The former Alberta cabinet minister advising Premier Doug Ford’s government on a revamp of Ontario’s alcohol retailing will be paid $1,000 a day, the Star has learned.
Ken Hughes was hired two weeks ago by Finance Minister Vic Fedeli to be the Progressive Conservatives’ point person on negotiating changes to pave the way for beer and wine to be sold in corner stores.
His compensation will be $1,000 a day, to a maximum of $200,000 over his one-year contract, plus expenses.
By comparison, retired TD Bank chair Ed Clark earned just $1 a year when he advised former Liberal premier Kathleen Wynne on bringing beer and wine sales to 450 of Ontario’s 1,500 supermarkets.
Hughes’s experience in Alberta’s liquor business started before the province privatized its stores, and continued afterwards. Corporate filings show he was a partner in Alberta Spirits Inc., which was incorporated in 1988. Alberta’s Progressive Conservative government sold off the province’s liquor stores five years later. Alberta Spirits Inc. was eventually sold to a company now known as Alcanna, which, among other things, operates Liquor Depot, Alberta’s largest booze retailer.
Hughes, a Tory MP under prime ministers Brian Mulroney and Kim Campbell from 1988 until 1993, was not in provincial politics during Alberta PC premier Ralph Klein’s sell-off.
By the time he was elected provincially in 2012, where he served in former PC premier Alison Redford’s cabinet in energy and municipal affairs, he was no longer in the liquor business.
Hughes, who was not made available for comment by the government, has a goal of expanding the sale of alcohol to corner, grocery, and big box stores.
Fedeli’s office said Hughes “is being compensated commensurate with Treasury Board guidelines for special advisers.”
“He brings a wealth of experience from industry and government to the position. He has indicated to us he holds no private interests in the alcohol sector and hasn’t for more than a decade,” Robert Gibson, the treasurer’s press secretary, said Wednesday.
“As with any appointment to an agency, board or commission, he was subject to a conflict of interest screening process,” said Gibson.
In a major speech last week, Fedeli said the Tory government at Queen’s Park will treat Ontarians “like responsible adults” with an expansion of the availability of beer and wine.
“We are taking steps to revolutionize the way we deliver services, and that includes how people buy alcohol,” he said, stressing there are no plans to sell the Liquor Control Board of Ontario monopoly, which operates 660 outlets and about 210 rural agency stores.
“Quebec has over 8,000 retail stores selling beverage alcohol. In Ontario, any guesses? Less than 3,000.”
But breaking the province’s 10-year agreement with the 450-outlet Beer Store — negotiated by Clark and Wynne in 2015 — to increase points of sale could cost taxpayers $100 million in penalties.
Under that master framework agreement signed with the parent companies of Labatt, Molson, and Sleeman, the province would be on the hook for infrastructure investments the Beer Store made.
That’s because the retailer agreed to spend $100 million on capital improvements to its stores in the first four years of the pact.
Because the brewers made those expenditures, a source noted “the Beer Store, Labatt, Molson, and Sleeman would all have contract and tort claims against the government, as well as ministers and other government officials involved in breaching the master framework agreement.”
Ford downplayed that last Friday.
“First of all, you’re assuming — like the media always assumes — that’s going to happen. That’s not necessarily the case, because we’re in negotiations with the Beer Store,” the premier said, dismissing the beer giant as a “foreign-owned company.”
“I’m a business guy. You put more beer in locations — we have 10,000 convenience stores and probably a couple of thousand retail stores — your sales are going to go up.”
Robert Benzie is the Star’s Queen’s Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie