The world’s largest business organization is warning Premier Doug Ford against unilaterally cancelling a contract with the Beer Store and outlawing compensation payments for the companies involved.
In an ominous letter to the premier — who has made “open for business” his governing slogan — the United States Chamber of Commerce said Ford was sending the wrong message to investors.
“While the provincial government rightfully should pursue policy it deems of benefit to its constituents, it is essential this process be conducted in a manner that ensures the sanctity of existing contracts be honored,” wrote the chamber’s senior vice president Neil Herrington.
“Our strong concern is that terminating an existing contract, and doing so without compensation — something we understand is proposed in the case of the ‘Bringing Choice and Fairness to the People Act’ — risks sending a negative signal to U.S. and other international investors about the business and investment climate in Ontario,” said Herrington.
“This in turn could undermine the constructive work you and your government have done and the case the Ford government has made that the province is open for business,” he said in the letter dated Tuesday.
The U.S. chamber, which represents three million companies, is the world’s biggest business federation.
Ford met with representatives from the group during his trade mission to Washington earlier this year.
Herrington said the chamber “believes there are few factors more critical to investment and economic growth than the legal certainty and predictability fostered by the respect for the rule of law.”
“We thus strongly urge your government to work with all corporate stakeholders in the ‘Bringing Choice and Fairness to the People Act’ process to ensure that a resolution amenable to all parties is achieved in a manner that upholds your government’s heretofore strong commitment to making the private sector an engine of the province’s growth.”
The letter comes as Finance Minister Vic Fedeli is expected to pass legislation Thursday to scrap the 10-year “master framework agreement” signed by the previous Liberal government in 2015 with Molson, Labatt, and Sleeman.
That accord ensured that beer and wine could be sold in 450 supermarkets. Breaking it could cost taxpayers $1 billion in financial penalties and expose Canada to international trade sanctions because the parent companies of the major breweries are American, Belgian, and Japanese.
The Beer Store is already threatening legal action for breach of contract.
But Fedeli wants beer and wine sold in thousands of corner stores and big box outlets across Ontario and insists there will be no compensation for the foreign-owned multinationals who run the 450-outlet Beer Store.
“It is owned by three global beer giants who got a sweetheart deal from the Liberal government,” the treasurer said Tuesday.
“The Liberal government put profits ahead of people. The result is a lucrative deal for the Beer Store and their insiders. We campaigned on a promise to put the people first, including by growing jobs, expanding choice and expanding convenience for the people of Ontario.”
Fedeli stressed the Tories “need not continue legislation from a previous government or continue with bad Liberal deals.”
The Ontario Chamber of Commerce, which represents 60,000 businesses in the province, has also criticized the government for terminating a signed contract.
As well, the union representing 7,000 Beer Store employees fears massive job losses if the government breaks its agreement with the breweries.
United Food and Commercial Workers Local 12R24 has been targeting Tory MPPs on Twitter with personalized messages reminding them of the local impact of the decision.
Under instructions from the premier’s office, the MPPs have countered by posting selfies in local convenience stores where beer is not yet sold.