Martyn Brown: The LDB’s booze-rationing “crisis”—a sober look at the BCGEU’s COLA boilermaker

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      [Warning: this extensive analysis is intended only for long-readers.]

      Just when we thought the news couldn’t possibly get any worse—with inflation now running at the highest level in 40 years, COVID still on its murderous rampage, and our health-care system literally dying from brain-dead governments—a real calamity strikes!

      Unthinkable in its devastation. Too cruel for words. Too horrifying to behold.

      I am referring, of course, to the Liquor Distribution Branch’s decision to limit any single customer’s purchase of any single booze product in any single store to a maximum of three of those items on any single day. Excluding beer.

      Damn. How will we survive?

      No more than three—count 'em, three—of any one thing on the shelf.

      All of which are selling out faster than toilet paper at Costco on an early COVID day.

      Hell, as of today (August 21) the LDB’s online product list “only” boasts some 3,298 wines, 1,290 spirits, and 204 offerings of coolers and ciders. And 459 beer products, which again, aren’t yet rationed.

      Apocalypse now.

      And all because of the BCGEU’s job action that began last Monday and shut down the LDB’s distribution centres and wholesale customer centres in Delta, Kamloops, Vancouver, and Victoria.

      Which, on Wednesday, further led LDB Liquor Wholesale Operations to immediately suspend all orders for LDB-distributed products and temporarily shut down its webstore. On Friday, it suspended online wholesale ordering of cannabis.

      Unless you’re stone drunk or haven’t tortured yourself with the news for a while, you probably know that this is only the beginning of the BCGEU’s phased strike campaign.

      Its main goal is to secure a cost-of-living adjustment (COLA) for its 33,000 direct government workers.

      Same as the inflationary salary protection that all MLAs have, in addition to the 10 percent retroactive pay hike the NDP cabinet ministers voted themselves on the cabinet-related portion of their salaries.

      Same as the COLA protection that renowned mediator Vince Ready recently recommended (page 7) in ending the longest-ever transit dispute in B.C. history.

      Same as was last provided to the BCGEU nearly two decades ago, with the 3.2 per cent COLA that was issued in March 2003.

      Yet the government has rejected that eminently reasonable demand as a model for negotiated settlements with B.C.’s nearly 400,000 public-sector workers whose unions are, or soon will be, at the bargaining table.

      That, despite the fact that those workers’ wages have actually fallen in real terms over the last decade, net of inflation.

      That’s due to negligible salary increases of typically one to two percent per year since Kevin Falcon ruled the B.C. Liberal government roost in 2012 as finance minister.

      You might say that COLA is the whisky in the beer of this fast-bubbling labour-boilermaker, which now threatens to spill over into the entire unionized public sector.

      It’s only the third BGEU strike in the last 40 years, with the last short one occurring in 2012 and the one prior to that way back in the early 1980s.

      A fact that confirms the BCGEU is one B.C.’s least militant unions. It is rarely so riled at the bargaining table as to advance its bargaining aims through a withdrawal of labour in protest.

      The BCNU, HEU, CUPE K-12, BCTF, BC Ferry & Marine Workers' Union, UNITE HERE Local 40, and others all stand in solidarity with the BCGEU and are encouraging their members to legally support its job action.

      So does would-be NDP leader and B.C. premier Anjali Appadurai.

      She’s now actively supporting all those public-sector workers’ fair fight for a COLA inflationary wage protection.

      Good on her.

      Too bad none of the government-whipped MLAs or the opposition B.C. Liberals have had the courage or good sense to do likewise.

      Escalated job action the result of government's obstinacy

      Buckle up, because unless the Horgan government soon comes to its senses, we’re in for a rough ride on the labour front in British Columbia.

      Remember, those 33,000 BCGEU members working for the province aren’t just those 5,600 LDB employees working at its distribution centres, at its 198 government liquor stores, and at its 33 B.C. Cannabis Stores.

      As the BCGEU website reminds us, “Their jobs include protecting children, providing financial assistance to the poor, protecting the environment and managing our natural resources, caring for the mentally ill in institutions, staffing provincial correctional facilities, fighting forest fires and providing the government's technical and clerical services.

