Front Burner - Is Doug Ford’s $225M booze plan worth it?

Episode Date: June 3, 2024

Ontario Premier Doug Ford has announced the province will pay at least $225 million to get beer and wine into corner stores over a year ahead of schedule. But why does the province need to pay at all, and why has Ford spent so much time and energy on this issue over his six years in power?Our Ontario provincial affairs reporter Mike Crawley joins us to explain the massive payment, Ford’s political history with alcohol sales and how the new announcement may tie into rumours that an early election is on the horizon.Help us make Front Burner even better by filling out this audience survey.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Jamie Poisson. Last week, Ontario Premier Doug Ford announced that beer and wine will be sold at corner stores and grocery stores across the province this coming September. That is actually much sooner than Ford originally promised, over a year ahead of schedule. And because of that timeline change, it's actually going to cost at least $225 million.

The taxpayers of Ontario could be paying half a billion dollars so that this premier can get out of a contract a year early. It's a billion dollar booze boondoggle. This announcement is actually a campaign promise that goes back to 2018. The year that also brought the promise of how can we forget? Buck a beer. You know, we put this out there. It's important, but here, health, education, everything's important. All I heard everywhere I went was buck a beer, buck a beer, buck a beer.

Today, we are going to look at these booze-focused announcements, what they tell us about Ford's political brand and how this might all relate to a much-buzzed-about early election call in Ontario. My colleague Mike Crawley is here. He covers Ontario politics, and he is going to talk us through it. Hello, Mike. Hi, Jamie. It is a pleasure, as always, to have you here. So, Ontario Premier Doug Ford's push to get beer and wine into convenience stores ahead of schedule

is going to cost people in Ontario at least $225 million. Why? At least. So the $225 million is because the beer store, the place where Ontarians have got their beer for generations, owned by some big multinational brewers that own, in turn, some big multinational brewers that own in turn Labatt, Molson, and Sleeman, they've got an exclusive contract that's valid until the end of 2025 that basically limits places where beer can be sold. And so this contract was signed by the previous government in Ontario. And while it allowed some supermarkets to sell beer, wine, it actually limited it to just 450 supermarkets around the province. And so the reason why the government's paying the beer store

$225 million is to break that contract basically 16 months early. So, Mike, if this deal was meant to expire in 2025, why not just wait until then, then roll out the plan? Like, it's kind of around the corner. It's a really good question, Jamie. The only thing it seems to be just to get it to happen sooner. You know, Doug Ford doesn't have a really good explanation for the why, because, talks about the money going to the workers, this idea somehow it's going to save workers' jobs at the beer store. We're here to support the workers at the beer store. We're creating 8,500 new stores, thousands and thousands of jobs. The LCBO is going to be the wholesaler. They're going to

bring in a couple hundred million dollars more. But in exchange for the $225 million, all the beer store has to do is keep a certain number of locations open until the end of 2025. After that, they could close them all down. So effectively, Ontario taxpayers are paying $225 million just to get beer in convenience stores 60 months ahead of schedule. Are we hearing any speculation as to why he's trying to do this 60 months ahead of schedule?

Oh, there certainly is some potential political upside for him because, look, it's a very popular thing. One of the things you don't see is the opposition necessarily saying, oh, no, no, no, we don't want beer in the corner stores. It's just they're questioning why the rush. beer in the corner stores. It's just they're questioning why the rush. And so the speculation is, is that, you know, Doug Ford's trying to make good on an election promise he made a long time ago so that he could potentially call an election earlier. Right. And I want to loop back to that potential early election call in a couple of minutes. But first, liberal leader Bonnie Crombie is calling this announcement a billion-dollar booze boondoggle, which is quite a big difference from $225 million.

His government is giving a billion dollars, a billion of your money to big brewers, major grocery chains, and big box American stores just to get beer in the stores one year early. She wants the true cost of the deal to be investigated. And so, you know, why is she saying that? Why is she saying that this is like a potentially a billion dollar price tag? Yeah, because there's going to be more cost to Ontario taxpayers, or actually, you can look at it the other way, more revenue that Ontario taxpayers are going to forego as a result of the deal. So I looked into this as well, and I got my hands on a document that actually

comes from the LCBO, the provincial liquor store here. And its own projections have the Ontario government basically losing out on anywhere from $100 to $150 million every year in foregone revenue, basically because of this deal that's going to allow the sale of alcohol in a bunch more places, basically a bunch of places that are going to be able to compete with the LCBO. So there's that amount that Doug Ford wasn't talking about. I've also found out that there is within the deal, uh, an arrangement for some rebates and discounts that are given to the brewers and to the, the new retailers. And I spoke to some folks in the industry, and basically that adds up into the neighborhood of $200 to $250 million more per year. So, you know, you add on those figures on

top of the $225 million that we know about that's being paid out, and it starts to add up. Right. This idea that it's a lost revenue argument that the liberals are making in addition to the cost that has to be paid out on the contract, right? Yeah, and it's not just the liberals that are making that argument. I mean, the LCBO admits it itself. So that's definitely going to be a factor. It's going to hurt the provincial treasury. I've also seen some retail analysts say that once the beer and the wine goes into these corner stores and grocery stores, it actually might be more expensive when it gets there because space is at like a premium, right? And we could see markups from 20 to 40 percent.

