Privatization not needed for SLGA: study


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December 16, 2014 9:03 AM

The Lloydminster Fire Department responded to a call at a gas station on 29 Street and 50 Avenue on Sunday evening. The cause of the fire was unknown. - Don Whiting Photo

When it comes to the privatization of the liquor board in Saskatchewan, one report is against it.

David Campanella, the author of A Profitable Brew: A Financial Analysis of the SLGA and Its Potential Privatization, said that the report shows that financial loss the government would take if Saskatchewan Liquor and Gaming Authority (SLGA) would be privatized.

“There is no economic basis to think about the privatization of the SLGA,” he said.

“The SLGA is phenomenally profitable for the province of Saskatchewan, and when we compare city financial metrics to that of privatized systems like the province of Alberta and the province of British Columbia, Saskatchewan fares much better.”

The report was commissioned after Saskatchewan Premier Brad Wall announced that he would be asking the Saskatchewan Party MLAs to potentially endorse a policy privatizing the SLGA.

“I’m going to ask our MLAs this summer to be listening to the Saskatchewan people about what they want in terms of the future (of) liquor sales in the province,” Wall said earlier this year in a press conference at the legislature, adding that he wants to find out if the people of Saskatchewan want private stores, “We may possibly campaign on that in the next election.”

Campanella said that when lumped in with Manitoba, which is another publicly-owned board, the government-run boards far outperform the boards that are privatized.

“The two publicly owned boards far out perform the boards that are privatized in British Columbia and Alberta,” he said.

Campanella has had a long history of working on issues surrounding privatization in Canada.

“I used to be the public policy director at the Parkland Institute in Alberta, and in that role I had co-written another report about privatization, comparing the liquor sales of Alberta, Saskatchewan and British Columbia sales,” he said.

“I recently left that position and then another report had to be written after the premier of Saskatchewan began talking about privatization, and then I was commissioned by the Parkland Institution to take on writing this report.”

According to Campanella, a publicly run organization like the SLGA isn’t just about maximizing profits.

“The SLGA is not just mandated to maximize profits, it’s mandated to balance revenue generation with customer service,” he said.

“That balance makes the financial returns more profitable.”

But there is still some reason for concern, according to Campanella.

“The SLGA has room to be concerned about the shopping experience in the SLGA,” Campanella said. “It appears to me, that the SLGA has not invested too much back into their liquor operations.”

According to Campanella, until the SLGA began construction on their new central warehouse operations, the SLGA was investing back into itself around one to two per cent of their profits.

“There is certainly room for the SLGA to carve out a good chunk of money to re-invest into their stores, only if that is something the citizens of Saskatchewan would want to see,” he said.

Reinvesting into the SLGA could come in the form of updating the stores across the province, Campanella said.

“They could create new and more accessible stores, carve out room in their shelves for Saskatchewan breweries, and other brews that customers want these days.”

Now with the report process completed, Campanella hopes that it will be able to inform the debate that the government has asked for.

“Premier Wall asked for a financial analysis for privatization to help inform the debate,” he said.

“I hope the public is able to read the findings and help move along the debate on this issue.”

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