Ontario's public revenue from alcohol sales is falling sharply due to the Ford government's ongoing modernization of the LCBO. This includes significant tax breaks and reductions in product markups.
Finance Minister Peter Bethlenfalvy explains, “When you modernize a system, one of our principles has been to try and have a level playing field, reduce the tax and market, and allow fundamentally competition.”
However, these changes are leading to a substantial reduction in revenue flowing into the treasury. According to the 2026 budget, LCBO revenue for 2025-26 is projected at $1.7 billion, down from the previously predicted $1.9 billion and significantly lower than the $2.4 billion recorded a decade ago, adjusted for inflation.
The government expects LCBO revenue to slightly increase to $1.9 billion next year. However, overall alcohol tax revenue is expected to plummet to $262 million, down from $593 million in 2023-24.
Opposition leader Marit Stiles criticizes the government’s approach, stating, “This government continues to tinker with the LCBO, something that works well and provides important revenue for health care in this province. And that’s very concerning.”
The decline in alcohol consumption, particularly among younger demographics, is also contributing to the reduced revenue.