Ontario is in debt to the tune of $220 billion, projected to climb to over $240

billion next year. Will the LCBO be sold to rescue Ontario from debtorsâ prison?
If Ontario sold the wildly unpopular and mismanaged Crown agency tomorrow, for s
ay, $100 billion to the private sector, it could substantially reduce the debt b
y 45 percent. That would be a knock-out punch to address the debt as well as our
$25 billion deficit.
There would also be at least $300 million more a year, netted from better manage
d private sector sales, going into the provincial coffers, plus the additional t
ax yield that goes with it.
Instead of shaking itself out of its fiscal stupor and selling the LCBO public a
sset outright, the McGuinty government looks at penny ante schemes like privatiz
ing ServiceOntario. Thatâ s like a family swimming in debt deciding to hold a lawn sa
le instead of selling off the gas-guzzling Cadillac Escalade in the driveway.
Last year, the desperate, HST-lashed Ontario government toyed with the idea of s
elling public assets through SuperCorp to address the provinceâ s financial woes. Pub
lic assets including the LCBO, OGP Hydro One and the Lotto Corporation would hav
e been on the table for partial or phased sale.
The abandoned SuperCorp idea, would have put forward some of the public assetsâ wort
h in an initial public offering. This would have been just working around the fr
inges.
If the LCBO asset were put up today for an initial public offering, billions cou
ld be netted and applied to the Ontario debt. The book value of the LCBO is betw
een $20 billion to $30 billion, which would only be the starting price in the IP
O contest. Likely private firms would fall all over themselves bidding it up to
closer to $125 billion before the final gavel came down.
Instead we are stuck with a virtual booze monopoly that garners only $1.55 billi
on on $4.55 billion in sales. Meanwhile the three top LCBO executives, who work
against no completion, get a combined muscular paycheck of over $1.5 million to
deliver such flabby results. A private sector board of directors would have said
off with their heads in a flash.
Public assets will continue to be in focus regardless of which party takes the h
elm at Queenâ s Park after the election. The LCBO is clearly the elephant in the livi
ng room when it comes to public assets that should be put up on the auction bloc
k.
The public is clearly not in favour of maintaining the squandering LCBO status q
uo. Ontario is in debt up to its ears. You do the math.