      “Our union is also proud to represent thousands of members in health care, community social services, education, highways maintenance, casinos, credit unions, municipalities, regional districts and other employers.”

      All of those services are on the line if this strike escalates, due to the Horgan government’s obstinate stance at the bargaining table.

      Understandably, B.C.’s nurses, health-care aides, and hospital support workers all want some form of COLA protection, in addition to other improvements in their working conditions.

      Especially after all they have also been obliged to endure from COVID and related staff shortages, also caused by years of successive governments’ neglect and underfunding.

      Ditto for teachers, other educators, and school-support workers, and for all employees across the public-service spectrum.

      Instead, their supposed allies in the NDP government are offering the BCGEU a wage hike that would amount to a de facto salary cut at today’s inflation rates, which last month rose in British Columbia to 8.0 percent.

      The only province in Canada where inflation actually increased.

      And now this: the Times is now reporting that “Inflation is now forecast to hit 18.6% early next year.”

      “Economists at Citi, the American Bank, expect the rate of price rises for consumers to be nine times the Bank of England’s target in light of the latest jump in energy prices. They say that UK inflation is 'entering the stratosphere' and that affordability concerns are 'growing more deafening by the day."

      No wonder the BCGEU is not prepared to trust the Bank of Canada’s inflation projections predicting a two to three percent inflation rate by the end of next year. It’s been wrong every time. 

      The government is offering a cumulative wage lift of 10.9 per cent over three years.

      That’s a fraction of B.C.’s cost-of-living increases at today’s CPI rate, even if it falls as expected in the next few years. In which case, the COLA would cost even less, if it applied at all.

      Again, whatever happens, all MLAs will have that inflationary impact covered by their salary COLA protection.

      But not the almost 400,000 workers who are also paid with your tax dollars. They can all go to hell, the Horgan government seems to be suggesting.

      Meanwhile, StatsCan reports that average wages in B.C. for all permanent workers with no union coverage increased by 40.6 percent from July 2012 to July 2022. As compared to only 28.9 percent for all unionized workers in the private and public sectors.

      That statistic runs counter to the prevailing narrative that union workers always get heftier annual wage hikes than their nonunionized counterparts.

      All of which has brought us to this point, so early in the burgeoning solidarity campaign for fair wages and better working conditions, now laser-focused on LDB liquor supply and sales.

      Alliance of Beverage Licensees (ABLE BC) executive director Jeff Guignard has had a good run in the media during the BCGEU strike.
      ABLE BC

      Media cranks up citizens' outrage

      Fear and anger already abound, as the media has predictably fuelled with its coverage bent on also increasing public frustration, including in today’s Province.

      Once again, Global News took top prize in that regard with this story last Friday.

      It was filed by reporter Richard Zussman after apparently failing in his Twitter trolling expedition to find people willing to go on-camera about how their planned weddings might be impacted by the LDB’s liquor sales limits.

      That Global report was one of several stories featuring B.C. Alliance of Beverage Licensees executive director Jeff Guignard warning us all of the impending devastation the BCGEU strike will cause for B.C.’s bars, pubs, and private liquor stores.

      In addition, B.C. Restaurant and Foodservices Association president and CEO Ian Tostenson was widely featured in several interviews in which he more artfully chastised the BCGEU job action.

      The cannabis industry also weighed in on how it could lead to shortages at B.C. pot shops.

      It was pretty much the same story on Global News at 6, all doom and gloom.

      Most of that news coverage neglected to note that those establishments can also purchase B.C. craft beer and B.C. wine directly from local producers.

      There are 524 of them, to be exact, posted here on the LDB’s private distributors’ list.

      Most reports failed to mention that the LDB is also currently developing a program to authorize nurseries and small-scale cultivators producing up to 3,000 kilograms of cannabis annually, or less, to direct-deliver to retailers.

      Of course, it’s true, all those private retailers are bound to feel the brunt of those liquor and cannabis supply shortages that are impacting their businesses. They’re all struggling to recover from the COVID lockdowns and restrictions.

