We Had a Pint with Ontario’s Finance Minister to Talk About Crappy Booze Rules

VICE's Justin Ling spoke with Ontario Finance Minister Charles Sousa.

The government of Ontario dropped new changes to the province's heavily-regulated liquor industry last week. But, despite being touted as "radical," you still won't be able to buy beer at your local corner store.

Critics, including the federal government's champion for modernizing Canada's liquor regime, say the announcement is largely a failure.

The changes mean some grocery stores will be licensed to sell beer over the coming years, growlers will finally be stocked on store shelves, The Beer Store will be forced to sell more craft brews, and more provincial liquor stores will carry 12-packs. But, on the negative side—taxes on beer are going up.

Though critics suggest they are just tinkering, Kathleen Wynne's Liberal government might begin to crack the door open for other provinces to reduce the regulatory puritanism for buying booze.

VICE sat down with Ontario Finance Minister Charles Sousa to figure out if this is the big deal the Liberals claim it is.

The largest part of the plan is expanding beer sales to the province's grocery stores, which is an idea that has proved wildly popular. There are, however, three huge caveats: the stores can only sell six-packs and individual beers, the stores will only be able to sell $1 million in beer per year, and there will only be 450 beer-laden grocery stores allowed to operate across the province.

The changes come from recommendations in the Premier's Advisory Council on Government Assets.

The province currently has three types of liquor stores—the LCBO, which can sell spirits, wine, and beer (though only six-packs and singles of the latter); The Beer Store, which can sell two-fours and 12-packs; and a series of private wineries, which largely only sell Ontario wine.

The Progressive Conservatives had campaigned on opening up beer sales to grocery stores during the last election, while only the Green Party endorsed ending The Beer Store monopoly.

Of those 450 grocery stores that will soon be allowed to sell beer, only 150 stores will be stocking the shelves with beer by May 31, 2017. They will be located in "urban population centres."

The sales cap means each store will only be able to move about 85,000 cases of beer a year. Which isn't a lot. By way of comparison: each Beer Store in Ontario moved roughly 200,000 cases (including 12 and 24 packs) in 2012.

Sousa says the plan is a win-win.

"We've been able to protect the price while are the same time broadening distribution and convenience," he told Daily VICE over a pint of beer from Great Lakes Brewery at Bar Hop, in downtown Toronto.

Obviously, many were hoping that the focus would be more on convenience, and that the Wynne government would open up beer sales to convenience stores. VICE asked Sousa why Ontarians, unlike their Quebec neighbours, still face prohibition in their neighbourhood corner store.

"We also have another responsibility," Sousa said. "And that's one of social responsibility."

He said that groups were worried about booze ending up in the hands of children, and that was the biggest roadblock to completely reinventing the system. Sousa also said that limiting distribution keeps costs down.

Some prices, though, will be going up.

To compensate for making things better for people who want to drink beer, the premier has slapped a new temperance tax on the hoppy goodness. The price of a two-four will be hiked 25 cents every year for the next four years.

The biggest brewers, however, will be forced to maintain a price freeze for two years. That means that you'll see the price of smaller breweries and craft ales go up, but Labatt and Canadian will be the same price.

But don't worry, the government press release swears, "Ontario consumers will pay prices for their beer that are at or below the lowest prices in Canada."

Sousa underlined that: he says his government was cautious not to turn Ontario in British Columbia or Alberta—where private retailers mean Westerns can pick up liquor just about anywhere, and late at night—and where "it costs almost six bucks more a two-four."

Ontario Beer Facts, a lobby campaign paid for by the Beer Store, backs that up, noting that Ontario has some of the cheapest beer in Canada (except for Quebec, where "prices were almost equal," meaning that Quebec beers are a third cheaper).

Those numbers, however, are suspect. Most cases of beer in BC cost roughly the same as in Ontario. And there's no real evidence that the deregulation scheme in those provinces—as opposed to taxes or transport costs—are the reason why beer is pricier, if it is actually pricier.

Last week's announcement, however, is a victory for craft brewers. For years, they've been virtually shut-out of The Beer Store, which is Ontario's multi-national beer monopoly. Owned and operated mostly by Molson and Labatt, with Sleeman Breweries owning a small slice of the company, the store has become a symbol of hapless Soviet-style management.

The Toronto Star has reported how the Beer Store has leveraged political favour in order to keep their sweetheart deal, at the expense of consumers and small breweries that have sprung up across the province in recent years.

The Wynne government will now be requiring The Beer Store to give 20 percent shelf space to craft breweries. Currently, the requirement is just seven percent.

Some small restaurants will soon be allow to buy beer at cheaper prices thanks to last week's changes.

But Thursday's announcement has no impact on how wine and spirits or sold. It is, for example, still impossible for wineries from the rest of the country to sell their products in Ontario.

Up until enterprising Conservative MP Dan Albas wrote a private members bill last year that changed things, it was still technically illegal to bring wine across provinces for personal use.

But with the federal restrictions out of the way, it's still up to the provinces to knock down their trade barriers. And they won't, for some reason, meaning it's virtually impossible to get Nova Scotia wine in Ontario, or vice versa.

VICE asked Albas whether the Ontario Government's announcement did much to impress him.

It did not, he said.

"Basically, this is a giant cash grab," Albas told VICE over the phone from his BC riding. "It will benefit the big corporate brewers."

Albas says that between the tax hikes, and the lack of action to break up corporate ownership of the big three brewers, the changes do very little positive, and may actually cement the power of the LCBO and Beer Store.

He notes that by only allowing a small number of grocery stores sell only a very small amount of beer, it's likely that those chosen, "golden," beer-carrying grocery stores will simply carry big-name brands that can handle mass distribution, further alienating craft breweries.

"It creates another beer monopoly," Albas says.

Albas says he hopes the Wynne government actually does something to reduce those trade barriers.

Sousa says the advisory council is looking at that—"that's the next phase of our review," he says—but Toronto has previously rejected the idea that Ontario would make it legal to buy wines from other provinces.

Every province except Manitoba and British Columbia maintain the protectionist barriers to importing wine. When it comes to deregulating liquor sales, only Alberta has privatized the approach entirely—a handful of other provinces maintain hybrid systems. Other provinces have considered loosening government control of the system, but Ontario is the only one in recent years to make any progress, no matter how minor it may be.

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