January 27 2025

Doug Ford’s decision to rush through the partial privatization of alcoholic beverage sales in 2024 will cost Ontarians $1.4 billion. That’s the conclusion of a report by the Financial Accountability Office of Ontario released today.

The cost includes $1.28 billion in lost tax revenues and $489 million to compensate the wine industry and large breweries. While there some increase in LCBO revenue from acting as the wholesaler is expected, that increase will be largely offset by higher costs and a decline in revenue from LCBO stores.

Long-term costs likely to be higher

When alcoholic beverages are sold at the LCBO the profits go to support schools, hospitals and other public services. At private retailers, the profits go to the owners including the billionaires who own Sobeys, Loblaws and Walmart.

As the experience of Alberta shows, one reason for revenue losses is privatizing the sale of alcoholic beverage means higher overhead costs. This either means higher prices for consumers, lower government revenues or both. The Ontario government is already giving up $1.28 billion in tax revenues and this could increase.

Report doesn’t include impact on the health care system

It was the Ontario Liberals that first allowed grocery stores to sell alcoholic beverages in 2014. A study on the impact of that decision on the health care system found that alcohol-related emergency department visits increased by 17% in areas where there were grocery stores selling alcoholic beverages. 

Increasing the number of grocery stores allowed to sell alcoholic beverages and allowing corner stores to sell alcoholic beverages is likely to make the situation far worse. And the financial cost is only a small part of the problem. More people going to emergency for alcohol-related reasons will mean longer waits for everyone and increased pressure on health care workers.