Jeff Green | Aug 22, 2018
The last time beer cost a dollar in Ontario, the price of beer was higher than it is today.
Doug Ford’s “buck-a-beer” promise from the election campaign last spring had nothing to do with the beer market, fairness, or anything like that, but it had everything to do with promoting nostalgia for a simpler time.
A time that, it turns out, never existed.
The last time beer sold for a dollar a bottle in Ontario for what used to be called domestic brands, was in 1992. With slow but steady inflation over the last 26 years, a 1992 dollar had the buying power of $1.60 in 2018 currency.
A similar brand of beer today costs about $1.38, a 32-cent saving for the 2018 consumer.
The government set minimum price for a bottle of beer has been $1.25, less than what any brewery makes it for, and that has been dropped to $1, with some fanfare, by the Ford government. This move was accompanied by the promise of promotional incentives in the Crown-owned LCBO stores for brewers who take up the “buck-a-beer” challenge.
But what about the beer store? That is where the 24’s are, that is where the 10 bestselling brands in the province are sold. All of them are produced by one of two companies, Annheuser Bush -Inbev and Molson Coors, who are major shareholders in the beer stores. Together, the two companies sell 2/3 of the beer consumed in Ontario. If anyone is going to be able to sell beer at a buck a bottle in 2018 prices and turn a profit, it will be them.
While many craft brewers have responded to the challenge, most of them in defiance, the big two have been silent, as far as I can tell.
They may change their prices, and they may not. But they may consider that cutting their lowest-priced brands, which sell for $33 for 24 bottles, all the way to $24, will only cost them $9 and not increase sales accordingly. Besides, as pointed out above, beer is already selling at a pretty good price.
One more fact before moving on from this frivolous election promise and the ham-fisted attempt to deliver on it. The unemployment rate in Ontario in 1992, the glory days of a “buck-a-beer”, peaked at 12.2%. The unemployment rate in July, 2018, as Ford took power, was 5.4%.
Less unemployment, cheaper beer, and better wages.
These might just be the good old days.
Let’s move on from beer to something that really does matter.
The Ford government is quickly dismantling the Green Energy Act. Part of their election campaign was about the cost of the act, in terms of long-term hydro prices and economic growth.
They pointed out that various aspects of the act had created artificial markets for carbon, a renewable energy industry that has or will cause increases in consumer and business rates for power, and a set of regulations that ran roughshod over the rights of rural people living in the vicinity of wind turbines and even large solar farms.
Some of these accusations are well founded. The Green Energy Act was ambitious. It was attempting to transform the Ontario economy. The most striking example of this was the carbon tax and carbon market that had been created. Money was being removed from one sector, major producers and users of so-called “greenhouse gases”, and used to promote the green energy sector. The idea was that since the money was being re-directed, not held, by the government, it would create as many jobs in the new sector as it was costing in the old sector.
It’s kind of a grand scheme, and it was done in by the electorate when the Ford government was elected.
They campaigned on eliminating the act and are carrying through on that promise.
Unlike beer prices, this really matters.
The question is, what replaces the Green Energy Act?
Is the Ford government turning Ontario into a climate change denying, or at least a climate change resisting, jurisdiction?
If so, we are now heading into a war with the facts.
The argument that climate change is not real runs counter to the information provided by scientists, scientific agencies and journals, both governmental and non-governmental, around the world.
The predications of higher global temperatures, wet places getting wetter, dry places getting drier, and ice caps melting that were made 15 years ago, have come to pass.
For a jurisdiction the size of Ontario to deny or ignore this reality, and all of the social, economic and political consequences it entails, would be bad policy.
The Green Energy Act needs replacing and the process needs to commence right away because it will take time to do. One of the first real tests of the Ford government will be to see haw, even if, this happens.
In an atmosphere where the US government is rolling back clean air legislation, the Ontario government may be tempted to do some similar things, which would be policy in defiance of fact.
Nostalgia for a non-existent cheap beer past is one thing; nostalgia for a world that is not facing the reality of climate change is quite another.