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Liberals defend LCBO hikes to clawback HST savings

The Liberals are being accused of sending “mixed messages” on the looming 13 per cent HST’s impact on the price of booze — and other products and services.

The Liberals are being accused of sending “mixed messages” on the looming 13 per cent HST’s impact on the price of booze — and other products and services.

In the wake of the Toronto Star’s disclosure Wednesday that the Liquor Control Board of Ontario raised its markups by 7.5 per cent to claw back any consumer savings from the business-friendly harmonized sales tax, the government scrambled to defend the move.

Finance Minister Dwight Duncan, who insists most companies will pass along any reduced costs from the HST to Ontarians, said it would be reckless to lower prices on beer, wine and spirits — even though tax changes would have made them cheaper.

“We believe that socially responsible pricing is important,” said Duncan, referring to the minimum price for selling booze in Ontario.

To control consumption, the government sets minimum prices for all product categories.

As of April 12, when the floor price was raised, the least that can be charged for a 24-bottle case of beer containing five per cent alcohol is $25.95, excluding $2.40 deposit. For a 750ml bottle of spirits, the lowest legal price is $22.80; for the same size bottle of liqueur it’s $15.35.

Ontario wine can be sold for as little as $5.60 for a 750ml bottle, U.S. wine for $5.75 and other imports for $5.80. Those prices exclude a 20-cent-a-bottle deposit.

Earlier this month, the LCBO increased its mark-up by 7.5 per cent — the markup over cost on imported wines is now 71.5 per cent, up from 64 per cent — to grab the tax savings that would have been gained via the HST.

That means an Oyster Bay Sauvignon Blanc, a popular white wine from New Zealand that now costs $18.95, which could have dropped to $18.30 because of the HST, will instead jump to $19.05. A potential 65-cent saving instead becomes a 10-cent increase.

 
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