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Ontario Cancels ID Scanning Pilot at Northern LCBO Stores, Surprising Executives, Emails Reveal

LCBO executives expressed surprise at the Ontario Ministry of Finance’s abrupt decision to cancel an anti-theft pilot program shortly after its announcement, documents obtained by CBC News reveal.

Finance Minister Peter Bethlenfalvy halted the “controlled entrances” pilot less than 48 hours after its announcement, despite being briefed about it weeks earlier, according to the documents.

The pilot program aimed to have security guards scan customers’ identification and collect personal data at the controlled entrances of six stores in Thunder Bay, Sioux Lookout, and Kenora, starting this spring.

This initiative was modeled after security measures implemented by Manitoba Liquor and Lotteries (MBLL) in 2020 at select Liquor Mart stores in response to rising thefts. MBLL reports a significant reduction in thefts and robberies since the measures were introduced.

Emails between LCBO executive managers, obtained through a freedom-of-information request, reveal confusion and frustration regarding the ministry’s decision.

The documents reveal that senior LCBO executives briefed the Ministry of Finance on the pilot and shared detailed plans multiple times in the weeks leading up to its announcement.

Ian Lee, an associate professor at the Sprott School of Business at Ottawa’s Carleton University, stated that the pilot’s cancellation is just one of several provincial decisions causing issues for the LCBO.

In April, Premier Doug Ford, in a Sunday night email to the CEO, ordered the immediate return of paper bags, documents obtained by Radio-Canada show. This unexpected directive left LCBO executives scrambling to procure a new supply.

Additionally, two weeks ago, the province mandated that the LCBO provide discounts to private-sector retailers like grocery and convenience stores, which will soon be allowed to sell beer, wine, cider, and ready-to-drink beverages at prices lower than those at the LCBO.

This provincial order is expected to reduce LCBO sales by an estimated $150 million to $200 million per year, according to the Ministry of Finance.

“They’re interfering with the day-to-day management of the LCBO,” said Lee.

He noted that government actions affecting profits can be especially risky for Crown corporations. Unlike privately owned companies, Crown corporations cannot declare bankruptcy, meaning they could continue to incur losses indefinitely.
“It’s owned and backed up by the taxpayer, and so the losses are as long as and deep as the government is willing to pay. There’s no market discipline.”