LCBO and the HST

[Ukie]

Its not exactly revelation but:

http://www.thespec.com/Business%20News/article/768685

[shintriad]

The comments in the Star are all very anti-Liberal, pro-privatization. Almost shocking how much consensus there is. You'd think "the movement" would have a little more steam by now:

http://www.thestar.com/news/ontario/hst ... ng-up?bn=1

[Belgian]

the LCBO has quietly increased its mark-up by 7.5 per cent.

Because the state-sanctioned LCBO markup IS to some extent already a 'tax' they have effectively just replaced one lowered tax by increasing another.

But WHY?

Household disposable incomes are already dropping about $400/year thanks to the HST. That's huge!! Why are they imposing a 7.5% price increase on TOP of that? If we're already short of cash to spend at the LCBO, why are they hitting us a second time at the cash register? Imagine the beer you could buy with $400 - they are taking that much beer away from you, AND another 8 per cent of everything you'd buy in a year.

I think this kind of tax reform is bogus and always ends up in cash-grabs & our governments wanting it all fifteen ways. Intellectually dishonest. No integration or cohesive planning whatsoever. Grab, grab, grab.

It's a DOUBLE tax. Pure and simple. Another good reason to shop in Buffalo!

[Belgian]

Oh yeah - and we'll just SEE how many retailers simply 'hold the line' with their existing pricing. If the Euro replacing the Deutsche Mark in Germany was any indication, retailers are just as happy to place the same number on the price tag - even if this effectively means charging double.

I can't get over how low prices and sales tax are in Buffalo...

[Kel Varnsen]

Oh yeah - and we'll just SEE how many retailers simply 'hold the line' with their existing pricing. If the Euro replacing the Deutschmark in Germany was any indication, retailers are just as happy to place the same number on the price tag - even if this means charging double.

I can't get over how low prices and sales tax are in Buffalo...

Well considering how prices for just about everything stayed the same when the GST was lowered I imagine the same thing will happen here. I remember CBC in Ottawa I think (or possibly Marketplace) did a story about things with fixed prices didn't change. The City of Ottawa made hundreds of thousands of dollars when the GST dropped since for example the price for parking at a parking meter or city parkade had the GST included, but when the GST dropped the price stayed the same.

[Bobbyok]

It's a DOUBLE tax. Pure and simple. Another good reason to shop in Buffalo!

It was a worse double tax before. Without the change, businesses had to pay Provincial Sales tax on their purchases, which would have been passed on to consumers as a cost of doing business. By shifting to a value-added tax, while business still pay PST on everything, whatever they pay gets deducted from whatever they collect when it comes time to remit those sales taxes to the government. While you won't see an immediate decline in prices, in Atlantic Canada (NS, NB, and NL switched 15 years ago) prices ultimately did decline over time as a result of the change.

[kwjd]

It's a DOUBLE tax. Pure and simple. Another good reason to shop in Buffalo!

It was a worse double tax before. Without the change, businesses had to pay Provincial Sales tax on their purchases, which would have been passed on to consumers as a cost of doing business. By shifting to a value-added tax, while business still pay PST on everything, whatever they pay gets deducted from whatever they collect when it comes time to remit those sales taxes to the government. While you won't see an immediate decline in prices, in Atlantic Canada (NS, NB, and NL switched 15 years ago) prices ultimately did decline over time as a result of the change.

That is true of prices overall. Prices of alchol will not drop though because of this stupid "social responsibility" BS.

[Bobbyok]

It's a DOUBLE tax. Pure and simple. Another good reason to shop in Buffalo!

It was a worse double tax before. Without the change, businesses had to pay Provincial Sales tax on their purchases, which would have been passed on to consumers as a cost of doing business. By shifting to a value-added tax, while business still pay PST on everything, whatever they pay gets deducted from whatever they collect when it comes time to remit those sales taxes to the government. While you won't see an immediate decline in prices, in Atlantic Canada (NS, NB, and NL switched 15 years ago) prices ultimately did decline over time as a result of the change.

That is true of prices overall. Prices of alchol will not drop though because of this stupid "social responsibility" BS.

Yes, but Belgian seemed to be suggesting that the move to HST generally was a double tax, not just the LCBO move. Perhaps I misunderstood.

[kwjd]

It was a worse double tax before. Without the change, businesses had to pay Provincial Sales tax on their purchases, which would have been passed on to consumers as a cost of doing business. By shifting to a value-added tax, while business still pay PST on everything, whatever they pay gets deducted from whatever they collect when it comes time to remit those sales taxes to the government. While you won't see an immediate decline in prices, in Atlantic Canada (NS, NB, and NL switched 15 years ago) prices ultimately did decline over time as a result of the change.

