a drop of $46 million a year.

$46 million estimate on the low side

In fact, the $46 million estimate may be on the low side. Revenues have been growing. Last year the Saskatchewan government made $65.2 million from liquor sales.

Saskatchewan already paying a price for liquor store privatization

Saskatchewan residents are already paying a price for liquor store privatization. Since 2008, the Saskatchewan government has allowed a limited number of private liquor stores to open. Revenue from these stores is considerably less than what the province would be receiving if the Saskatchewan Liquor and Gaming Commission (SGLA) had been permitted to open new stores.

For example, based on the average revenue for liquor stores in urban areas, the decision to allow four private liquor stores to be opened in Regina and Saskatoon are likely to cost Saskatchewan $3.5 million a year.

Privatization means second rate service for rural communities

Public liquor stores in rural communities provide a better selection and higher level of service than a rural franchise where selling liquor is one of many functions. In spite of this, public liquor stores in rural communities still make a profit. They also provided decent paying jobs which are in short supply in many rural communities.

But none of these matter to the Saskatchewan government when deciding whether or not to privatize liquor stores. Instead profitable stores were closed down and four rural communities — Langenburg, Ituna, Ponteix, and Kerrobert — will have poorer service than cities in Saskatchewan.

Rich get richer from liquor store privatization

Liquor store privatization is helping some of the wealthiest people in Canada. Half of the four private liquor stores in Regina and Saskatoon went to Sobey's, which has more than doubled the dividends it pays to shareholders over the last nine years. Another franchise went to an Alberta-based liquor store chain that has donated to the Saskatchewan Party.

When people found out the well connected and the wealthy are benefiting from the millions of dollars instead of going to services like health care, they voted to award these privatized liquor stores the first ever Privatization Scam of the Year Award.

Important people get the facts

The more people find out about privatization schemes, the less they like them. Saskatchewan residents don't want to see $46 million a year taken out of services like health care to line the pockets of the wealthy. But as the CCPA/Parkland Institute report makes clear, that is exactly what will happen with liquor store privatization.

NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE

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