Restraint will be “unprecedented” in Ontario

Cabinet ministers got the news Wednesday after lunch. The good news: cuts to Ontario government services won’t be as “brutal” as in the Mike Harris era. "The bad news: restraint — and reformation — will be “unprecedented” in duration and effect. Queen’s Park is rethinking the old ways of delivering services in virtually every sector — health, education, social services, energy, booze — to shed its chronic deficit and get more value for money. - Martin Regg Cohn

That's what came out of a meeting today of the Ontario Liberal Cabinet. They were meeting with the Premier's self-appointed budget slasher, Don Drummond.

Of course none of this was talked about during the election. Its like McGuinty and the Liberals are a brand new government elected only to find the cubbard bare.  I see privatization as the unspoken word here. Whenever right leaning governments say we need to re-think government, it means how can we get the private sector to do this.

The logical first target for privatization is the LCBO. It's a captive market, it makes money and who wouldn't want to buy it.  Big changes are coming and one man is putting it together, Don Drummond.

Selling off the LCBO is a quick fix and would add a billion or more to the coffers right away.  The government won't give up any of the cash they collect from booze sales.  That means a private operator(s) would have to make their profit margin some other way.  They won't want to raise prices, so the only way to build a profit margin would be to lower wages and benefits of those that work for the new owner.

Alberta did that. Sold off the Liquor business, kept the profit and laid off the workers.  The new corner stores hired people at much below the rate of the government stores, thus creating a profit margin.  The only people to really benefit were the new store owners.  Thousands of people lost mortgage paying jobs.

Some will argue that the private sector will be more efficient.  That's hardly likely as the current LCBO is the largest retailer of Alcohol in the world and a model of efficiency.  They do it well.  They market their product well.  You get Airmiles for shopping there.

So you heard it here first. The LCBO is on the auction block.