That is true of prices overall. Prices of alchol will not drop though because of this stupid "social responsibility" BS.

Yes, but Belgian seemed to be suggesting that the move to HST generally was a double tax, not just the LCBO move. Perhaps I misunderstood.

I understand what you meant, I wasn't trying to imply I disagreed with you. I was just adding on the bit about the LCBO prices specifically do not apply to what you said.

[Rob Creighton]

"On Wednesday night, finance ministry officials insisted any retail price changes are to offset a $24 million tax break to licensees that was handed over in January to soften the blow of the HST"

Keeping in mind that the Liberal gov (or any for that matter) are not going to come out of this on the negative, you will see beer (and wine) increases from the all new Ontario Beer & Wine Tax.

For craft brewers it will provide a manufacturers tax (ie: hidden from the publics eye) that will replace our present $4.06 / hectolitre tax with a split tax where we pay $18.26 for draught beer and $19.76 for bottled or canned beer. It turns out the HST has offered the bureaucracy multiple venues to generate more funds. I'm shocked

[cfrancis]

The problem here is more LCBO rather than the HST.

The HST over three years the competition will bring the price down and savings will be eventually passed on to consumers.

But the LCBO because it's a monopoly, has no competition so they can continue to charge whatever the hell they want. And in this case, increase the price since there really isn't an alternative for consumers to buy from that would force LCBO to "compete".

The LCBO really has run it's course in Ontario. I live in Ottawa and buy most of my alcohol in Quebec because the immense price differences. People in Southern Ontario go to Buffalo. But the % isn't high enough to affect the LCBO and their bottom line.

[Kel Varnsen]

But the LCBO because it's a monopoly, has no competition so they can continue to charge whatever the hell they want.

I think LCBO has some competition in the way of bars and restaurants. I mean yes it is more expensive to drink at a bar but it is another way to drink.

One thing I would love to see Ontario allow is for bars to have off sales (basically bottled beer to go that you can buy from a bar tender, usually more expensive then the liquor store but cheaper than drinking in the bar and available whenever the bar is open). They have had this in BC for as long as I was able to get into bars. I think it is an easy way to make beer more available to people without people freaking out. I mean bars are already responsible for checking ID's at risk of losing their liquor licence, so it is not like beer sales at a corner store where there is an increased risk of kids buying. Sure most bars would probably only sell sixes of Canadian, but it would give the bars that wanted to the option to sell other stuff. I mean it is ridiculous that the Clocktower brew pub in Ottawa can't sell you bottles of their beer to go. And how cool would it be if that pub owned by Churchkey could sell you bottles of their beer or if Pub Italia in Ottawa or some of the beer bars in Toronto could sell bottles of the specialty beers they stock, or if they could fill growlers. It seems like such a simple but obvious change I wonder if there is any actual push for it?

[Bobbyok]

But the LCBO because it's a monopoly, has no competition so they can continue to charge whatever the hell they want.

I think LCBO has some competition in the way of bars and restaurants. I mean yes it is more expensive to drink at a bar but it is another way to drink.

Um, where do bars and restaurants in Ontario buy their booze?

[Kel Varnsen]

But the LCBO because it's a monopoly, has no competition so they can continue to charge whatever the hell they want.

I think LCBO has some competition in the way of bars and restaurants. I mean yes it is more expensive to drink at a bar but it is another way to drink.

Um, where do bars and restaurants in Ontario buy their booze?

See this has always confused me. I mean do all bars and restaurants really buy all their booze from the LCBO? Then why when I read things like the blog on the Beau's website do they talk about having accounts and making deliveries directly to bars? Is the LCBO acting like a middle man in this situation and taking a cut for doing nothing at all?

[Bobbyok]

I think LCBO has some competition in the way of bars and restaurants. I mean yes it is more expensive to drink at a bar but it is another way to drink.

Um, where do bars and restaurants in Ontario buy their booze?

See this has always confused me. I mean do all bars and restaurants really buy all their booze from the LCBO? Then why when I read things like the blog on the Beau's website do they talk about having accounts and making deliveries directly to bars? Is the LCBO acting like a middle man in this situation and taking a cut for doing nothing at all?

That's how it works here. The NSLC is the only place allowed to wholesale or import alcohol. If it enters the province and gets sold, they get a cut. If it gets made in the province and gets sold, they get a cut. And bars and restaurants don't get a discount as far as I know - which is one reason why it costs so much more than retail.