      Still, the hospitality industry might have mentioned that only a year-and-a-half ago, the Horgan government also handed all of its businesses a whopping windfall, as described in the LDB’s 2021/22 Service Plan.

      “Early in the pandemic, government took urgent action to support restaurants, pubs and tourism operators with liquor licenses by allowing them to purchase alcohol at a wholesale cost on a temporary basis. To continue to assist this sector in its recovery and moving forward in the future, the model was made permanent on February 23, 2021.

      “These licensees—whose businesses have been particularly impacted as a result of the COVID-19 pandemic—had previously paid a retail mark up on products purchased from the LDB; the wholesale price is the same paid by government and private liquor stores in the province when they purchase stock for retail sale. The change benefits an estimated 8,500 businesses employing upwards of 190,000 British Columbians.

      The LDB estimates the change will mean a $71 million annual reduction in revenue, assuming that hospitality sales return to pre-pandemic levels.” [Emphasis added.]

      Let’s also not forget that the Christy Clark government’s B.C. Liquor Policy Review made 73 recommendations that were largely adopted.

      Chief among them was a new wholesale pricing model introduced in 2015 that drastically reduced private liquor retailers’ cost of alcohol purchased for resale from the LDB.

      As a result of those two big changes, all liquor vendors, including BC Liquor Stores, now purchase beverage alcohol at a common wholesale price. Instead of at the much more expensive differentially applied mark-up cost previously paid by private retailers, let alone the hospitality industry that had to formerly purchase its resale products at government liquor store prices.

      You can bet those wholesale liquor price reductions cost the public treasury a pretty penny—all of which went straight towards padding those businesses’ profit margins.

      Far as I know, none of those savings were passed on to consumers in private liquor stores, bars, pubs, restaurants, clubs, or anywhere else.

      Talk about inflation protection.

      It’s a huge transfer of wealth from the public purse to those companies’ corporate bank accounts. One which should go some way toward alleviating their short-term financial pain from this labour dispute.

      Yet those same establishments’ organizational representatives now seem to think the BCGEU is being unreasonable by striking to secure a measure of long-overdue inflationary protection.

      As a result of relatively recent government policy changes, liquor licensees are paying much lower prices for alcohol than before the pandemic.

      Government liquor stores change with the times

      Before anyone jumps to vilify the LDB, it’s worth noting that it was once again recognized this year as one of B.C.’s top employers for the 14th straight year.

      It’s come a long way from the brutally bureaucratic entity described in this 2011 piece in the Straight.

      That’s largely because of the impressive contributions made by BCGEU members in modernizing the LDB that I, for one, greatly appreciate.

      I love the government liquor stores on almost every account but pricing, which is really a factor of government markup policy aimed at driving its net revenues.

      Where is B.C. Liberal Leader Kevin Falcon on this labour dispute and its implications for the LDB, anyway?

      I must say, he’s been remarkably silent on the issue.

      Especially given his role as Christy Clark’s finance minister in 2012, with specific regard to the LDB’s deregulation and modest privatization initiatives at that time.

      Someone should ask him where he specifically stands on the idea of privatizing the LDB’s wholesale distribution operation.

      It’s an idea bound to become more topical as this strike drags on and more seriously impacts private liquor retailers and hospitality businesses caught in the crossfire.

      Much as the Fraser Institute hoped in 2003 to convince the Campbell government to mirror Alberta’s move to privatize liquor retailing a decade earlier, it actually made a good case not to do that.

      Its study, written by University of Alberta professor Doug West, largely illustrated that fully privatizing government liquor stores mostly served to enrich private companies.

      Under privatization, the Alberta Liquor Control Board percentage markup was similarly replaced by a uniform wholesale price—pretty much as now exists for all liquor players in B.C. 

      But by selling off or closing its government liquor stores, 90 percent of total ALCB staff were fired, amounting to some 1,866 permanent, part-time, and casual employees.

      What happened? Sure, many more new private liquor stores opened up. But with more employees at far lower wages.

