Protecting public assets.

What government, municipal, provincial or federal, has not looked longingly to selling off public companies as a fast way to some ready cash? The government can promise to do nothing but good with the money. The only problem is that once the asset is gone, there is no more revenue from it beyond its corporate taxes.

But there are exceptions. There are assets that can be sold off and improve their revenues to the government. It was hoped that the lotteries component of Ontario Lottery and Gaming (OLG) could be one of these assets. The objective of dealing through a service provider, is that the government would gain from the company’s creativity, experience and knowledge of the business. The government would still get most of the revenues generated but would share a reasonable operating profit with the purchaser.

It is obvious that none of the three major companies bidding on the OLG operation was offering enough money to the government to make the deal worthwhile. The government lottery operations might not be as creative and aggressive as private enterprise but the government apparently still likes the return it is getting.

This would not necessarily be the case if the Ontario government sold off the Liquor Control Board of Ontario (LCBO). It is obvious to any business analyst that the parts of the LCBO are worth far more than the whole. Private sector wine merchants are long overdue in Ontario and the government gets the licensing revenue as well as the alcohol taxes. Selling six packs of beer is a bludgeon to upgrade and improve Ontario convenience stores.

And if the LCBO is really the largest importer of wines in North America, that business could be worth more than all the stores combined. All it has to do is look outward beyond the province, instead of inward. It could become a giant in the business.

And there is a huge recycling business in the province that can be separated and stop interfering with how customers buy their beer.

But instead a smart sell-off the Ontario government wants to sell off some of Hydro One that is already infuriating customers across Ontario because of the electrical distribution operator’s sloppy billing practices. Premier Wynne hardly needs more of Ontario’s rural electricity users hating her.

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Copyright 2016 © Peter Lowry

Complaints, comments, criticisms and compliments can be sent to  peter@lowry.me

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