It’s time that the Yukon government got out of the liquor business.
That’s not because the individuals working at the liquor corporation aren’t doing a good job, but rather because we can use other levels of government and the marketplace to more efficiently achieve the goals of the monopoly.
The Yukon government, through the liquor corporation, has enjoyed a monopoly on the sale of alcohol throughout the territory as long as I have been alive. The monopoly, by virtue of a lack of competition and the overhead connected to the Crown corporation, results in higher prices for alcohol throughout Yukon.
This is before we include the artificial 15 per cent increase in prices at off-sales once the sole liquor store in Whitehorse closes.
Further, the liquor corporation, an unelected body, is tasked with regulating the sale of alcohol, meaning that the issuance and enforcement of liquor licences is carried out by a body that is accountable only to the courts, rather than the democratically elected legislature.
As citizens we should expect some return for the resulting higher prices and democratic-disconnect, meaning the monopoly should serve some public purpose.
The purpose of the monopoly must be to reduce the harm associated with the use of alcohol throughout the territory. The question is, can the specific manner in which the liquor corporation pursues that policy be reproduced more efficiently (read cheaper) by the marketplace or other levels of government without sacrificing safety? If so, then I would say the monopoly must end.
The liquor corp. currently engages in three broad activities connected to liquor: the direct sale of liquor, advertisement concerning safe use of liquor and the issuance and enforcement of third-party liquor licences. These activities are designed to, respectively, raise money for the Yukon government to deal with social harm stemming from liquor, provide information to the public to hopefully prevent future harm and to regulate sales of alcohol to achieve reduction in harm.
I would suggest that the above three broad policy goals can be met without the liquor corp. by, firstly, privatizing liquor and instituting a liquor tax, secondly, by tasking the alcohol and drug services branch (which already exists) with the advertisement and promotion side of prevention and, thirdly, by downloading the day-to-day regulation and licensing of establishments to the municipalities.
First, by privatizing sale and instituting a liquor tax we can raise the same amount of revenue as today less the overhead of the liquor corp. With or without the monopoly, people will purchase alcohol. That means that, depending on where the tax rate is set, we can easily determine the rate required to raise an appropriate amount to offset the profits lost from the wind-up of the liquor corp.
Secondly, by downloading responsibility of regulation and issuance of liquor licences to the municipalities we democratize the process, leaving decisions on liquor to the affected communities. Why should Pelly Crossing or Old Crow have to come to the Yukon government, cap in hand, to request that their communities be dry communities?
Further, why should Whitehorse care whether Dawson City wants to keep its bars open until 4 a.m. all summer? Leave these decisions to the citizens of the communities - it will lead to a more transparent system of liquor regulation.
The municipalities will be able to raise funds through setting liquor licence fees.
The Yukon government will still be in the regulation game when it comes to broad control of marketing and safety surrounding the sale of liquor, much like the control of cigarettes, but the day-to-day regulation and inspection of establishments can be left to the municipalities.
As a bonus, the downloading of regulation to the municipalities will also harness further economic efficiencies in that instead of having liquor inspectors and municipal bylaw officers both inspecting businesses in town, we would just have municipal bylaw officers. Remember that we currently have to transport Whitehorse-based liquor inspectors as far as Eagle Plains, which is not the most efficient use of resources. Having individuals who live in the area and who are already tasked with reviewing municipal bylaws inspecting liquor establishments makes more sense.
Lastly, the download of all liquor related issues to alcohol and drug services will create a one-stop-shop for issues stemming from the use of alcohol in the territory. For example, both the liquor corp. and the alcohol and drug services are currently concerned with advertising to prevent harm stemming from use of alcohol. Would it not make more sense to have one government agency tasked with creating one global policy, rather than the current fragmented approach?
Taking the above three steps will place licensing in the hands of the affected communities, centralize preventative steps with one government department and reduce prices of alcohol, all without reducing funds flowing to government or sacrificing safety. All that occurs is we remove the middleman from the equation, being the liquor corp.
Government and the marketplace can engage in a bit of synergy here, with government doing what it does best, which is tax harmful products and provide services for those in need, while the marketplace doing what it does best, which is sell things. By letting each sector focus on its strength the system as a whole will certainly come out ahead.
Graham Lang is a Whitehorse lawyer and long-time Yukoner.