Another Round at the LCBO

by David Bush and Doug Nesbitt

As in 2009, a last minute deal was reached between the Liquor Control Board of Ontario (LCBO), a provincial crown corporation, and the Liquor Board Employees represented by the Ontario Public Service Employees Union (OPSEU). Details of the tentative agreement and the date of the ratification vote will be out next week. In a statement on the OPSEU website, union president Thomas “Smokey” Warren said,

“But I’m pleased to announce that, our bargaining team is satisfied with the tentative contract agreement reached with the LCBO and will now take it for a vote with the membership. Did we get everything we were asking for? No. Did the LCBO get everything they were demanding of our members? No.”

In April, seven thousand LCBO workers had voted 95 percent in favour of strike after the employer came forward demanding a series of concessions despite the LCBO’s record sales last year of $4.71 billion, including $1.61 billion in profits transferred to the public purse.

[audio:|titles=LCBO worker interview]AUDIO: OPSEU Local 497 President Eric Davis explains the LCBO’s to-the-wire bargaining strategy as an effort to increase sales

The LCBO wanted a four-year wage freeze which would have lead to wage cuts with inflation factored in. Management was also unwilling to address the concerns that over 60 percent of the workforce are casual part-time, who are paid at a lower wage rate than permanent full-time employees. Part-time hourly wages start at $16/hour and top out at just below the starting wage of $22/hour for full-time workers. Full-time wages top out at around $28/hour.

For this large, part-time workforce, benefits are difficult to come by. Workers must put in 1300 hours per year to qualify for partial health benefits. Through the ongoing expansion of part-time work during the last five years, more part-time workers are unable to reach 1300 hours. There are a number of cases where part-time workers lose their benefits while on maternity leave because there are no provisions exempting them from the 1300 hour qualification.

[audio:|titles=LCBO worker interview]AUDIO: an LCBO worker explains the nature of part-time work at the liquor store

Health benefits are necessary at the LCBO. When the LCBO workers union joined OPSEU in 2005, they discovered that they had more Workplace Safety Insurance Board claims than any other workforce in OPSEU, including provincial prison guards. Most of these safety concerns are not in the warehouses, where the 90 percent male workforce operates forklifts and other machinery. Healthy and safety is a problem in retail stores where part-time, often female workers who don’t often qualify for health benefits, must unload trucks by hand.

Women at the LCBO are further discriminated against by the employer. They represent two-thirds of the part-time workers, but just less than half of full-time workers. The union has recently launched a human rights complaint over this practice.

OPSEU TV commercial: The Part-Time Blues

The dispute at the LCBO has not taken place in a political vacuum. Management has pointed to provincial wage freeze deals with teachers and other public sector employees as a justification for their offer. They say the province is under economic duress.

Privatization: The Case of Alberta
Amidst this labour dispute, calls for the wholesale privatization of the LCBO have returned, led partly by the anti-union Tories, but also supported by sections of the public who believe privatization is the solution to the absence of convenience stores selling alcohol, and complaints about high prices compared to other provinces. These ideas are routinely connected with attacks on unionized public sector workers despite the fact that the LCBO is a highly profitable enterprise for all Ontarians.

Hudak and other top Tory strategists use the privatization of the Alberta Liquor Control Board as model upon which they would most likely privatize the LCBO if given the chance. The political parallels of the privatization of the ALCB are eerily similar. In 1993 ALCB employees went on strike in the lead up to the May long-weekend. Ralph Klein, during the late spring campaign made the privatization of the ALCB one of his key election promises.

After winning, Klein’s government privatized the ALCB by selling off or liquidating all of its stores. Unionized jobs were lost en masse and replaced by more numerous non-unionized jobs. The result was a drop in wages, benefits and working conditions and the elimination of a sector of the provincial economy providing stable, decent jobs. Tax revenue from liquor per capita has fallen in Alberta, while revenue from direct sales has obviously evaporated as profits flow into private bank accounts, not the public purse. The foregone revenue since 1993 has been estimated to be nearly 1.5 billion dollars. Having instead tied their economy to unstable oil prices, the ruling Alberta Progressive Conservatives are now facing budget deficits, and are now making 20 percent cuts to education and other social services.

solidarity with LCBO worker at Kingston's Barrack Street liquor store
solidarity with LCBO worker at Kingston’s Barrack Street liquor store

The privatization of the ALCB has meant big bucks for large retailers (unlike smaller dépanneurs in Quebec which make almost no margin on liquor sales). It has also meant big bucks for Connect Logistics; the company outsourced for all the warehousing and distribution spirits in Alberta, eliminating the many local warehouse and transportation jobs we don’t see when we’re at the liquor store.

