• By: Dan Donovan

Opposition Leader Tim Hudak says with Ontario facing unprecedented job losses and a massive deficit, six million in bonuses to LCBO management is wrong

Premier Dalton McGuinty recently announced that the Ontario government is considering selling off crown assets such as the LCBO to reduce the deficit. Ontario PC Leader Tim Hudak is convinced that such a move is not the right way to go.

“Selling off crown assets is the wrong approach to deal with out of control government spending”. Hudak sees McGuinty’s plan to sell the LCBO as a final act of desperation. “Mr. McGuinty’s move to sell off the LCBO comes out of a need to address his reckless spending,” he explains. “A panicked fire sale is not going to solve Dalton McGuinty’s money problems. He has no credible plan to get Ontario’s economy back on track.”

Hudak sees concerns with the LCBO monopoly as symptoms of a greater flaw. “I think that sadly after six years in office, the McGuinty government has run out of gas. Their tax-more, spend-more and regulate-more policies have brought Ontario to a new low as a have-not province.”

Hudak is not impressed with the six million dollars in bonuses that were awarded to LCBO management in 2008. “During these challenging economic times, where we’ve seen unprecedented job losses and a massive deficit, six million in bonuses to LCBO management is wrong,” Hudak says. “We have always maintained that public sector contracts need to reflect private sector realities. Right now, we’re saddled with a $25 billion deficit, more than all the other provinces and territories combined-thanks to the reckless spending of this Liberal Government. Ontario taxpayers should never pay for Dalton McGuinty’s waste, mismanagement, and pay-outs to Liberal friends and insiders.”

The Ontario PC Leader points out that LCBO bonuses are just one of many examples of taxpayer money being mismanaged by McGuinty’s government. “Whether it’s a $750,000 pay-out to the former CEO at OLG, a $114,000 bonus to the eHealth CEO after just 4 months on the job, followed by a $317,000 pay-out when she was fired, or the channelling of excessive salaries through hospital budgets for Ontario bureaucrats, it is apparent that Dalton McGuinty is using public agencies as his own slush fund for Liberal friends and insiders.”

Hudak places the infamous $7 billion deal with Samsung high on the list of McGuinty’s sins. When McGuinty passed legislation for the Feed-in Tariff program under The Green Energy and Green Economy Act in May 2009, he promised to give green energy developers in the province an equal opportunity to develop renewable energy technologies while receiving stable prices under long-term contracts. Soon after the Feed-in Tariff program came into effect, he signed what Hudak refers to as “a back-room, secret sweetheart deal” with Samsung’s South Korean consortium, granting the multinational corporation a monopoly over the province’s green energy market.

In return for Samsung’s $7-billion dollar investment in the construction of four renewable energy manufacturing plants which will generate 2,500 megawatts of wind and solar energy, Ontario agreed to allocate 500 megawatts of transmission capacity off of the grid and pay a $437-million bonus. According to Hudak, this bonus will mean significantly higher energy costs for Ontario ratepayers. The deal also means that producers in Ontario have been overlooked to support a foreign-based, multi-national corporation. “What Dalton McGuinty did, was he exported those jobs in technology and development to Korea, instead of having them in our province.”

The PC party has called in the Auditor General to review whether taxpayers are getting a good deal, but Hudak is already convinced that Ontario rate-payers and businesses are getting the short end of the stick. “What would be fair to those who are in the industry is a level playing field,” Hudak states. “If there is a private sector supplier who wants to put energy on our grid, they should be able to do so in a fair and open marketplace and in a transparent way so that we would get the energy supply at the best price for Ontario rate-payers.”

Hudak says that the Samsung deal “will put a chill on the confidence of Ontario-based companies to do business with the government… and it means that hydro bills for senior citizens and small businesses are going to go up.” His solution? “I think we need to get the cost of the public service in line with the ability of the private sector to pay. Some of the collective bargaining agreements that McGuinty has signed don’t reflect what’s happening in the private sector, especially in this recessionary environment.”

How does this factor into the privatization of the LCBO? Much like the Samsung deal, which puts local companies at a disadvantage, the LCBO prevents local wineries from being able to compete with other producers in the wine industry. “In Niagara, where I am from, Ontario wineries are restricted to operating a single store at the vineyard and praying for limited shelf space at the government operated LCBO, dramatically limiting Ontario consumers’ ability to purchase local product,” Hudak explains.

In 2008, Hudak released a report detailing steps the provincial government could take to help Ontario wineries and grape growers. One of the recommendations was for a parallel system of private retail stores that specialize in Ontario VQA wine to open up in Ontario. In 2005, he tabled a Private Member’s Bill calling for just that. The Liberal government voted it down.

Hudak points out that it is McGuinty’s irresponsible spending that has allowed the LCBO to be compromised. Simply selling it off will not solve the greater issues. “The concern I have is that Dalton McGuinty has brought the province to such financial straights that he may be looking at a fire sale of the province’s assets to try to balance the books for one particular year. It doesn’t solve the underlying problem of a runaway deficit caused by program spending.”

Hudak proposes a solution: “I always think that it’s important to look at government services like the LCBO and say, ‘is there a better way of providing the service? Is there a better return for the taxpayer? Can we supply a higher quality product?’ It’s always important for us to examine those things,” he explains. Rather than privatizing the LCBO, he suggests that we re-evaluate how funds are used in the system, and ensure that taxpayers are getting the best deal possible. “In Ontario, the wine industry has a direct impact on the agriculture and tourism industries. The LCBO must increase the presence of award-winning Ontario wines and micro-brews, while continuing to support the safe and responsible sale of wines, beers and spirits,” Hudak explains.

At the end of the day, it’s hard to say whether the LCBO will stay or go. While all party Leaders seem intent on keeping the liquor board under provincial control, do we taxpayers see it as an asset or as an inconvenience? The solution is not simple, perhaps something to ponder over a glass of Ontario wine.