Last weekend, a few friends and I decided to take an impromptu trip up to good ol’ Canada. Pretty baller, eh? Since this seems to be a week of rants, I figured I should add my desperate attempts at economic analysis to the list… plus who doesn’t like a little intellectual stimulation once in awhile?
Anyways, aside from the lake we’re staying on being obscenely buggy, me contracting pink eye from the lake, and well, the fact that it is Canada (and who can resist making a joke at Canada’s expense?), the trip has been incredible; albeit a vacation you ultimately need a vacation to recover from. One of the things that has really got my blood boiling, however, is the price of beer and liquor in Ontario.
My goodness, want to talk about absurd? Not only are there so few places to buy alcohol— we had to drive 25 minutes just to buy a case of beer— but it is outrageously expensive. Granted, we are pretty isolated from any form of civilized society, but c’mon now, all the more reason alcohol should be widely available.
When we arrived at this dingy store run by a cute, old Asian couple, we were shocked to find handles of liquor upward of $55 and cases of beer hovering around $40. If you even wanted to think about throwing a party, you’d have to take out a second mortgage on your house and offer your first born as collateral.
Now why, might you ask? You can sure bet I was asking. I mean, c’mon, you can brew beer in your basement for a sliver of that price (though you may not live to tell the tale).
While my understanding is still a little shaky on the subject, it seems to be the fault of the government (shocking, I know). In Canada, like in the US, alcohol is controlled on the provincial level. The government in Ontario took this as an opportunity to collect a 10% tax on liquor… just because they can. For comparison’s sake, Massachusetts doesn’t even have a liquor tax (granted it was only repealed as of January 2011).
In Canada, however, the taxes are only part of issue; the main issue is the Canadian government’s antiquated laws, which facilitate the formation of monopolies. This causes prices to rise due to minimal competition and increased privatization of the beer and liquor industry.
In Ontario, the Liquor Control Board of Ontario (LCBO)– aka the government— are the only ones legally allowed to distribute liquor from designated stores. In turn, they contract out control of the market to “The Beer Store” — mind you, as their name might suggest, the Beer Store can only sell beer… not liquor (still only the LCBO can do that). The Beer Store is made up of the three biggest beer producers in Canada: Molson, Labatt, and Sleeman. Is anyone else sensing a conflict of interest here?
While the LCBO strictly regulates the Beer Store from hours and locations, to a price minimum at $24 per case (which is only on super sale for beer grosser than Keystone— who thought such a terrible thing existed?), the beer industry is still well on its way to privatization. All the beer is in one place (not to mention the prices are hard to find in the store anyways), ensuring beer drinkers will take the majority of their business to the Beer Store. Every brewery that wants to be sold has to pay The Beer Store.
While the 10% tax in Ontario is large, if the money collected from the liquor tax was divided equally among every head in the province, Ontario “only” collects $143 per person. In comparison, British Columbia collects upwards of $200. This can largely be accounted for the total privatization of the BC retail liquor distribution— at least Ontario hasn’t gotten there yet. When you consider how few people drink (and even moreso how few drink like college students) that figure is increasingly astronomical.
Afterward, I went to the supermarket to satisfy my sweet tooth and the depression my empty pocket was inducing; I proceeded to venture into the ice cream aisle. For anyone who knows me, this comes as no surprise. In fact, my love for ice cream runs so true and deep, I made the decision on the spot to get all kinds of wild and crazy and invest in a pint of ice cream for the twenty minute drive home and a gallon of ice cream for our lakeside abode. When it came to examining the receipt, I realized the tub of ice cream was not taxed. Yet the pint of the same brand was taxed.
Apparently because one was big and considered mass purchase for commercial use (let it be known three of us finished it in one night), taxation was not required… the government clearly does not consider the possibility that there exists such a fine creature as a proud pantaloons in their country— I’m all American baby.
But really, shouldn’t alcohol follow the same principle?
Quebec (the home of Montreal for the geographically challenged) gives the wholesale purchase of liquor/wine discounts (in specific places)— and people do and bring it back with alarming frequency (there are laws on inter-province liquor transport, but I don’t really understand them). Ontario, however, won’t sell to restaurants wholesale.
Yes, it’s more complicated than that, but there must be a better solution. The Canadian Liquor Laws don’t work as well as they should/could, not to mention they’re ancient; most of the federal laws regarding liquor originated in the post Prohibition era. Perhaps it’s time for a refresher? Society has changed a bit since then… maybe the laws should follow suit. Just a thought.
Granted a lot of things are super baller in Canada i.e. free (albeit shitty) health care and access to affordable, quality education. And, as my friend Ross constantly reminds me, the Canadian Federal government is a mere $560 billion in debt to the US $14.4 trillion in national debt. Some might suggest Canada is doing something right. But with my collegiate lifestyle, I’d be poor forever despite all these other respites. Damnit.
In the end, I maintain there must be a better way than taxing the shit out of everything i.e. maybe try to minimize the exorbent spending on Sarah Palin’s wardrobe? She stunk anyways. Or maybe actively trying to balance the budget instead? The US debt grows ~$3.93 billion a day, but who’s counting?
A couple of the main sites I used for the curious: