LCBO price gouging?

Torstar News Services report:

'The Liberals are being accused of sending “mixed messages” on the looming 13 per cent HST's impact on the price of booze — and other products and services.

In the wake of the Star’s disclosure Wednesday that the Liquor Control Board of Ontario raised its markups by 7.5 per cent to claw back any consumer savings from the business-friendly harmonized sales tax, the government scrambled to defend the move.

Finance Minister Dwight Duncan, who insists most companies will pass along any reduced costs from the HST to Ontarians, said it would be reckless to lower prices on beer, wine and spirits — even though tax changes would have made them cheaper.

“We believe that socially responsible pricing is important,” said Duncan, referring to the minimum price for selling booze in Ontario.

To control consumption, the government sets minimum prices for all product categories.

As of April 12, when the floor price was raised, the least that can be charged for a 24-bottle case of 5% alcohol beer is $25.95, excluding $2.40 deposit.

For a 750-ml bottle of spirits, the lowest legal price is $22.80; for the same size bottle of liqueur it’s $15.35.

Ontario wine can be sold for as little as $5.60 a 750-ml bottle, U.S. wine for $5.75 and other imports for $5.80. Those prices exclude a 20-cent-a-bottle deposit.

Earlier this month, the LCBO increased its markup by 7.5 per cent — it will be 71.5 per cent on an imported bottle of wine, up from 64 per cent — to grab the tax savings that would have been gained thanks to the HST.

That means an Oyster Bay Sauvignon Blanc, a popular white wine from New Zealand that now costs $18.95, which could have dropped to $18.30 because of the HST, will instead jump to $19.05. A potential 65-cent saving instead becomes a 10-cent increase.

Until the July 1 harmonization of the 8 per cent provincial sales tax with the 5 per cent federal GST, there is a 12 per cent PST for retail booze customers and 10 per cent for bar owners and restaurateurs.

Duncan said the changes were “revenue neutral” to the government because the LCBO’s price shifts offset a $24 million tax break awarded bar owners and restaurateurs in January.

But he appeared to undermine his argument of social responsibility by suggesting publicans could pass savings onto drinkers.

“They are actually getting a $24 million cut. Will they pass that on . . . ideally they will, it’s a competitive market,” the treasurer said.

Progressive Conservative MPP Christine Elliott (Whitby-Oshawa) said it’s telling that the Liberals won’t lead by example and flow through HST savings to consumers.

“Ontario families are getting a very mixed message here because the premier keeps saying that businesses will lower prices when the HST is implemented,” said Elliott.

“But the first test of what he’s telling Ontario families is with the Crown corporations he runs,” she said.

New Democrat MPP Peter Tabuns (Toronto Danforth) said Liberals’ actions prove their claims about the benefits of the HST are “bogus.”

What do you think?

Comments

[t8]

Gary don't bother proofreading as Jamie does that and checks spelling,what a great guy or girl.

[A Concerned "English Major Wanna-Be"]

And Jamie should take a lesson on proper usage of punctuation:

"Gary, if you are going to insult people, please take the time too proofread: "tou"; "braindead", LOL. I guess, then, we all know who you voted for, right!?"

[GraySquirrel]

Well said Tom, I totally agree. We indeed were told the HST would lead to cost savings being passed down to consumers. Now McGuinty has set the example that it is OK not to pass on any savings and golly gee, what do you think the business community will do. Follow that lead of course.
I am outraged at this political baffle gab.
I would bet a loonie (that's all I can afford with all this tax) that this fiasco will cost the Liberals the next election.

[Jamie]

Gary, if you are going to insult people please take the time too proofread. "tou" "braindead". LOL I guess we all know who you voted for then, right!?

[Allan Taylor]

The problem is there is actually a price increase on products well above the floor price. Some wino is not going to drink more because the price of an $18 bottle drops to $17.50. He's loooking at the bottle at the floor price. The Ontario Liberals are spewing false agendas out there. Loering the price on the higher end products does nothing to sput more drinking. What a pi;e of garbage. Do they really thing people are that stupid. Its butt covering at its worst. This is nothing more than a tax grab yet again proving the premier and his party are liars

[Gary]

If tou voted Liberal you deserve what you get because you are a mentally challenged Moron. However, if you voted for any other party besides Liberal at least you can be proud you have a brain in your head. Liberals=Braindead

[Mike]

"Social responsibility" would be not selling alcohol at all in our government monopoly stores. A huge load for sure.