And there are also new recycling rules. So grocers of a certain size will need to set up their own recycling in the store. So it sounds like there are quite a bit of challenges ahead for this plan, right? I mean, if you've ever bought anything in a convenience store, Jamie, you know that it costs more than if you buy it at the supermarket. You're paying for convenience, right? So I think that only makes sense. There may be some competition that drives down some prices. But there's the recycling factor as well. The grocery stores aren't really thrilled about the fact that they're going to have to accept empties,

especially once the deal with the beer store is over and the beer stores could all start closing. All of those big grocery stores are going to have to collect people's empties. So these changes we've been talking about, they were an election promise from 2018. But that wasn't the only one related to booze, right? So if we could just go down memory lane for a moment. I remember that year Ford had this presser inside this big Ontario brewery with like stacks and stacks of beer cans behind him. And he told Ontarians that he was bringing back a buck a beer. Everyone wants lower

hydro, what we're doing. Everyone wants less regulation. Everyone wants lower taxes that we're doing. But a simple thing like a buck a beer, it goes a long way. But we didn't actually get $1 beers, right? What happened? So one thing to remember is that Doug Ford wasn't promising that people were going to sell beer for $1. He was promising to lower what's called the floor

price, the minimum price. So change some regulations. It had been in place since 2008 that had upped the minimum price to $1.25. So all he did was lower the minimum price. Most breweries said, we can't afford to make decent beer at a dollar a can. There were only a couple of breweries that tried, and about six months afterwards, there was literally just one brewery selling one kind of beer for a dollar. You mentioned before that these are popular policies. Just flesh that out for me a little bit more. Why has the Ford government focused so much on these alcohol sales changes, on the cost of beer? You know, why?

The popularity is clearly a part of it. You know, I think a lot of Ontarians have complained for a long time that, unlike Quebec, right next door, where you can pop to the Dépannard and buy your beer or your wine, that you can't do that in Ontario. And so, you know, the you can't do that in Ontario. And so, you know, the convenience aspect of things is clearly popular. But I think there's also something, let's just say ideological here with Ford. He doesn't like government regulations interfering with, you know, the free flow of business.

And so I feel that the regulations that restricted, you that restricted beer sales to various locations irked Doug Ford. And so he's been saying since 2018 that he wanted to get rid of these restrictions and to allow the sales in convenience stores. But back in his first government, he was confronted with how much it was going to cost to break that contract with the beer store and basically check it out. Talk to me a little bit about the criticism that he's getting from the other side here, right? That they are, you know, investing quite a bit of political capital and energy into this at the expense of other things. You know, what Ford would say is you can, you know, you can walk and chew gum at the same time. You can do, you know, multiple priorities. But, you know, the cost here, I think,

is really the key thing, Jamie. You know, what could the government be spending that $225 million on? What could that foregone revenue go to? I want to ask the Premier how he could possibly think that spending $1 billion to expedite beer and alcohol sales should be his priority instead of solving the family doctor crisis. I want to know why is this Premier pouring money into the pockets of these big alcohol corporations while our emergency rooms are closing. You know, opposition parties and various critics of Ford's are saying, you know, you've got long wait times in hospitals. You've got, you know, schools where the roofs are leaking. You've got, you know, challenges with getting enough transit built. All that kind of stuff should be a greater priority for the Ford government, is what folks are saying.

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June 2026 date or rule out an early election. He was asked three different ways, three different times and did not rule out an early election. And are you planning to use this to get this out of the way, get it implemented and call an early election? No, what we're doing is keeping a promise, Rob, but thanks for the question. So are you committing then to sticking with the June 2026 election schedule? You're going to stick to that date? We're going to make sure that we fulfill our agenda. I want to try this one more time about the election date.

Are you committed to June 2026 or should Ontarians be preparing for something maybe sooner? Well, we're committed to getting our agenda through and making sure that... So that just sent what had been some sort of quiet rumblings about the possibility of an early election. That sent that, you know, right off the Richter scale. What do you think he's weighing here? Like, it's obviously not just about beer, so... Yeah, so from the folks that I've spoken to, the timing of the election is really key for Doug Ford for one main reason. It's about having Justin Trudeau as the prime minister, as an unpopular prime minister, as a potential foil to campaign against.

