What to do with the NSLC?

on Apr 13 in Blogroll by

Earlier today, I made my radio debut and appeared as a guest on News 95.7’s Maritime Morning Weekend Edition to talk about a story of mine that is in the current issue of Halifax Magazine. The story largely focuses on the NSLC and what the different political parties in Nova Scotia think we should do with it.

I think it’s a discussion we need to be having.

The reality is Nova Scotia’s finances are in very poor shape. We have a barely-balanced budget, huge debt (almost $14 billion!) and debt servicing charges that amount to almost $900 million every year.

A quick way of improving the province’s finances would be to privatize the NSLC. A sale would certainly generate revenue in the billions of dollars. This money could be used to pay down the debt, would reduce the debt servicing charges and that would help make it easier to balance the province’s books. As well, more jobs would be created.

At present, the NSLC injects a little over $220 million into provincial coffers every year and the provincial government does not want to walk away from “a stable, reliable source of revenue,” the finance minister told me.

This argument is a little shortsighted.

If liquor retailers were privatized, they would make a profit and would pay corporate income taxes, so the government would still continue to receive money from liquor sales. (As a crown corporation, the NSLC doesn’t pay corporate income taxes.)

What this means is that under privatization, we’d get a big cheque for selling the NSLC, but then the provincial government would continue to collect money from the corporate income taxes retailers would pay.

While this is a simplification of the debate, I think it’s a no-brainer.

There is one last point I think that is worth mentioning. Under privatization, the price of liquor wouldn’t likely change as it would still be regulated by the provincial government. Santé!

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