Hopefully plans by Nova Scotia’s Auditor General to find out why the provincial government has not closed Nova Scotia Liquor Corporation (NSLC) outlets show that the right decision was made.
In 2014, an internal review conducted by the NSLC recommended closing 25 rural outlets – including Mulgrave, Guysborough, Canso, Arichat, and Port Hood – and handing over liquor sales to private operators.
The move would have saved the NSLC $4.5 million a year, but would have cost at least 129 people their jobs, 50 of them full-time.
In an 11-page NSLC document, called “Small Entrepreneur Opportunity in Rural Nova Scotia,” senior managers with the corporation made the case for closing rural outlets because of a decline in sales.
The main recommendation was to turn over liquor sales in those communities to private businesses to run as agency stores.
Describing existing outlets as “oversized” and “inefficient,” the report said having the NSLC in stores, keeps local retailers viable by increasing customer visits.
The document concluded that transforming these stores with less than $2 million in annual sales would result in an estimated $4.3 million in savings, offset by $1.6 million in severance costs.
Senior managers felt the time was right for shutting down the stores, because the NSLC’s collective agreements were set to expire in 2015.
And in a report released on June 23, Auditor General Michael Pickup vowed to investigate why these recommendations were not implemented.
Pickup said the finance minister at the time was briefed on the plan in July 2014 and senior NSLC officials provided their assessment to cabinet but the McNeil government did not approve the move.
In his report, Pickup promised to complete a “more extensive” audit of governance practices due to the “ambiguity” surrounding decisions about retail networks, as well as issues identified with policy development and strategic oversight.
But of the 25 outlets on the chopping block across Nova Scotia, the corporation has closed only one.
The NSLC said outlets, including Port Hood, will see renovations this year, while others, like Arichat, have been relocated.
While there might be a sound business case for the bottom line of the NSLC to close these rural stores, the case is not as sound in the communities that would be impacted the most.
Outside of the bureaucratic bubble, these closures would kill more than 100 good jobs and remove solid businesses from the same rural communities which have suffered their share of spending cuts over past decades.
Even the NSLC’s own report notes that they are the only chain retailer in some of these communities, and rather than seeing that as an opportunity, or even as a responsibility to its local employees and customers, they are using it to justify more cuts.
After a first term that offered Nova Scotians fiscal prudence, the McNeil Liberals have wisely steered the ship toward a more balanced approach; featuring strategic investments and freezing some spending cuts.
The province’s refusal to close these stores is a good example of this new direction, but it’s not just about good politics; keeping businesses and jobs in these communities is good economics.
Rather than obsessing over dollars and cents from the NSLC’s perspective, perhaps the Auditor General should approach this from the community’s perspective.
From the local side, it’s obvious that keeping these stores open is an investment in communities and people.