Amid warnings from the world’s largest business organization about the risks of breaking signed contracts, Premier Doug Ford insists a compromise can be reached with the Beer Store to expand sales.

Ford said negotiations are continuing despite the Progressive Conservatives’ unilateral cancellation of an accord with the major brewers signed by the previous Liberal government.

Under terms of that 10-year “master framework agreement” inked in 2015, taxpayers could be on the hook for $1 billion in financial penalties paid to Molson, Labatt and Sleeman, which control the Beer Store.

Speaking to reporters Tuesday in Lucan, near London, the premier vowed “to come up with a great deal for everyone.”

“We want to work with the Beer Store and we want to make sure that we commit to the promise that we made to have wine and beer in the corner store,” said Ford, noting he is often asked about the issue, including recently near his Muskoka cottage.

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“I was in the small town of Port Sydney the other day and there’s one store ... within miles they can go get beer and they were so excited. This couple that has a store and when I went in there, the first question out of their mouth: ‘When can we get beer and wine?’” he said.

“Everyone’s requesting it. It’s by the lake, and I don’t think it’s any different than smaller towns like (Lucan).”

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Last month, then-finance minister Vic Fedeli — who was demoted by Ford in the June 20 cabinet shuffle that anointed new treasurer Rod Phillips — passed hastily crafted legislation scrapping the master framework agreement.

Senior government officials, speaking on background in order to discuss sensitive matters, said Dean French, Ford’s then-chief of staff, spearheaded the push to take on the brewers.

“Dean felt we needed something to look strong on because we’d backed down that day on the municipal funding cuts,” a Progressive Conservative insider said, referring to the government’s capitulation to Toronto Mayor John Tory and other civic leaders on May 28 over a reduction in transfers to cities.

“So it was decided this was going to be ‘the summer of beer,’” said the official, explaining the genesis of the legislation to cancel the Beer Store contract and outlaw compensation payments for the companies involved.

French, who resigned June 21 after a cronyism scandal, hung up on a Star reporter on Friday and has not returned email messages seeking comment.

The government’s move sparked the United States Chamber of Commerce, the world’s largest business organization with three million members, to launch a broadside at Ford.

“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 honoured,” chamber senior vice-president Neil Herrington wrote last month.

“Our strong concern is that terminating an existing contract, and doing so without compensation ... risks sending a negative signal to U.S. and other international investors about the business and investment climate in Ontario,” wrote 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.”

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Former premier Kathleen Wynne’s Liberals signed the agreement with the 450-outlet Beer Store four years ago in order to allow for the sale of beer and wine in 450 supermarkets.

Because Molson, Labatt and Sleeman are owned by companies based in the U.S., Belgium, and Japan, the Ontario legislation exposes Canadian taxpayers to challenges under accord, such as the North American Free Trade Agreement and its forthcoming successor.

The Beer Store has said it is “pursuing (its) legal options” against Queen’s Park.

Any changes would not affect the government-owned Liquor Control Board of Ontario, which is retaining its monopoly for the sale of spirits and most wine.

Robert Benzie is the Star's Queen's Park bureau chief and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie

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