The Financial Accountability Office of Ontario (FAO) has released a report estimating the economic impact of the province’s decision to expand the alcoholic beverage marketplace, including the costs of accelerating the rollout to start in 2024.
The report finds that expanding Ontario’s alcohol marketplace will result in a net cost of $1.4 billion under the Early Implementation Agreement, which ends on Dec. 31, 2030. Of this, $817 million is tied to the planned expansion starting Jan. 1, 2026, while $612 million is attributed to the decision to accelerate the rollout to 2024.
The FAO estimates that the cost to the province could range from $529 million to $1.9 billion by Dec. 31, 2030.
On Dec. 14, 2023, the Ford government announced that the alcohol marketplace for beer, wine, cider and ready-to-drink alcohol beverages would expand to participating provincial convenience, grocery and big-box stores no later than Jan. 1, 2026.
The process was fast-tracked, and in May 2024, the province announced that the beverage alcohol marketplace expansion would begin with a phased rollout starting in the fall.
“The projected $1.4 billion net cost consists of $489 million in support to Ontario’s wine industry and Brewers Retail Inc. (which operates as The Beer Store), $1.2 million in lower tax revenues, primarily for beer, wine and spirits taxes, and $14 million in other expenses,” the FAO wrote in its report.
“These costs are partially offset by a $353 million increase in LCBO net income, largely related to increased wholesale activity.”
FAO findings come amidst possible Trump tariffs
The FAO stated that Ontario’s exact financial cost will depend on factors such as retailer and consumer responses to the expanded marketplace. The price could be lower than projected if the expansion leads to increased per-capita alcohol consumption.
Ontario Liberal Leader Bonnie Crombie criticized Premier Ford in light of the FAO’s findings, stating that the taxpayer dollars spent to get alcohol in big box stores a year earlier than planned would have allowed the province to hire 1,400 family doctors.
“What a disastrous waste of money. Once again, Ford has been caught red-handed,” said Crombie. “He gave $1.9 billion of your hard-earned money to big beer companies and his American billionaire buddies who own 7-Eleven and Costco instead of getting people a family doctor.”
Last week, Premier Ford said that if U.S. President Donald Trump imposes tariffs on Canada as he’s alluded to, he’ll see that all U.S. alcohol is pulled from LCBO shelves. Trump initially said that the Canadian tariff would be in response to inaction on drugs and migrants crossing the shared border.
Premier Ford previously threatened to cut off Canadian energy supplies to the United States as a retaliatory measure should the tariffs come to fruition.
Canada supplies more oil to the U.S. than any other country. About 60 per cent of U.S. crude oil imports are from Canada, and 85 per cent of U.S. electricity imports.