      West found that “the average wage paid by private liquor stores in February 1996 [under privatization] … was half that paid by the ALCB to liquor store clerks at the top of the scale…”

      Privatizing B.C.’s government liquor stores sure wouldn’t do any favours for LDB workers, or for that matter, anyone living in smaller communities or in rural B.C.

      Product selection would be significantly worse, if liquor stores even operated at all in the smallest communities.

      Profit would be the only thing that mattered, which would effectively represent a transfer of wealth from government employees and the public treasury to private companies and shareholders.

      Hell, even Alberta didn’t really end its public monopoly on liquor distribution.

      As Wiki explains, “the AGLC maintains a monopoly over the wholesale distribution of wine, distilled spirits and imported beer—the distribution operation itself being contracted out to a private operator.”

      Namely, Connect Logistics, which “Unlike more traditional wholesalers … does not buy or take possession of any product. Instead, Liquor Suppliers and Agents continue to own their product until it is sold.”

      In other words, that private contractor serves to coordinate, warehouse, and distribute private liquor stores’ purchase orders and purchases. It doesn’t pay to buy and manage its own liquor inventories, as such, as the LDB does in B.C., including for sale to private vendors.

      B.C. Liberal Leader Kevin Falcon hasn't had much to say during the recent BCGEU strike.
      B.C. Liberals

      Falcon should be wary of privatization

      Albeit, the LDB’s alternative Liquor Warehouse Program works a little differently.

      It allows domestic agents and distributors to manage their inventory of imported liquor, with them also “responsible for all costs and expenses related to the transportation, insurance and storage of their imported liquor up to the time of delivery to the LDB distribution centres”.

      Under that program, warehouse operators store their imported alcohol, but are still not allowed to directly sell those products to wholesale or retail customers. That final step has to be done through the LDB.

      If Falcon had any inkling to privatize the LDB, following former Alberta premier Ralph Klein’s example in capitalizing on public anger flowing from his province’s public-sector liquor strike in 1993, he might think again.

      Ontario’s Premier Doug Ford initially had similar designs when he hired former Alberta MP and provincial Conservative cabinet minister Ken Hughes as his special advisor to conduct his Beverage Alcohol Review.

      His 2019 report did lead to some major legislative changes. Although they have not been proclaimed into law. They’re mostly aimed at deregulating the industry, increasing competition and eventually ending Ontario’s egregious Beer Store monopoly.

      But even a hawk like Hughes ultimately concluded that the “LCBO consistently receives high marks from Ontarians. Provincial dividends also play an important role in funding Ontario's hospitals, schools and infrastructure.  

      The government should not privatize the LCBO. Expanding the number of private retail outlets will create new opportunities for the LCBO to expand its role as a wholesaler to retailers and licensees, and help deliver even greater value to Ontarians.” [Emphasis added.]

      In short, he pretty much recommended following in B.C.’s footsteps, not in Alberta’s.

      Falcon might want to remember as well that the LDB’s 2022 Service Plan reports that as of 2016, some 83 percent of its retail customers were satisfied with its service.

      It’s shooting to raise that retail customer satisfaction level to 86 percent in this year’s survey. A target that will be so much tougher to reach as things stand.

      As this strike drags on, the Horgan government might be pressured to designate the LDB as an essential service, which Labour Minister Harry Bains could do under Part 6 of the Labour Relations Code.

      That would oblige the Labour Relations Board to keep the LDB somewhat operational, with prescribed essential service levels.

      However, there’s probably a snowball’s chance in hell of that happening—for good reason.

      First, because it would be very hard to justify the LDB pickets as posing an “immediate and serious danger to the health, safety or welfare of the residents of British Columbia”.

      Health? If anything, alcohol consumption is itself a health risk linked to cancer, heart failure, addictions, and other health ailments.

      Safety? Right. Like the challenges ensuing from alcohol abuse, sometimes aggravating mental illnesses. Safety challenges that plague our streets, often underlie physical assaults, and lead to impaired driving.

      Welfare? That’s a tougher one. Whose welfare are we talking about? Businesses’ economic welfare?

