Manitoba better at handling sale of alcohol: report

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This article was published 22/09/2016 (3320 days ago), so information in it may no longer be current.

A new study from the Canadian Centre for Policy Alternatives says Manitoba does a better job than any other western province when it comes to handling booze sales.

The report, Balancing Convenience with Social Responsibility: Liquor Regulation in Manitoba, examines the way liquor is managed and sold in Western Canada. Greg Flanagan, a public finance economist, wrote the report and found Manitobans are better off having publicly-run liquor sales.

Provincial governments deal with deficit due to the sale and consumption of alcohol, but government net income as a percentage of revenue from sales is lowest in Alberta’s fully privatized system. British Columbia, more privatized than Manitoba and Saskatchewan, had the next-lowest percentage. Manitoba and Saskatchewan had much higher net incomes from booze sales, the report found.

“Manitoba was the best in terms of the deficit was about one-third that of the Canadian average and about one-quarter that of Alberta,” Flanagan said. “Many of those costs are fairly easy to collect. For example, we do take data on alcohol-induced hospitalizations. Some are estimated by lost productivity in the work force by people not being able to come into work. Some is calculated fairly explicitly in damages in alcohol-related car accidents and loss of life.”

Manitoba’s social burden of alcohol consumption is reduced thanks to higher taxes on a lower volume of sales, the report said. That money helps pay for health and social programs needed for alcohol consumption. While Manitoba has more reenue from booze sales to deal with alcohol-associated problems through health and social programs, it also sees higher rates of alcohol abuse and dependence than B.C. and Alberta.

The report also found the four Western provinces have considerably higher alcohol-attributable hospitalization rates than the Canadian average but Manitoba is the lowest among the four on this measure of social harm.

Prices for most products rose in Alberta after privatization while the percentage of revenues going to government has gone down, Flanagan’s report found. Privatization in Alberta has resulted in consumers paying more, alcohol consumption increasing and decreasing net revenue from sales to the province, leaving Alberta with less revenue to deal with health and social problems connected with alcohol consumption.

“People have this feeling, I don’t know if it’s limited economic knowledge or just the way it’s presented to them, but they feel that private competition leads to lower prices and so on,” Flanagan said. “Both the theory and evidence don’t support that. In Alberta, the cost went up immediately when it privatized.”

Flanagan said the research is clear Manitoba shouldn’t look at privatizing if it wants to keep its low alcohol-related deficit.

“You lose government revenue, but it’s not like consumers gain that in lower prices,” he said.

“The last few years, the Manitoba government has raised the price, which brings more revenue in because they’re controlling the sale, and at the same time consumption is going down on a per capita basis. It’s going below the other provinces.”

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