The SAQ monopoly challenged

saq(Quebec) no question of privatizing the Societe des alcools du Quebec, but the CBC should no longer enjoy the monopoly it holds in the sale of wines and spirits.

Open the door to competition would benefit the economy, increase the choice for consumers and would be neutral from the point of view of government revenues.

These findings are part of the second part of the report of the commission chaired by Lucienne Robillard commissioned by the Quebec government to re-evaluate all government programs. The commission submitted in mid-June, a voluminous report to the President of the Treasury Board, but the government retains the publication, preferring to keep to relaunch the public debate at the end of the summer.

The publication of the first part of the report, in November 2014, was a disaster in terms of communications. Just hours after its publication, tenors Couillard government rejected recommendations to cut assistance to farmers and municipalities. Quebec had even chosen not to wait for Ms. Robillard conclusions before making his bed on the new daily rates for child care.

Again, the economists Robert Gagné and Claude Montmarquette, true thinkers of the commission, were tempted by proposals especially difficult application for politicians.

According to the sources of La Presse notes that Quebec could make significant savings if it abolished its Revenue Agency, the largest workforce among the ministries to leave the responsibility for the collection of taxes to Revenue Canada.

For the Fraser Institute, there are five years, the economist François Vaillancourt had estimated that a saving of 500 to 700 million was possible. One obstacle, however, is prevented in Quebec, where the agency has diversified and is responsible for certain activities, for example, the collection of support. For months, the economist Montmarquette pushing for this proposal to be adopted by the committee, although it may be cut to pieces quickly, as a decline of Quebec sovereignists by opponents of the government.

At no cost

The MLCC seems a more accessible target. Especially that unlike other Crown corporations – Loto-Québec, for example – no leader of the SAQ has contacted the commission to defend the body.

For years, a debate persists about whether to privatize the SAQ, at least in part. In a report following the election of the PLQ, MM. Luc Godbout and Claude Montmarquette had in spring 2014, suggested that the government sold 10% of the SAQ and Hydro-Québec to replenish the Generations Fund, an avenue Québec quickly repelled. In the summer of 2013, young PLQ had supported a motion that “gradually sell all the assets of the Society of Quebec Liquor on the market.” Last spring, the Daoust Leitao and ministers had challenged the government’s presence in commercial activities such as the sale of alcohol.

The governance of the SAQ is taking a beating in the Robillard report in La Presse indicate reliable sources. Significant costs related to the unionization of employees, binding timetables for customers, the SAQ raises criticism as chain stores. For two years, the SAQ’s business strategy has resulted it was unable to deliver the profits hoped for the government. Quebec had to raise twice its alcohol tax to meet revenue targets, just over $ 1 billion. In 2013-2014, the SAQ’s profits had declined in absolute terms; a small decrease, but still unprecedented 28 million.

But its monopoly raised eyebrows more. According to studies, the SAQ profit margin is 50 to 34% over the past five years. Open the door to competition would force the corporation to fold its margins, to lower its prices to compete. In return, Quebec could increase its tariffs on wines and spirits: the net effect would be neutral for the government coffers, but customers would qualify for more products with more flexible schedules.

The SAQ has not responded to our invitation to speak on the subject.

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