      Read this legal opinion that the BCGEU’s legal team recently sent to the Public Service Agency.

      It makes a very strong case highlighting the test set by Chief Justice Brian Dickson in RWDSU v. Saskatchewan, [1987]:

      “I do not mean to suggest that any economic harm to a third party will suffice to justify the abrogation of the right to strike,” he wrote. “In an interdependent economy it is inevitable that a work stoppage in one industry will entail detrimental economic consequences for at least some individuals in other industries.

      “These principles suggest that the relevant question, therefore, is whether the potential for economic harm to third parties during a work stoppage is so massive and immediate and so focussed in its intensity as to justify the limitation of a constitutionally guaranteed freedom in respect of those employees.” [Emphasis added.]

      The courts have long reinforced the importance of Canada’s constitutionally protected right to strike. Including in this excerpt quoted from the B.C. Supreme Court in Health Employers Assn. of British Columbia v. HEU, 2007:

      “Strikes are an effective economic tool in securing collective agreements because of the widespread disruption they cause to both the employer and unrelated third parties,” it said.

      “The latter become a captive audience who may bring pressure to bear on an employer to settle the terms or conditions of the collective agreement with its employees. Broader communities who are affected by the workplace dispute can also bring pressure to bear on both sides to settle their differences.”

      Strikes are about exerting economic and political pressure from those most effected by them for the parties to either go back to the bargaining table or settle their dispute with the help of mediation or even binding arbitration.

      Why not bring in Vince Ready, to let him work his magic once again?

      Probably, because he’s already tipped his hand about what he thinks is fair and the NDP government won’t like that.

      Why is COLA such a bogeyman?

      The LDB pickets hardly rise to the level of a catastrophic and widespread economic collapse of an industry or a community that the BCGEU’s legal opinions agrees would likely engage the “welfare” language in section 72 of the Labour Relations Code.

      Many, if not most, strikes indirectly impact third parties negatively.

      Forest industry strikes, for example, can have hugely negative repercussions for the entire housing and construction industry, for value-added manufacturers, for the newspaper industry, and more.

      No matter how badly people might want to buy and drink their preferred types of alcohol, it’s not the end of the world having to make do with “only” beer or B.C. wine.

      Not at home. Not in restaurants, bars or pubs. And not even if that’s all that’s available for retail sale at private liquor stores.

      In any case, instead of directing public anger at the BCGEU, the media might instead call out the Horgan government for its hypocrisy and unfair resistance to COLA.

      I don’t see Horgan offering to give up and pay back his retroactively self-authorized annual $10,000 cabinet salary bump, or the $5,600 annual raise his cabinet gave itself.

      That would be true leadership in his bid to convince public-sector workers to settle for a one-time $2,500 signing bonus.

      I don’t see him, or his NDP caucus, or for that matter, any MLAs offering to suspend their annual COLA pay hikes. That, too, would be more persuasive leadership in trying to convince the BCGEU to give up its fight for that same inflation protection.

      Today, the BCGEU escalated its job action by “calling on members to refuse all non-emergency overtime. The overtime ban will not apply to BCGEU members employed in BC Wildfire Service for the duration of the current wildfire season.” 

      So, please, spare me the sob stories about how “unreasonable” the BCGEU and all public-sector workers are being by wanting fair inflation-protected wage lifts.

      With so many critical public services now all starved for skilled workers, paying them a bit better with some form of COLA is a no-brainer.

      Arguments to the contrary are enough to drive me to drink. 

      Fortunately, I’ve still got a few bottles of nice single malt Scotch stashed away for this metaphorical rainy day that anyone could have seen coming from as far back as last spring, when collective bargaining began.

      Martyn Brown was former B.C. premier Gordon Campbell’s long-serving chief of staff, the top strategic adviser to three provincial party leaders, and a former deputy minister of tourism, trade, and investment. He also served as the B.C. Liberals' public campaign director in 2001, 2005, and 2009, and in addition to his other extensive campaign experience, he was the principal author of four election platforms. Contact him via email at