Liquor store privatization pays off for former politicians

“Privatization of liquor stores means money that once supported public services like education or health care is flowing into the pockets of former politicians who helped privatize them when they were in office.” — Larry Brown, NUPGE President

Ottawa (21 June 2017) — When liquor stores are publicly owned, the profits help fund the public services we rely on such as health care. Privatization of liquor stores means that the public no longer sees those profits. Instead, profits flow into pockets of the wealthy and well-connected — like those pockets belonging to former politicians who supported privatization when in office.

A company called Liquor Stores NA, is a good example. Until Liquor Stores NA’s AGM this week, their board has included 2 former provincial finance ministers who were in office at the time liquor stores were privatized or partially privatized in their provinces.

"Privatization of liquor stores means money that once supported public services like education or health care is flowing into the pockets of former politicians who helped privatize them when they were in office,” said Larry Brown, President of the National Union of Public and General Employees (NUPGE).

Company benefited from liquor store privatization in Alberta and B.C.

Liquor Stores NA is the largest private operator of liquor stores in Canada. It was started when liquor stores were privatized in Alberta. It expanded into British Columbia when a bigger role was given to private liquor stores. The bulk of its stores are still in Alberta and British Columbia.

Long-time board chair was Alberta Provincial Treasurer when Alberta liquor stores were privatized

For many years, the chair of the Board of Directors of Liquor Stores NA was Jim Dinning. At the time Alberta’s liquor stores were privatized, Dinning was the provincial treasurer. He was on the board of Liquor Stores NA from 2004 until 2017. In 2016 alone, he received $151,560 for being on the board.

Former BC Finance Minister a board member since 2006

In 2004, the British Columbia government removed the cap on the number of private liquor stores in the province. It was good news for Liquor Stores NA, because in the years that followed that announcement, their presence in BC increased dramatically. Coincidentally, Gary Collins, who was British Columbia’s finance minister when the decision was made to allow an expansion of private liquor stores, joined the board in 2006. Just for the year 2016, he received $81,520 for being on the board.

Liquor store privatization cost Alberta $1.5 billion and counting

The lost revenue from liquor store privatization is substantial. In 2012, it was estimated that privatizing liquor stores in Alberta had taken $1.5 billion away from services like health care. By now that figure is much higher. And that doesn’t include other costs to the public that come with privatization, like higher enforcement costs for rules on liquor sales, higher prices, and higher costs for dealing with alcohol abuse.

In British Columbia, the public share of revenues from alcohol sales dropped significantly after the growth in the number of private liquor stores in 2004.

Privatization and conflict of interest

Jim Dinning and Gary Collins are by no means the only former politicians who helped privatize public services while in office, and after leaving office, then sat on the boards of companies owning privatized services. One of the more notorious examples was Gary Filmon, who privatized Manitoba’s telephone system as premier, and then collected well over $100,000 a year as a board member of the privatized MTS.

Unfortunately, conflict of interest rules in most places don’t address this. And for most people, the lack of rules strengthens their belief that, while some people do very well out of it, privatization is not in the public interest.


NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 370,000 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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