Ontario’s budget watchdog is taking a deeper look at the Ford government’s alcohol expansion policies after the province agreed to pay $225 million to end an exclusivity contract, paving the way for beer and wine to be sold in corner stores.
Jeffrey Novak, the province’s Financial Accountability Officer, said on Monday that his office will also look into how much money the provincially-owned LCBO will stand to lose as convenience, grocery and big box stores begin offering a wider selection of booze on store shelves.
The government’s critics say the watchdog will be able to give taxpayers the first independent view of the total price tag, based on the province’s own internal assessments and tightly-held projections.
“They can do a full, thorough investigation,” said Liberal MPP Stephanie Bowman, who initially requested the review. “They will be able to look at all of these agreements … and look at estimated impacts on taxpayers revenues and other costs.”
There has been fierce debate over just how much the plan to liberalize the sale of alcohol will cost. The government has offered no details beyond a payment of $225 million to the privately-owner Beer Store to break its exclusivity rights; the Liberals have claimed that between lost money, missed opportunities and that fee, the cost is above $1 billion.
Twice in the past year, the government has made announcements to bring alcohol to convenience stores. First, the province announced beer and wine would be more widely available from early 2026, then in a bid to fulfill an election promise, the province decided to fast-track the end of an agreement with The Beer Store that gave the internally-owned retailer near-exclusive access to where beer could be sold in the province.
In May, the province agreed to pay The Beer Store up to $225 million in “added costs” stemming from the widespread sale of alcohol in convenience and additional grocery stores.
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Government sources told Global News the money was to ensure the beer retailers maintained a set footprint in the province and didn’t resort to mass layoffs to offset the loss in revenue.
The Ontario Liberals insisted that the final price tag would total more than $1 billion. The party said the province would be hit on four fronts through the new deal: money for The Beer Store, LCBO rebate fees, a wholesaler discount and lost licence fees.
“This billion-dollar booze boondoggle is the latest example of Doug Ford lining the pockets of the wealthy, well-connected few at the expense of the people of Ontario,” Ontario Liberal Leader Bonnie Crombie said in June.
Finance Minister Peter Bethlenfalvy has refused to engage with that claim and previously called the Liberal calculations “made-up numbers.” Other than a promise to provide regular updates on the cost through his already-planned quarterly financial briefings, the minister has not ventured into how much the deal will ultimately cost public coffers.
Speaking on Monday, Premier Ford seemed unfazed by the probe, proclaiming the agreement was a “great deal” for the province, before he pivoted to attack his political opponent.
“The FAO, they were contacted by the Liberals, our opposition, and Bonnie Crombie has made it abundantly clear that she wants to add tens of millions of dollars of cost on the backs of the people,” Ford said.
“She doesn’t believe in putting beer and wine in a corner store. And, she just wants to add to the cost of a bottle of beer, a bottle of wine, some coolers.”
As part of his probe, the province’s financial watchdog will look at those figures, and some of the claims the Liberals have made. The FAO said his probe would aim to “estimate the financial costs and benefits of accelerated expansion” of the government’s booze plan.
The investigation will be purely financial and look only at the direct impacts and won’t deal with other issues that may stem from alcohol being more widely available.
“The scope of the project is limited to the direct financial costs and benefits to the Province resulting from the acceleration in the expansion of alcohol sales and will not include any additional impacts resulting from expanded alcohol access, such as health, social or safety outcomes,” the FAO wrote.
The report is expected to be completed by early 2025.
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