Ontario budget 2024: LCBO and cannabis store set to see drop in revenue, but gambling could jump

With residents continuing to deal with affordability issues, provincial officials say the 2024 Ontario budget is expecting a drop in consumer spending at the LCBO and the Ontario Cannabis Store.

According to documents tabled at Queen’s Park on Tuesday, the LCBO is expected to see $2.45 billion in the 2024-2025 financial term, down by an estimated $96 million from the financial year ending at the end of March.

The Ontario Cannabis Store, the provincially owned entity that sells cannabis products to residents, is expected to make $225 million in the year ahead, which is down by $17 million from the past year.

Provincial government staff said they believed the reason for the forecast revenue drop is due to alcohol and cannabis being viewed as areas of discretionary forms of spending and likely ones Ontario residents may cut back on.

While alcohol, cannabis and cigarette purchases could be on the decline, officials are expecting to see a rise in gambling.

Ontario Lottery and Gaming (OLG), the entity with oversight over lotteries and casinos, is expected to make an extra $272 million (up to $2.62 billion). When it comes to the regulator that oversees private gaming, iGaming Ontario, it’s expected to make an extra $12 million (up from $162 million).

Taxes on land transfers, gas, and tobacco tax collections on the rise

To help bolster the provincial finances in 2024, the government will see a rise in revenue from a number of taxes.

Ontario is starting to see a rebound in the amount of land transfer taxes collected amid a housing crunch after a dip between 2021 and 2023 . The province is set to receive $3.88 billion, up $142 million.

Even as the Ontario government continues its 5.7-cent-per-litre gas discount until the end of 2024, the budget expects to see a $289-million rise in gas tax revenue (up to $1.95 billion) and a $124-million jump in fuel taxes (up to $623 million).

Meanwhile, it also appears there’s another decline expected for cigarette sales in stores. The budget forecasts $56 million less in tobacco tax revenue. With $771 million expected in 2024-2025, it marks yet another year-over-year decrease in revenue. In 2021-2022, the province raked in $927 million. Meanwhile, officials said they’re looking to strengthen fines for contraband tobacco as part of a modernization of provincial tobacco laws. Alcohol-related taxes are also set to decline to $576 million (down from $599 million).