The LCBO - Part 2

2. Balancing regulatory control with the need to raise revenue for the provincial and federal governments through profits and taxes on alcohol sale;

The point above,basically means the LCBO is in business to make money for provincial and federal governments.

The LCBO Employees Union loves to talk about how much money is raised by the LCBO and if we privatized it, all that revenue would go away.

This is a half truth at best…. when I go to NY state and buy wine, once I reach customs on my way back and pay duty on the wine there is a line on the bill called LCBO markup charge.

Last time I was in NY buying wine here was the break down on the duty...

Value of wine in CDN dollars - $1160.70

Excise Tax - $11.16
GST - $70.31
Provincial (LCBO) Markup fee - $464.06
Provincial sales tax - $196.31

Total duty - $741.84

So the province of Ontario between the markup fee and sales tax got - $660.37 without an LCBO employee handling a single bottle!

This markup charge is in those profit number that the LCBO Employees Union talks about. So if the LCBO didn’t exist the government would still get a good chunk of that revenue (via alcohol taxes) that is currently gets from the LCBO.

Cheers!

Mark.