It could be last call for up to 7,000 unionized workers at the Beer Store if the Progressive Conservative government liberalizes the sale of booze.

That’s the warning from 450-outlet beer chain — owned by Labatt, Molson, Sleeman, and 30 small Ontario brewers — as tensions with Queen’s Park escalate.

In a letter to Finance Minister Vic Fedeli, the retailer’s chair, Charlie Angelakos, notes that expanding the sale of beer to corner stores, more supermarkets, and big-box outlets could kill the Beer Store.

“The addition of a significant number of new beer retail outlets would put the viability of the Beer Store’s retail business in question and undermine our efficient, low-cost distribution system,” Angelakos wrote Wednesday.

“Doing this would result in significantly higher costs and beer prices and put the jobs of the Beer Store’s 7,000 employees at risk,” he continued.

Angelakos also noted Ontario consumers, who already pay higher provincial beer taxes than their counterparts in Quebec and Alberta, would face higher prices due to increased distribution costs.

“Retail beer prices are higher in Ontario than in Quebec because of taxes, not how beer is sold,” he wrote. “Retail beer prices in Alberta are significantly higher than in Ontario, even though Alberta beer taxes are much lower.”

Indeed, Ontario’s taxes on beer are 50 per cent higher than those in Quebec and 29 per cent higher than those in Alberta.

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The salvo came one day after the Retail Council of Canada released a nine-page study suggesting Ontario would create as many as 9,100 new jobs if beer and wine sales are expanded.

That review estimated an additional $3.5 billion would be injected into the Ontario economy annually, based on an extra $880,000 a year in sales for each licenced supermarket.

Premier Doug Ford has promised as many as 11,500 new outlets selling alcohol. That would be up significantly from the current 2,700 points of sale, which include 660 Liquor Control Board of Ontario stores, 210 LCBO agency stores, 450 Beer Stores and 450 supermarkets.

The retail council said an additional 4,028 stores would bring Ontario to the Canadian average for access to alcohol.

Angelakos’s letter to Fedeli includes a report by economists Dr. Debra Aron and Dr. Justin Lenzo that analyzes beer prices in Ontario .

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It notes that Ontario consumers pay $4.23 more in taxes for a 24-case of beer than Quebec consumers and $2.59 more than Alberta consumers.

“Because of Ontario’s high beer taxes, Ontarians pay more for beer than consumers in Quebec. Beer prices in Alberta are significantly higher than in Ontario ($4.98/litre in Ontario and $5.54/litre in Alberta) — even though the tax rates in Alberta are much lower,” the study says.

In the legislature, Fedeli said “by expanding choice and convenience for Ontario consumers, we’re expanding opportunities for small businesses right across the province.”

“Local store owners, brewers and consumers all stand to benefit from an expanded market,” the treasurer said, hailing the retail council study as a rationale for acting.

Speaking to reporters after, Fedeli would not say whether the Ontario government was planning to reduce beer taxes to the levels in Quebec and Alberta.

The Beer Store has a 10-year agreement with Queen’s Park signed in 2015.

Breaking that accord could leave taxpayers on the hook for more than $1 billion in financial penalties if Ford breaks the deal signed by previous Liberal government that allowed the expansion of sales to 450 supermarkets.

The 27-page “master framework agreement” required the brewers to invest $100 million in upgrading beer outlets over four years and to freeze prices for two years.

Those terms have already been fulfilled and the contract suggests the province would have to pay the Beer Store if it is forced to close stores and lay off employees due to a decrease in business.

“Such an award shall be calculated on the basis of the normal principles of damages for breach of contract,” the agreement says, meaning Queen’s Park could be liable for hundreds of millions in severance payments, pension liabilities and lease termination costs.

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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