Transit expansion will be powered by the sale of Hydro One distribution operations and fuelled by a modernized LCBO running big-box superstores, niche boutiques, and selling more beer.

That was the message from Premier Kathleen Wynne on Friday as she immediately embraced the findings of a blue-ribbon panel on wringing more money out of public-owned agencies and utilities.

“The review of government assets will ensure every public dollar is at work for Ontarians and will help build roads and transit,” Wynne said on Twitter.

Saddled with a $12.5-billion deficit and promising massive transit improvements to get the Greater Toronto Area moving, the premier asked TD Bank chair Ed Clark to find ways to improve operations without a fire sale.

“You should not rush to sell assets — rushed sales are not in the public interest,” Clark told a luncheon speech at the Metro Toronto Convention Centre.

His panel, which also includes former Progressive Conservative treasurer Janet Ecker and former NDP cabinet minister Frances Lankin, said there are “doable” ways to better monetize government-owned entities like the Liquor Control Board of Ontario and Hydro One.

“If we put our recommendations, we could free up $2-3 billion, which can be invested in transit and transportation infrastructure without increasing the overall debt or deficit,” the banking executive said, noting that’s “a fiscally prudent step to solving our infrastructure issues.

Before Clark had even finished his hour-long presentation, Wynne said Finance Minister Charles Sousa would announce measures in next month’s fall economic statement and “take action” in the spring budget.

With $29 billion earmarked for transit and transportation over the next decade — $15 billion for the Greater Toronto and Hamilton Area and $14 billion for the rest of Ontario – the Liberals are desperate for new revenue.

Clark said the government’s 639-store LCBO monopoly, which brings in $1.74 billion annually to Queen’s Park on sales of almost $5 billion, could be far more profitable.

“We were troubled that the LCBO doesn’t use its buying power to lower costs — despite being one of the largest buyers of wine and liquor in the world,” he said.

“It is critical to improve customer choice and convenience. We are not proposing changes to ‘push’ more drinking. We want changes to make changes to make purchasing alcohol more modern.”

To help craft breweries, the LCBO must be allowed to sell 12-packs of beer instead of just six-packs — though cases of 24 would remain the purview of The Beer Store — and should consider specialty stores like “a Scotch boutique.”

“The LCBO needs to adjust to the changes that are occurring everywhere in retailing as a result of the digital revolution. It needs to respond to a desire by the public to taste new, more boutique brands,” he said, conceding the booze giant is already starting to make some changes.

LCBO spokeswoman Heather MacGregor said: “Mr. Clark’s recommendations were developed with a view to maximizing profitability and enhancing the customer experience. We support and share these objectives.”

Clark also advises closing loopholes that see outlets such as Wine Rack, which are privately owned by domestic wine producers, taxed at a lower rate than at the LCBO.

Ontarians could also see more wine kiosks in their grocery stores run either by the LCBO or run by smaller Canadian wineries who don’t own the existing Wine Racks, Clark told the Star editorial board.

He took aim at The Beer Store, a government-sanctioned private monopoly owned by foreign-owned firms, AB InBev, MolsonCoors, and Sapporo.

“Ontario taxpayers deserve their fair cut of the profits generated from beer producers,” said Clark, adding the government will ensure “the brewers won’t just pass on the additional cost immediately to the consumer.”

But Jeff Newton, president of Canada’s National Brewers, which runs The Beer Store, warned higher prices will ensue for consumers.

“I don’t see how they can’t,” said Newton, noting the government already taxes beer at a rate of 44 per cent.

“Adding new taxes to The Beer Store and selling larger packs at the LCBO, where government adds another $4.95 to every case of beer, is a recipe for higher beer prices,” he said.

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On Ontario’s energy assets, Clark said some of Hydro One, the provincial transmission company, should be sold. That means liquidating Hydro One Brampton and the distribution business in Hydro One Networks.

“We only need the courage to move forward in a pragmatic way.”

NDP Leader Andrea Horwath said she wants to propose a motion requiring the majority Liberals hold a referendum before “any sale” of Hydro One.

“Our public assets don’t belong to the Liberals, Conservatives or any political party. They belong to the people of Ontario,” she said.

Conservative MPP Monte McNaughton (Lanark-Kent-Middlesex) expressed disappointment Clark didn’t push an expansion of the LCBO’s agency stores located in many rural supermarkets.

“All options should be on the table.”

With files from Rob Ferguson

NUMBERS:

639 - LCBO stores in Ontario

$1.7 billion – The annual “dividend” to the province on sales of almost $5 billion

448 - The Beer Store outlets

160 - Wine Rack boutiques

$12.5 billion – Ontario’s deficit for 2014-15

$29 billion – Slated for transit over 10 years

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