Severe budget hangover for private liquor stores
Author:
David Maclean
2004/04/21
There is deservedly a lot of talk in our province about how hostile our government is to private business, and the most recent budget helped reinforce this widely-held position.
Among the many victims of the budget are our private liquor operators. Not only were their costs increased by the hike in the PST and the liquor tax hike, they also had the foundation upon which their businesses are based pulled out from underneath them.
Hotel off sale operations exist because government grudgingly created a system under which private operators were "allowed" to eke out a narrow profit. The old system provided a small discount to liquor operators so that they could sell beer during SLGA hours at a competitive price. For sales after the liquor board stores are closed, private liquor operators must pay the same retail price as you and I, which explains why private operators in turn charge slightly more.
Budget 2004 basically took away private operators' ability to compete. From now on, hotel liquor stores have to pay the full retail price for their product, and then pass that expense on to consumers. If the fundamental laws of economics apply in Saskatchewan, it will mean less business for the hundreds of hotel liquor operators in Saskatchewan.
Our government has launched yet another assault on private business. According to Minister Eric Cline, these businesses deserve to be punished because they "make good money selling beer."
What does he mean by his notion of "good money" Is he referring to the likes of Melville's Waverly Hotel and the liquor juggernaut Royal Hotel in Weyburn The new Saskatchewan rules will adversely impact 56 per cent of the hotels across Saskatchewan.
We suppose our government views hotels in Raymore, Stoughton, Lumsden and Indian Head as greedy capitalists hoarding millions of dollars that should go toward NDP spending programs. They shouldn't be allowed to make all that "good money" selling beer.
According to Robert Joyal, owner of the Royal Hotel in Weyburn, 63 per cent of his sales occur during SLGA store hours. Under the new structure, Robert will no longer be able to compete with the government. No surprise here - he's forecasting a 50 per cent drop in his liquor sales.
This most recent assault rubs salt in the wounds of Saskatchewan business operators. We already have one of the least competitive business tax systems in North America. Businesses pay a tax on capital before they even make a dime. Our small business tax rates lag behind neighbouring provinces and US states. All told, Sakatchewan businesses operate under one of the highest effective tax rates in North America.
And don't forget about the impact of government intervention in the economy. Do you want to operate a private liquor store Forget it -- you have to compete against the government. Don't even think about opening film company in Saskatchewan because the government has already picked a "winner" in that market - the failing Mind's Eye Entertainment. If you want to establish a cable television company in Saskatchewan, you better be ready to compete with taxpayer-backed Sasktel.
There are so many reasons Saskatchewan's economy has lagged behind every province except Newfoundland for the last 40 years, and they all center around our government's anti-business policies.
It's time for our government to get out of the way of progress, and let honest entrepreneurs make a living - perhaps even a good one.