B.C. government overpaid commercial wineries $5.3 million

The B.C. Liquor Distribution Branch (LDB), one of two branches of government responsible for the beverage alcohol industry in B.C., has now revealed it overpaid the province's biggest commercial wineries $5.3 million.

Internal government documents that surfaced last week revealed the government had overpaid the wineries by millions of dollars, but did not reveal the precise amount. 

According to an April 2015 ministerial briefing note, the misallocation of funds was due to a "system error" in calculating commissions the government paid the wineries.

The commission is paid to commercial wineries for providing direct delivery services to private retailers. The memo says it is supposed to be calculated on the wholesale price of wine, but instead it was calculated on the retail price. 

The branch says the wording of a 2008 agreement with the commercial wineries was open to interpretation. 

"The wording in the 2008 commercial wineries' sales agreements could have been open to different interpretations," said Blain Lawson, General Manager and CEO of the LDB in a statement. 

But NDP liquor policy critic David Eby says the memo clearly stated it was an overpayment.

"I don't think there is any ambiguity," he said. 

The branch says it only discovered the discrepancy because it was reviewing its policies after the province's new liquor policy model came into effect April 1, 2015.  

The issue was raised in last week's question period at the B.C. legislature by NDP critic David Eby who asked Coralee Oakes, the minister responsible for the LDB how much the error had cost taxpayers.

At the time, Oakes was not immediately able to provide ​estimates, but reassured Eby, the problem had been fixed. 

Not asking for reimbursement 

The LDB is not going to ask commercial wineries to repay the money, because it says it wouldn't be in the interests of taxpayers. 

"Given this practice was decades-old, and considering legal counsel regarding the likelihood of a successful resolution, it was decided that it was not in the best interests of taxpayers to attempt to seek reimbursement," said Lawson. 

"I can't understand how a government that pretends to care about public money, taxpayer money, can walk away from $5 million in overpayment," replied Eby.