Pros And Cons Of The Liquor Control Board Of Ontario

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The Liquor Control Board of Ontario (LCBO), a Crown Corporation, was established in 1927 with the goal to “control the sale, transportation, and delivery” of alcoholic beverages in Ontario. It operates 618 stores and has a monopoly, as it is the only retailer allowed to sell hard liquor. The LCBO provides the government of Ontario with a large inflow of cash on a yearly basis. In 2009-2010, the LCBO transferred $1.41 billion to the government of Ontario in 2010. Throughout the years, many have advocated the privatization of the LCBO. This issue has come up because in Canada, the sale of alcohol is determined by provincial jurisdiction. Moreover, other provinces such as Alberta have privatized. The argument for privatization is that…show more content…
Excessive use can lead to dependence, bodily damage, and can affect not only the user but his or her loved ones. Further, many crimes are committed due to intoxication. Because of the effects of alcohol, the public would likely have a strong interest in the alcoholic sales structure. 3. Pros and Cons of Privatization 3.1 Government The Ontario government could benefit greatly from the privatization of the alcohol industry from a revenue standpoint. The privatization of alcohol could potentially see many different stores startup leading to a greater amount of sales, leading to more tax dollars for the government. This increase in tax dollars would likely be greater than the current LCBO structure. Conversely, if the alcohol industry were to privatize, the government may have to deal with the social consequences of increased consumption. In a recent study, 82% of homicides in North America were committed under the influence of alcohol. If on one hand, we have a large influx of tax dollars from sales, more dollars may be needed for police enforcement and increased funding in the judicial system. 3.2…show more content…
If the liquor industry were less regulated, more startups would occur. Applying Porter’s Diamond Model, a larger amount of businesses could stimulate firm rivalry and its related industries due to the framework government has implemented leading to national advantage. According to the LCBO website, the LCBO created a paltry 7 new stores in the province last year. Under privatization, the number of startups would likely increase leading to more opportunities for businesses and investment. This means a larger Ontario GDP and multiplier

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