SAQ defends monopoly on liquor sales in face of Robillard report

Quebec's government-run liquor board - la Société des alcools (SAQ) - and its tax agency, Revenu Québec, are slamming a report that concludes they're costly and inefficient.

Quebec's Ongoing Program Review Committee was charged last year with finding ways to improve the efficiency of public spending.

Today it recommended the government end the liquor board's monopoly on wine and spirit sales and turn over provincial tax collection to the federal government, as other provinces do.

The review committee, chaired by former federal and provincial Liberal cabinet minister Lucienne Robillard, questioned the SAQ's hold on 90 per cent of wine and liquor sales in Quebec.

It concluded Quebec spends too much money managing its liquor monopoly, with 21 per cent of net sales getting eaten by administrative costs.

SAQ justifies its existence

However, in a statement, the SAQ said it has already taken strides to become more efficient.

"In 2005, it cost 25 cents to generate one dollar of sales, while today it costs less than 19 cents," the agency said, adding sales increased 6.4 per cent per year between 2004 and 2014. That's second in Canada, right behind Newfoundland and Labrador.

"Profits have almost doubled in ten years, going from $546 million in 2005 to $1.034 billion in 2015," said the SAQ statement. 

"Those profits are turned over to the government, for the benefit of all Quebecers."

Program review committee member Robert Gagné said if the government is worried ending the SAQ's monopoly on liquor sales would hurt profits, it could simply increase taxes on alcohol.

"The government will raise exactly the same amount of money in a free market," Gagné said.

The report says the $1-billion profit generated last fiscal year by government liquor sales was likely a peak and would diminish in subsequent years.

Quebec first established its liquor commission in 1921 as a response to American Prohibition. 

Since then, its alcohol laws have remained strict. While citizens can buy beer and some wine at privately run corner stores, hard liquor is only sold at government-operated locations.

Revenu Québec calls for 'rigorous' analysis

The program review committee report concluded Quebec would save close to $400 million by transferring its tax-collecting powers to Ottawa.

"Quebec is the only province in Canada with its own fiscal administration to collect taxes," it pointed out.

However, the report also acknowledged the province stands to lose about $700 million annually by giving up its ability to go after tax cheats.

In a statement, Revenu Québec said its own calculations show the fight against tax evasion allowed it "to recover close to $17 billion over the past five years that could be reinvested in public services."

"For every dollar spent in the fight against tax evasion, Revenu Québec recovered more than nine (dollars)," the agency said.

It also accused the program review committee of making errors in its calculations, counting the cost of managing the PST/GST twice and artificially inflating Revenu Québec's spending by 14 per cent.

Mixed reviews from unions, lobby groups

The province's biggest employers' group, the Conseil du patronat du Quebec (CPQ), called for more time to analyze the recommendations to end the SAQ's monopoly, however, it said it supported the thrust of the report.

The union representing many provincial white-collar workers, the Syndicat de professionnelles et professionels du gouvernement du Québec (SPGQ), dismissed the call to privatize the SAQ as "serving only to satisfy neo-liberal followers" and said it would only hurt working conditions and the quality of service.

The Canadian Federation of Independent Business welcomed the recommendations on the SAQ, calling the regulations governing Quebec's liquor production, distribution and sales "archaic, at best." 

However, Éduc'alcool – an independent, non-profit agency aimed at promoting moderation in drinking in Quebec – called the Robillard report's approach "purely ideological."

"As we debate questions around bottle deposits and the recycling of wine and liquor bottles," said Éduc'alcool's executive director, Hubert Sacy, "the best decision the government could make on the Robillard report's recommendations on the SAQ is to send them off for recycling."