Doug Ford Could Sell the LCBO


Shortly after announcing that the province's financial situation is dire, the newly elected PC government appears to be looking for ways to earn some fast cash.

One way to to generate some instant revenue?

Potentially selling off such major Crown corporations as the LCBO, Ontario Power Generation (OPG) and Ontario Lottery and Gaming (OLG).

A report conducted by auditing firm EY Canada, which Doug Ford commissioned to help the government reverse its financial fortunes, says that "Ontario currently holds assets that could be monetized to generate a one-time cash payout by selling all or a portion of GBEs (government business enterprises) and/or owned real estate."

According to the report, privatizing GBEs could have a negative long-term effect on provincial coffers, as the government will be settling for a one-time influx of cash and foregoing any future revenue generated by the companies.

"It is important to understand that the trade-off is foregoing future income; in light of the long-term impacts of monetization, robust business cases firmly rooted in evidence are required before proceeding," the report reads.

The PC government recently announced that EY Canada conducted a comprehensive analysis of past government spending across major sectors and government programs, with a focus on three primary tasks:

  • Conducting a detailed analysis of government spending over the past 15 years
  • Comparing Ontario government expenditures and the rate of spending growth against that of other major provinces and international jurisdictions
  • Finding ways to make provincial programs more efficient and serve Ontarians better.   

While the the government says it will use the report—which it says was a "line by line" review of the last decade and a half of spending—as a starting point to help make all government spending "more effective and efficient," it has yet to endorse any specific suggestions.

In other words, the government has not yet announced any plans to sell the LCBO, OPG or OLG.

That said, critics are concerned about privatization and its impact on Ontario's workforce and economy.

They’re also concerned about other cuts to services. 

Recently, OPSEU President Warren (Smokey) Thomas said he was "alarmed" by the release of EY Canada's report on Ontario's finances and fears the government is using it as a pretext to "make devastating cuts in the public and broader public sectors." 

In a statement, Thomas said he recommends the end of privatization and "costly public-private partnerships that have been an $8-billion dollar disaster."

He also said savings could be produced by stopping the "expensive and unnecessary expansion of senior and middle management."

Speaking out against cuts, Thomas said premiers dating back to Bob Rae have either underfunded or cut public services, but have still been unable to reign in the province's deficit.

"EY's recommendations go way beyond shuffling deck chairs, they want to have Ontario ram the iceberg," Thomas said in a statement. "Ontarians will end up with low-quality services that in some cases might put their health at risk."

As far as privatization goes, Thomas says it's short-sighted to deny the government reliable revenue streams, citing the sell off of the 407 as an example.

"The report sets the stage for more privatization, but that's just a breeding ground for cronyism and pork barrel politics," he said. "Look at the fiscal carnage that Highway 407 inflicted on Ontario taxpayers."

To read the full report, click here.

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