Ontario Public Service Employees Union (OPSEU)

Ontario Public Service Employees Union (OPSEU)

March 29, 2007 11:35 ET

OPSEU-McGuinty Government Losing Millions Through Private LCBO Agency Stores

TORONTO, ONTARIO--(CCNMatthews - March 29, 2007) - The Liquor Control Board of Ontario is losing more than $73 million a year in sales and $16 million in profits by allowing private "agency stores" to sell alcohol in small and mid-sized Ontario communities, according to an independent consultant's report released today by the Ontario Public Service Employees Union. OPSEU represents more than 6,000 unionized LCBO employees.

Replacing 60 to 90 agency stores with publicly-owned LCBO outlets would mean an additional $250 million to $340 million in net provincial government revenue over the next 10 years, the report shows.

"The agency store program was started in the 1960s to serve small northern communities that couldn't support a real LCBO outlet," said OPSEU president Leah Casselman. "But in the last four years the government and the LCBO have doubled the number of agency stores. About two-thirds of the 199 agency stores are now in located in southern Ontario and almost half are in communities that could easily support a profitable LCBO store."

Agency stores are private businesses that are licenced to sell alcohol in grocery stores, convenience stores and other retail outlets in communities approved by the provincial government. In May 2006, the McGuinty government announced plans to open another 20 agency stores, all in southern Ontario.

There are 89 agency stores with annual sales between $575,000 and $3.3 million that could each be replaced with real LCBO outlets while generating increased public revenue, the study found.

"In addition to costing the province millions in lost revenue each year, these private agency stores are short-changing local communities," says Jo Ann Fisher, chair of OPSEU's Liquor Board Employees Division. "Real LCBO stores provide better service and selection. They reduce the risk of illegal sales to minors and intoxicated customers. They also provide a bigger boost to the local economy."

Opening new LCBO outlets would inject an average of $142,000 a year into the local economy of each community in wages, rent, property taxes and other expenditures, plus another $280,000 to $420,000 in spin-off economic activity, according to the report.

The study LCBO Agency Store Repatriation: A Financial Analysis was prepared by independent business consultant Russ Christianson based on agency stores sales data provided by the LCBO. Christianson has 25 years' experience in the retail distribution sector and is president of Rhythm Communications.

Contact Information

  • OPSEU Communications
    David Cox
    1-800-268-7376 ext. 8314