Photo by Dillan Payne/Flickr

One of Canada’s most successful and popular publicly-owned corporations is about to be dismantled and possibly privatized. The LCBO, the Liquor Control Board of Ontario, has existed for a century, and generated around $120 billion in dividends for the province of Ontario, as well as providing about $43 billion dollars in wages to workers throughout the province. Besides making money, its original primary function was to rebuild the industry and market for beverage alcohol destroyed during Prohibition.

Since the Second World War the LCBO has increased sales and the volume of products it sells by a factor of almost 50, while its workforce has only increased by a factor of five (based on a review of LCBO Annual Reports from 1947 to the present). Growth depended upon progressively integrating information, inventory, distribution, communications and retail system. The workers and the operations are remarkably efficient. Casualization, fixed-term employment and other forms of precarious labour—against which the LCBO union has fought since the 1960s—undoubtedly helped contain labour costs, but the contribution of labour restructuring to the LCBO’s productivity should not be exaggerated. The corporation’s long-term ability to generate dramatically greater sales and move vastly larger volumes rested principally on its success in developing the industry, creating markets and applying technology and organizational innovation—not simply on extracting more work from fewer or more precariously employed workers.

In addition to operating at a remarkable size and scale, the LCBO has increased the competitiveness of Ontario’s wine, beer, spirits and cider industries. This is because the LCBO was never merely a seller and distributor of beverage alcohol. From its earliest years, and particularly in relation to Ontario wine, it helped reconstruct, regulate, test, audit, finance, market and modernize the industry itself. In the case of wine, for example, the LCBO’s purchasing power provided producers with access to a stable market; public programs linked to LCBO sales supported investment in wine production; and the relationship between the provincial government, the LCBO and the industry helped encourage the transition from a weak post-Prohibition industry toward one increasingly concerned with quality, varietals, appellation and international competitiveness.

In light of all this, it would be fair to conclude that Premier Doug Ford must be a fool to deprive the province of this revenue-generating enterprise. As Randy Robinson observed in a 2024 article for the CCPA: “The profits of the LCBO are a strange thing to want to give up, yet that is exactly what Queen’s Park is doing. Under the government’s new plan, a sizable chunk of the profits currently flowing to the public will now flow to private companies and their owners. The taxes these companies pay on the sales they make will not come close to making up for the LCBO’s lost profits.”

But we can uncover the logic to his apparently irrational decision. For decades the neoliberal hard right in Ontario has been baying for blood over this corporation. Why? Precisely because it works so well, it is the perfect advertisement for public ownership. They are not trying to kill a corporation, they are trying to conceal the truth: public ownership can and does work.

How did this successful project of public ownership ever get started in Ontario, which has historically resembled a Conservative one-party state? The answer is a little surprising and the circumstances that brought it about have largely been forgotten.

Canada experienced various degrees of prohibition from 1919 to the 1930s. In some places it arguably lasted much longer. The prohibition of beverage alcohol is often seen culturally through the prism of its portrayal in American movies, which omitted a few important Canadian details. It was Canada, and principally Ontario, which acted as a narco state, that effectively broke the US Prohibition (1919-1933). The prospect of lavish profits united Ontario in the smuggling operation, from the premier to the farmer. Most of the........

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