TORONTO – There will be no “extreme measures” in the upcoming Ontario budget as the government moves to eliminate a $10.9-billion deficit, although there will be changes to the way beer is sold, says Finance Minister Charles Sousa.
“I can assure you that change is brewing in Ontario,” Sousa said Tuesday when asked about the Beer Store’s virtual monopoly on
sales in the province.
Details will have to wait for the April 23 budget, he added.
Job creation is the top budget priority, insisted Sousa, who said a “large component” of his fiscal blueprint will involve possible asset sales in addition to the changes to alcohol distribution.“It’s all about creating more jobs and economic growth, and the entire budget of 2015 will be around that very issue,” Sousa said.
“Part of that is to unleash and harness the values of our Crown corporations.” A government-appointed panel chaired by former TD Bank chief Ed Clark has been looking at assets such as Hydro One, Ontario Power Generation and the Liquor Control Board, and Sousa said it will be releasing its report before the budget.
The Liberal government has been signalling for months that change is coming to alcohol distribution and the Beer Store, a foreign-owned consortium.
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Any money raised from a sale Crown corporations, including a portion of Hydro One, for example, would go towards the Liberals’ 10-year, $130-billion plan to invest in infrastructure, said Sousa.
“We have a requirement to invest in infrastructure, in roads and bridges and public transit, and that means finding ways to fund it, and one of those ways is to unlock the value of some of our Crown corporations today,” he said.
Clark rejected privatizing the LCBO in an interim report, and recommended the Beer Store give taxpayers a “fair share” of its profits or have the government auction off its virtual monopoly if
the consortium won’t pay a so-called franchise fee. Sousa declined to say if the Beer Store had agreed to do so.
Ontario craft brewers say their market share is held back by the Beer Store, which makes it difficult – and expensive – for them to
sell their products in its 448 retail outlets.
Premier Kathleen Wynne has not ruled out selling shares in Hydro One, but said whatever the government decides based on Clark’s
recommendations, it will control prices and make sure regulatory regimes “that protect Ontarians” stay in place.
The government is struggling to eliminate a $10.9-billion deficit by 2017-18, and Sousa insisted the target can be achieved despite persistent skepticism from financial analysts, credit rating
agencies and opposition parties.
“We’re going to do it in a balanced approach that’s going to enable us to come to balance by 2017-18, not by taking extreme measures or putting anyone in harm’s way, but by enabling us to
invest in their future,” he said.
The deficit was up slightly from last year’s $10.5-billion shortfall, which the opposition parties warned is a trend in the wrong direction.
Ontario’s fiscal plan will be tabled just two days after the federal budget is introduced in Ottawa.
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