that I spoke to have said that there's various reasons why it would be advantageous, politically advantageous to Doug Ford to call an election while Justin Trudeau is still prime minister. One thing is Trudeau's unpopularity and the ability for Ford to talk about things like the carbon tax and blame Trudeau for a bunch of people's problems and associate that with the Ontario Liberals who could be potentially Ford's biggest rival. Another thing, though, Jamie, is this fascinating habit of Ontario voters to vote opposite from the party that's in power in Ottawa. So interesting. When I went looking back through this, I knew, you know, I knew this was a trend. I was just gobsmacked by how strong it is. You look back over the last 60 years,

so basically 16 of the last 17 Ontario elections, the province has not voted for the party that's in power federally. Huh. That is so interesting. I didn't realize it was as high as it was. And just tell me a little bit about how well the Ford government is doing on its own merits right now. Like, are they polling well? Are they doing well? The polls that I've seen seem to suggest a fairly strong support for Doug Ford, basically enough that the PCs would win another majority. You know, you don't know how much of that is, you know, the federal liberals drag on Bonnie Crombie and her

party, how much of it is, you know, related to folks not actually knowing much about the opposition leaders. You know, both of them, both the NDP and liberal leaders are rookies, haven't contested an election against Ford yet. But certainly the polling seems quite good for Doug Ford and the PCs. For people who might be watching the Blue Jays right now, there are a lot of ads that are popping. I'm sure it's not just in Blue Jays games, but there are a lot of ads for the Ford government right now.

I guess one thing that tells me is that they seem to have money. But what does it tell you? Yeah, over the last six months, Jamie, there's been a bunch of ads by the Ontario PC party attacking Liberal leader Bonnie Crombie, boosting up Doug Ford. There's an ad out there that has him talking on the cell phone to, you know, allegedly to voters, you know, a very soft image of Doug Ford as, you know, the as the guy who'll talk to the people of Ontario. Hi, it's Doug Ford. Just giving you a call back. Well, it's the people. That's what gets me up every single morning. Really busy, busy. Morning to night. I'll be there in a little bit. Thank you. You take care. And there's also been a big ramp up of Ontario government ads basically talking about how great life is in Ontario. What if we told you there's a place where it's all happening? A place where more people are going to work than ever before.

And so, you know, you put all of those things together. Some of those Ontario government ads, they were running during like the Oscars and the NHL All-Star Game. These are crazy slots. Yeah. And so, you know, the Ford's government and the PCs have been doing quite a lot to try to boost public opinion in that way. Looking at the other side of this, what kind of risks do you think he's taking by calling an early election? What kind of risks do you think he's taking by calling an early election? So the strategist I spoke to said that the biggest risk for Ford is if people see the early election call as self-serving. If the only reason for the early election call is that it's to Doug Ford's political advantage.

And there is a risk of blowback there. People point to the last time in Ontario that a premier with a majority called an election, you know, partway through their four-year mandate. You got to go back to 1990, that was David Peterson for the Liberals and he lost to Bob Ray and the NDP. So, you know, there is that risk. So in that sense, the strategists say

what Ford has to do is both show that he's delivered on his mandate from the previous election, that he's got stuff done, right? His election campaign slogan was get it done. So has he gotten stuff done? Yeah. Has he gotten beer in the corner stores? Exactly. That would be one of those promises. The other question, though, is what's the reason for the new election? So you've got to give people a compelling reason for that new election. One question I have for you is that the RCMP is, of course, investigating a big scandal connected to the Ford government's decision to open up a part of the Greenbelt to developers. And two government watchdogs have found that that process to select which lands were removed from the Greenbelt favored certain developers. Two of his ministers had to resign over this. This was a big deal. I made a promise to you that I wouldn't touch

the Greenbelt. I broke that promise. And for that, I'm very, very sorry. I pride myself on As many people will remember his government reversed course, but might an early election be influenced at all by the criminal probe? Like, I don't know, an attempt to go to the polls before a result, for example. that. I imagine not. But, you know, clearly the sooner an election is called, the less time there is for the RCMP to get to a stage of deciding whether there are charges that would be laid if charges are warranted. Yeah. And another big issue that I hear a lot of people talk about in Ontario is housing, right? And housing starts are down. Economists say that could continue. And is the government, is the Ford government going to have a hard time convincing people they're making progress on such a pivotal issue? Yeah, I think housing is probably the biggest of the, you know, get it done promises that they're at pretty high

risk of not having gotten done. The housing start numbers in Ontario are actually nowhere near what the pace would need to be to meet Doug Ford's promise of one and a half million new homes over a 10-year period. And there's no sign that they're going to speed up anymore. So that's definitely a risk. I think there's a few other things that Ford promised to do in the 2022 election campaign that, you know, arguably they're not going to have made much progress on, you know, a year from now. I'm hearing that if there is an early election, it would likely be in the spring of 2025. And housing is clearly the biggest one of all of those. All right. Well, Mike, lots for us to keep our eye out for. Thank you so much for this.

This is great. It's always such a pleasure to have you. I'm always happy to be on FrontBurner, Jamie. All right, that is all for today. I'm Jamie Poisson. Thanks so much for listening. Talk to you tomorrow. For more CBC Podcasts, go to cbc.ca slash podcasts.