A new income trust?


Recently, Quebec's prime minister Jean Charest made an analogy between electricity and Alberta's success with its oil exports.

We do not intend to comment on this view but instead wish to bring forward a new idea that would help the Quebec government with its budget while increasing services to thousand of Quebecers.

In 1993, Alberta privatized the distribution of Alcohol. In 2004, a group of owners created an income trust called ''Liquor Store''. We are wondering why does the Quebec government not follow the same path?

From the french SAQ site (we could not find it in the english version!), the SAQ mandate is: ''The SAQ is a state-owned corporation responsible for the trade of alcoholic beverages and has for mission to give good service to the population of all regions of Quebec by offering a wide variety of good quality products.'' We do not believe that the privatization of the distribution outlets goes against this mission statement. In fact it probably enhances it. If we rely on Alberta's experience, here are a few conclusions:

Following the privatization of the distribution stores, the consumers would see an increase in service and in the availability of products they want while still paying less. It is a well known fact that efficiency rises when a government run company is privatized. Meanwhile, sometimes service drops. Not in this case. With competition, the stores would have no choice but to provide excellent service because their cost of goods would be identical (transport included) to their competitors. The government would continue controlling the quality of products and would fix the selling price of products regardless of the quantity purchased or the location of the sale. Hence a Loblaws would not be able to squash the small local retailer.

A new income trust could then see the day ... how is that for an idea? You could even chat about it with your MNA over a glass of wine!