[ed]

t8 is so right, Ginky is afraid of the teachers and their union, but most politicians are. Seems no problem cutting at hospitals though, just not the $800,000 salaries at the top.

[Mark D.]

Why did you not print my post, it was hardly inappropriate or inflammatory, and certainly no worse than the ones you allowed on here. The Spec playing god again, or just pushing your own agenda?
Curious...
(Blogger's note: Apologies. It was an oversight and has now been corrected.)

[t8]

The liberals keep giving the teachers what they want and the teachers keep helping the liberals stay in power.

[Mary Hinge]

McGinty is not a cretin. He is just a pathological liar.
Fortunately we can boot him and his lickspittal government out next year.
Ontarians do not forget!

[Tom Robertson]

Just more of Fibber McGuinty saying "do as I say not as I do". He stood up in the Legislature many times saying how the HST would lead to cost savings being passed down to consumers. Now he has set the example that it is OK not to pass on any savings and the business community will follow. Why is the Spec afraid to sit down with the Hamilton Mountain MPP who holds a Cabinet position to discuss this issue. Maybe someone from the editorial department can be brave enough to post here why they have had no interviews of substance with her.

[Alan]

I will take my liquor shopping south as much as possible.
1.75 liter of CC $19.95 there, $52.50 here.

[Gary]

The real sad thing about this Liberal government is they actually have support from idiots who keep voting them in.

[chris]

I hve emailed my MPP McMeekin and he is no better...as he said "I am here to look after myself, my family and my grandchildren"...guess it is grand when you make as much money as these politicians to keep increasing our taxes...soon he will be voting himself a raise to keep up with the cost of the HST....

They truly do not care what the people have to say...

Time to vote these self-serving politicians out of office.

[Jim]

Just more misrepresentation from the Liberals. HST is supposed to be a Federal Tax. Seniors compare BC HST & ON HST & we now have HST on home & gas fuels while BC doesn't & ON is going to bribe us. We may be old & on fixed incomes but we are NOT STUPID & we WILL REMEMBER at the next election! Somethings really stick in your craw - taxation without representation!

[Mark D.]

Imagine a politician, any politician, especially this fat overstuffed slob dictating responsibility and morality to us! Give me a break! How many cheeseburgers and beers has HE stuffed in HIS face to look so fit, and probably most of them paid for by you and me. These guys have been feeding at the public trough way too long and their waistlines are starting to show it! The nerve of this guy, and his boss, McGuinty, for that matter, makes me see red. Come on Ontarians, lets get rid of these morons in the next election....PLEASE!

[Jamie]

This province is completely bass akwards! If anything the HST encourages drinking not a 65¢ savings (lol). At this rate it'll be cheaper bringing it across the border & having to pay the duty. The day I leave this province is rapidly approaching.

[Jamie]

This guy is one of the biggest idiots in government. At least all the other slimey politicians give us the benefit of the doubt and don't say stupid things to our face and expect us to believe it. I am a non drinker but I know that if someone is going to drink, they will do it regardless of the cost. He is trying to say that raising the price of booze would be the responsible thing to do when in fact he is endangering the public by putting booze in the same category as crack where a user will rob and steal to get the money to buy it. Wake up Duncan and look at this from the reality level, not from your high horse. You are taking the little money left that these children of alcoholics have. So let's recap what our trusty Finance Minister is saying to us. It is more responsible to increase poverty and our crime rate than to make something more affordable. The worst part is this moron is not offering any solution to battle drinking problems in Canada except to "make it less accessible by raising the prices". It is scary to think our government is letting this guy speak on behalf of our tax dollars.

[Kathy hagan]

Price gouging for sure. This tax is disgraceful and McGinty should be ashamed of himself. He promised no tax hikes then whacked us with the OHIP premiums and now this tax grab. I don't know how he can sleep at night he is a cretin.

[ed]

I don't think any sane Ontarian thought Mr Ginky was telling the truth about this whole affair. This is a man whos lied from day 1 all the way up to and including tomorrow. Although we all know politicians are liars, Mr Ginky is exceptional at it. Its business as usual, and now that we've awarded him for all his lies with a guaranteed pension, I'm sure hes laffing at us every night in front of the dinner we bought him.