Privatization: The Reality in Ontario
Because Ontarians haven’t endorsed wholesale privatization, there are public misperceptions that the LCBO is not in the process of being privatized. However, partial privatization started in the 1990s with the formation of LCBO “agency” stores. There are also now Wine Rack stores which sell a narrow selection of LCBO wine and cider. These stores are privately-owned, for-profit, non-union businesses which get their alcohol from the LCBO. LCBO agency stores were originally created in the 1990s to help provide better LCBO service to rural communities. They were supposed to become publicly-owned, union stores when annual revenues surpassed $1 million, thus funneling more liquor sale profits into the public purse. However, short-sighted decisions by union leaders before the merger with OPSEU led to this provision being bargained away. Now agency stores can exceed $1 million in revenue and never face the threat of becoming publicly-owned and providing union jobs.

With 219 agency stores and 160 Wine Rack stores, many of the 630 public, unionized LCBO stores are now being placed in direct competition with the private stores. Speaking with Eric Davis, president of OPSEU local 497 and representing LCBO workers in Kingston, there are public LCBOs that are having store hours cut, while nearby agency stores have hours extended. The LCBO is using agency and Wine Rack stores to undercut sales and labour costs at public stores.

Agency stores pay minimum wage, are almost entirely part-time jobs, and offer virtually no benefits. According to workers who have been at both agency and public LCBO stores, agency stores have abysmal training around workers legal rights when selling alcohol. Basic health and safety training is also lacking. LCBO workers told that some private owners of agency stores push employees to serve intoxicated people who would never be served at a public store. This is all the more worrying as agency stores tend to be rural, meaning people are probably not traveling to the store by foot or public transit. The result is that agency stores are not only against good, permanent full-time jobs, but they’re a public health problem.

Talking Labour Strategy
Knowing the political risks, this leaves us with many questions about keeping good jobs in Ontario, keeping revenues in public hands, and protecting unions against Hudak’s job-killing, anti-union agenda spelled out in his ridiculously-titled “Paths to Prosperity” white paper on provincial labour policy.

labour solidarity and public outreach
labour solidarity and public outreach

It is clear that the wholesale privatization of the LCBO proposed by the Tories is about busting up the unions and the collective clout of the union membership. Privatizing retail sales of liquor in the province will result in the loss of thousands of unionized jobs and a decrease in wages and benefits in the sector. It will also put added pressure on other public sector workers to fall in line while creating more “race-to-the-bottom” private sector jobs which will ultimately undercut good jobs in the private sector as a whole.

It is important to understand what the Tories gain politically by coming out for privatization. They can claim to stand for increased access and lower liquor prices. Thus, it is imperative that those opposed to privatization adopt a position that can speak to what are often legitimate consumer grievances that have been co-opted by anti-union politicians and parties. This means explaining that privatization will in fact lead to higher prices and less selection, as well as poorly-paid workers with little training which will have dangerous consequences for public health.

Alternatives to the present LCBO arrangement could be advanced that protect and improve existing jobs while adding equally good jobs in the process. If access to the LCBO is a public concern, more LCBO stores should be opened and hours extended. Calling for the agency stores with sales over 1 million dollars to become full LCBO stores with a unionized workforce is also provision to bargain for, and to push for in the political arena.

As for alcohol consumption, organized labour has to think clearly about how to address the issue. It is clear from the experiments in prohibition in the early 20th Century, from which the LCBO was actually formed, that preventing people from drinking alcohol is a failing idea. The labour movement and its supporters should avoid focusing on moralistic arguments about decreased alcoholic consumption in public liquor ownership models. Taking such a position would mean moving into the same political territory the Tories are looking to capture.

However, it is worth talking about how LCBO stores properly train their employees to not serve to minors and those who are legally intoxicated. Privately-owned agency stores that don’t train employees properly, are more interested in profit than public health. They also don’t have unionized workforces capable of keeping bad employers in check and informing the public about wrongdoings and other bad business behaviour.

Public sector workers in Ontario have been bargaining under difficult conditions. The minority Liberal government has beaten up on teachers and other public sector workers and the Tories are attacking unions, including LCBO workers, for political gain, even if it is the employer pushing workers to the wall. The workers at the LCBO are not unaware of the risks of pushing too hard in a minority government situation. Like all public sector labour struggles LCBO’s workers and their supporters going forward need to frame the issues at the LCBO not just in terms of workers and management, but also as a question over public service. By talking about the expansion of the LCBO, creating good jobs and generating more revenue, labour can counter the phony Tory narrative of a privatized liquor utopia, and the Liberal government claims that there is no money for public sector wage increases. In the current political context the LCBO is a political minefield, having the correct strategy is more important than ever in winning important gains for workers.

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  1. Pingback: Ontario 2016 Budget Fails to Address Food Sovereignty Needs | The Rhizome

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