Doug Ford's change to booze sales could cost far more than $225M

Premier Doug Ford's push to get beer and wine into convenience stores ahead of schedule will cost Ontario taxpayers at least $225 million, but there's evidence the full price tag actually adds up to hundreds of millions more.

When the Ford government announced that it will pay the multinational owners of The Beer Store to allow what it calls "early implementation" of the expanded alcohol sales, it did not disclose the cost of other key components of its plan. Those components include:

Official figures from the Ministry of Finance and the LCBO obtained by CBC News on Monday show the province is facing a net revenue loss of $150 to $200 million per year as a result of the changes, in addition to the Beer Store payment.  

The Ontario Liberal Party claims the costs will add up to $1 billion in direct payouts to the Beer Store, grocery chains and convenience store owners, as well as foregone revenue for the LCBO.

"It's a billion-dollar booze boondoggle," Liberal Leader Bonnie Crombie said Monday during a news conference at Queen's Park.

Crombie and the Liberals base their $1 billion figure on these additional costs:

Those amounts would be on top of the LCBO's lost revenue from selling less alcohol through its own stores and on top of the $225 million payment to The Beer Store. 

The Liberals are asking both Ontario's auditor general and the Legislature's Financial Accountability Office to investigate the true cost of the deal.  

"Doug Ford has shown time and time again that he's in office to cater to his wealthy, well-connected insider friends at the expense of the people of Ontario," Crombie said. "The guy who promised yet failed to deliver buck-a-beer is now blowing a billion dollars on booze." 

The Liberals' figures don't take into account the fact that the LCBO will bring in additional revenue by becoming the sole wholesaler to the thousands of new retail locations in grocery and convenience stores, said a Ministry of Finance official. 

"This is all net new revenue," said the official. 

A confidential projection obtained by CBC News shows the LCBO expects to rake in an additional annual amount ranging from $900 million to $1.17 billion as wholesaler to the new retail outlets. 

However, the same projection shows the LCBO expects the changes will knock anywhere from $600 million to $915 million per year off its retail revenue — and reduce the government's annual tax take by about $400 million.

That makes the impact of the changes a net loss of $98 million to $150 million per year, according to the LCBO projection.