The Progressive Conservatives are working closely with lobbyists and industry associations to promote expanded beer and wine sales — and internal government emails reveal an alliance was in place months ago.
As the Tories strive to keep Premier Doug Ford’s campaign pledge to sell beer in corner stores, they have been co-ordinating efforts with the Ontario Convenience Stores Association (OSCA), the Retail Council of Canada, and other lobby groups.
Produced in partnership with private-sector lobby groups — including the convenience stores association, the retail council, Ontario Craft Brewers, and Free My Booze, an online campaign for liberalizing alcohol sales — the site is registered to the provincial government and went live May 15.
In a news release, Dave Bryans, chief executive officer of the OSCA, said “in conjunction” with Queen’s Park, the convenience stores “launched an educational website to clarify all the fictional stories or myths around beer retailing and sales in the province.”
“Fiction: Re-evaluating the contract with the Beer Store will cost taxpayers up to $1B in damages,” says the site.
“Fact: Let’s be clear: nowhere in the province’s contract with the Beer Store are there any set financial penalties for ending the contract early or breaching any of its conditions,” it claims.
But as the Toronto Star has reported, the 27-page agreement contains wording that says changes would come with costs.
“An arbitration tribunal … shall treat all obligations in this agreement … as binding and enforceable against the province despite its status as the Crown, even where the alleged breach results from a change in legislation or public policy,” the agreement states.
“Such an award shall be calculated on the basis of the normal principles of damages for breach of contract.”
A potential $1 billion payout to the Beer Store, owned by Labatt, Molson, Sleeman and 30 small Ontario breweries, has been a hot topic since the Star quoted brewery industry sources citing that figure on April 23.
Mayor John Tory has suggested Ford is cutting transfers to the city of Toronto in order to offset the looming payout to the breweries.
“Where is the sense in that?” Tory said May 6.
“Cutting public health programs and daycare programs so as to find the extra money … potentially hundreds of millions of dollars … to pay the Beer Store to change their contract? What does that say about our priorities?”
Asked Wednesday about the mayor’s comment and the $1 billion penalty, Treasury Board President Peter Bethlenfalvy said “that’s pure speculation on his part.”
“We haven’t done anything on that,” Bethlenfalvy told CBC Radio’s Matt Galloway on Metro Morning.
But the deal signed four years ago by former Liberal premier Kathleen Wynne with the 450-outlet Beer Store to expand the sale of beer to 450 supermarkets is constrictive.
Under the terms of that master framework agreement, the province could be forced to compensate the brewers for $100 million already spent on infrastructure improvements, lost profits during a two-year price freeze in the contract, and other costs.
If ultimately the 7,000-employee retailer is forced to wind down, taxpayers could be on the hook for severance payments, pension liabilities, and broken lease penalties, inflating the potential price-tag to $1 billion.
Mindful of the challenges and complexities of dismantling the system, the government and convenience stores have been working together behind the scenes for months.
Documents obtained through freedom-of-information (FOI) legislation reveal Finance Minister Vic Fedeli was contacted on his personal email account by Bryans last summer.
“Vic, I know you are still getting settled in your new ministry and as an association we wanted to start a discussion within your ministry on the opening of retailing beer as part of the election commitment,” wrote Bryans on July 4, five days after Fedeli was sworn in as treasurer.
The minister responded from his Progressive Conservative caucus email account, normally reserved for internal political correspondence and, like his private account, not subject to freedom-of-information laws.
Sometimes, however, such personal emails are retrieved during FOI requests for documents because copies have been forwarded to government accounts.
“Dan: Can you pls have someone reach out to Dave,” Fedeli wrote July 31 to his chief of staff Dan Miles.
That came after a July 27 message from veteran lobbyist John Perenack of Strategy Corp. to Fedeli’s director of communications Clint Thomas.
“Dave Bryans and the Ontario Convenience Stores Association (OCSA) asked me to extend an offer of help to you and your colleagues as a resource on the alcohol retailing file,” wrote Perenack.
Less than an hour later, Rahul Bedi, Fedeli’s policy director, said the office “would be happy to connect with Dave and the OCSA to hear their perspectives on this.”
After an Aug. 20 meeting in the finance minister’s office, Perenack said “we’re pulling together a package of info that we think will be helpful to you.”
A spokesperson for Fedeli defended the minister’s use of personal email to conduct government business.
“The minister treats his obligations under the Freedom of Information and Protection of Privacy Act seriously,” Robert Gibson said Wednesday.
“Through the regular course of business, constituents, stakeholders, and other organizations frequently contact him both in his capacity as minister of finance and the MPP for Nipissing,” said Gibson.
“In this instance, the minister was contacted by a stakeholder and he forwarded the request to a Ministry of Finance staff member to be dealt with through the appropriate channels.”
After all the messages back and forth, the government partnered with the convenience stores association and other groups for the website.
Robert Benzie is the Star’s Queen’s Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie