Minister Says Closing Government Owned Liquor Stores Economically Best Decision

By Robert Thomas

Although she has empathy for the retail liquor employees of the Saskatchewan Liquor and Gaming Authority (SLGA) who are set to lose their jobs it all comes down a business decision to close all government owned retail liquor outlets by early 2023.

“It is always hard when people are transitioning from what they are use to into something new. Unfortunately the model of retail liquor is just not feasible anymore for the Province of Saskatchewan and so we are moving forward with the (closure and sale) of that,” SLGA Minster Lori Carr said at a Thursday media scrum.

It is not ideological but rather has everything to do with economic trends, the Minister said.

Trends that have seen the Crown owned liquor retail outlets lose the vast majority of their revenue in just four years.

“Right now they are still profitable but as I said earlier in the scrum every year that profit goes down and this year we are expecting possibly $385,000 profit and it will be very shortly that we end up in a negative position.”

Revenue has dropped rapidly in short four years with rapidly dropping profit as a result.

Profits on the SLGA’s liquor retailing side were $9.4 million in 2018 - 2019 but declined to $3.2 million in 2021 - 2022. The profits for 2022 - 2023 are projected to be $395,000.

“We have looked at the revenue streams that has been coming in and over the past four years there has actually been a decline of 95 percent (in revenues) and this year we are expecting it to be $385,000. Every year it has become less and less. So it won’t be long until we are in a negative position and we are losing money on our retail operations,” Carr said.

Inside SLGA’s Moose Jaw store - MJ Independent photo

Asked where all the sales went to she said it has been driven by consumer choices. Choices seeing them flocking to private liquor stores in lieu of the government owned stores.

“I think it comes down to the fact the SLGA retail sales have gone down that much and it is because people are making decisions to shop elsewhere outside of the SLGA retail (stores) and into the private stores. Sobeys, the Co-ops and independent operators,” she said.

At one time SLGA held a near monopoly on retail liquor sales with hard liquor (higher percentage alcohol) and wines only available at government owned retailers.

In 2008 the trend towards privatization started with the government in 2015 selling 40 of its then 75 liquor stores and privatizing them.

At the present time SLGA operates 34 outlets with 284 full-time equivalent jobs. All stores will be closed their licenses auctioned off and the employees let go.

The actual closing date for the SLGA’s store in Moose Jaw has yet to be publicly released at this time but the last retail outlet is scheduled to be closed March 31, 2023.

Minister Carr said SGLA retail liquor employees will not go away empty handed as the government will negotiate severance packages for the employees.

“We will work very closely with the union. There will be a workforce adjustment plan and everybody will have the opportunity to get that severance at the end of the day,” she said.

Moose Jaw’s SLGA retail outlet is located in the former CPR passenger rail station. It is unknown at the present time when the Province will cease its operations - MJ Independent photo

Reporters pressed the Minister about the differences in pay private operators would pay compared to the Crown.
“As our private operators decide what their business model is you are right they will determine what they are going to pay their employees. Having said that we have organizations out there that have taken over a number of those private stores like Sobey’s or the Co-op and often they pay comparable wages,” Minister Carr said.

Asked further what she saw as a fair and comparable wage she said it was not up to the government to dictate to private enterprise what they should pay their employees.
”I guess in fairness the individual operators who are going to buy these permits are going to set the wages and I am not here to tell them what they should be paying. And that will happen as we move forward.”

“I can’t predict what jobs they are going to be getting into in the future. I would certainly hope they get the best paying job they can,” Minister Carr told reporters when it was pointed out many of them rely upon the higher paying government job to take care of their families.

Carr said she did not expect to see the number of people employed - equivalent number of positions - to drop substantially if at all once the licenses were auctioned off to the highest bidder.

“What has happened in the past presents itself in the future we anticipate all of the permits will be sold. So that means the same numbers of stores will be out there so I will assume that you will need the same number of employees to run those stores.”

Carr was asked in the media scrum if the retail employees could not have found out earlier perhaps by email about the stores’ closures and all employees being let go.

“I think this is the format we have chosen to announce it…the decision was made to roll things out the way we did and we can’t take it back at this time.”

By getting out of the retail liquor business the Province can focus on the more tangible assets everyone wants instead of taxpayer’s dollars to subsidizing alcohol sales. The funds could be used elsewhere, she said.

“I can’t read people’s minds why they would chose a government store over a private store or a private store over a government store, But right now because of the trend that is happening we are deciding to divest of retail stores. And it really isn’t the core business of government. We should be focusing on any if there are losses from liquor sales that is going to take away from possibly building a new hospital or putting it into roads the capital expenditures that really government should be doing.”

Despite moving out of the retail liquor business Carr said the provincial government was not going to move out of the wholesale end of the liquor business as it is very profitable venture.

“I think I would argue warehousing is very profitable for the Province of Saskatchewan. And true revenues we earn there go back into healthcare, education, highways, you know name your file of importance. “

She guesses the profits from the warehousing of liquor to be about $300 million. All alcohol sold in the province must be wholesaled to the retailers through the SLGA.

Carr mentioned the SaskParty’s record of investing in the province.

“The capital investments we have been putting into Saskatchewan has shown we are committed to building Saskatchewan and having a province that is good for every individual that is here.”

No timeline of when Moose Jaw’s SLGA retail outlet will be closed nor how many people are set to lose their jobs as a result has been publicly announced at this time.