ADMS 1000 Study Guide - Final Guide: Privately Held Company, Loop Jump, Joseph Cordiano

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Published on 27 Jan 2013
Course
Professor
PART I
QUESTION 1 (60 MARKS)
Read the article below, then respond to the questions following the article. Your
responses must make explicit reference to any relevant course material (concepts,
frameworks etc.).
Ontario government still wants to privatize the LCBO 1
The Liquor Control Board of Ontario (LCBO) may soon be privatized, despite repeated
promises to the contrary by the province's Liberal government, says the union
representing LCBO employees.
The LCBO generated record sales of $3.3 billion in the last fiscal year, resulting in $1.04-
billion in profits for Ontario taxpayers. The agency is often described as the single most
profitable liquor retailer in the world. Private corporations have been lobbying for
decades to purchase the LCBO.
"Unfortunately the government is still considering privatization," says John Coones,
president of the Ontario Liquor Boards Employees' Union (OLBEU/NUPGE). It doesn’t
seem to make any difference which government is elected to power, they all seem to be
willing to give up high annual profits and social responsibility for a one time infusion of
money," Coones adds.
It has been estimated that selling the LCBO could net a profit of approximately $10
billion, equal to roughly a decade of profits at current levels. But selling it off would
mean giving up untold billions more in future profits, and leaving taxpayers to fill the
gap.
"In spite of the promises made by Dalton McGuinty regarding privatization and the
LCBO prior to his (2003) election, the Liberal government is no different than the (Mike)
Harris government, except for the fact that Harris came right out and said what he was
going to do while the Liberals try to do it all through the back door," the OLBEU leader
said.
Coones also questioned the sincerity of Joe Cordiano, the minister of Economic
Development and Trade. "While (Cordiano) stated that he wanted the OLBEU to have
more information and more input into the direction and the operation of the LCBO, we
have heard very little from the government or the LCBO," Coones said.
"We asked the government to allow our union (OLBEU) to be represented on the LCBO
Board of Directors and while he said that was something he would consider, there has
1 Source: http://www.nupge.ca/news_2004/n26no04a.ht, November 26, 2004
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