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To Beer or Not to Beer Part I? A Liquid History of Economic Development in Toronto, Canada

In 2023 I visited Canada for the first time, just to Toronto. To avoid losing any holiday entitlement, I explained to my employers that I was undertaking research. Under the suspicious, but thankfully distant gaze of employer skepticism, I conducted one week of fieldwork, focused on the bars, pubs, and restaurant-bars of downtown Toronto. I was assisted in these efforts by the expertise of local beer-ologists Rasksha Raman and Prakash Raman.

Beer was everywhere; and not just the insipid, watery best-seller Coors Light, but exciting, innovative, locally produced craft beers. Beer was everywhere; it was integral to Toronto nightlife, and to the socializing that helped integrate the young-migrant population of the city and turn them rapidly into Canadians. Academic research confirms this, finding for example that beer is associated with social traditions, friends, and networking, so is a drink typically consumed socially, usually away from home. Among college students in the US, there is a sharp fall in preference for homeland beer and a rapid adoption of local beers as part of this convivial process. Migration becomes quickly associated with local beer consumption not nostalgic imports. There is a clear and positive association between consumption of US beers and length of time in the US. Beer was everywhere; and was intimately bound up with the iconic sports teams of the city, most notably, the Maple Leaf’s ice hockey team and the Blue Jays baseball team. Before every home game, the pubs and bars were crowded with fans bedecked in the jerseys of the home team. The Economist Intelligence Unit (EIU) publishes an annual ‘Global Liveability Rank’, comparing 172 cities for their quality of urban life, in 2023 Toronto rated 9th. Beer is clearly part of what makes Toronto such a livable city.

A recent biography of Toronto, published in 2015, is entirely negative about the historical impact of alcohol. Beer is often mentioned and in my reading of the book, never in a good way. There are numerous criminally salacious and delightfully prurient examples. By 1841, the city boasted 140 drinking establishments, or one tavern per hundred population, this drinking was bound up with corruption, as city officials sold tavern licenses to themselves, their friends, and their political supporters. There is a suggestion that alcohol has skewed the development priorities of city leaders. In the 1870s it was noted that a glass of ale or lager cost three cents and whisky five cents a glass, which was both cheap and safer than drinking water. This is contrasted to the various cholera outbreaks due to the lack of drains and sewers and reliance on well-drawn water, 273 died in an 1832 outbreak and 500 died in 1834. The high rate of infant mortality (children dying before they reach 6 months) averaged 153 per 1,000, this was linked to the enduring poor quality of the city water supply. In 1857, according to the Toronto police register, more than half of those arrested were because of problems related to ‘liquor’. The leader of a city newspaper between 1858 and 1868 had a section ‘Drunkards’ to report on the link between alcohol and crime. In 1886 William Howland was elected mayor, with a mandate to combat the “evil of drink and debauchery”. In 1921 there was a wild party in the Ontario legislature, attended by drunken members of government and “scantily clad secretaries”, in violation of the prevailing state prohibition act. In the early 1950s an excessive number of bar licenses were widely blamed for a perceived increase and greater visibility of prostitution in and around bars near Jarvis and Dundas St. The ‘problem’ was sensationalized in articles published in the Telegraph newspaper.

Oh dear! All beer is bad, Toronto beer seems to be very bad indeed.

Under the tutelage of my local expert interlocutors, I explored historical brewing in Toronto, keen to reconcile this paradox, the apparent historical perfidy of brewing, and the evident contemporary contribution of brewing to livability. In particular, we visited the remains of the Dominion Brewery, delightfully chronicled in a recent book – the Lost Breweries of Toronto. The Dominion Brewery (1878-1936) was associated with Robert Davies, who started a family business (Don Brewery) before striking out on his own in 1877. The new Dominion Brewery was a ready-built construction that covered half a city block with its frontage on Queen Street. The Dominion was so-named because it aimed to supply the whole Dominion of Canada. Production expanded rapidly, from 26,155 barrels in 1886 to 43,850 barrels in 1890. The brewery was prestigious; it won medals in New Orleans at a competition of the American continents in 1885 and was chosen to represent Canada at the 1893 Chicago. The Dominion closed down in 1936 as production shifted to the Cosgrave Brewery, but the Dominion hotel on site lasted much longer.

I couldn’t reconcile this evident successful story of exports, production quality, and pioneering industrialization with the grubby, surreptitious, criminally inclined story of brewing from that recent biography of Toronto. A deeper dive into brewing and its links with economic development in Toronto gives succor to the more positive story.

The scale of the Dominion Brewery is typical of historical brewing. Whether in fourteen-century Hamburg (Germany), eighteenth-century London (UK), nineteenth-century Toronto (Canada), or twentieth-century Lusaka (Zambia) breweries are always among the earliest and largest industrial establishments. This makes breweries easy to locate and subject to taxation. There is a widely accepted moral case for alcohol taxation and consequently more support for taxing alcohol than other basic consumption items, such as food or energy. Brewing creates a product (beer) for which there is a demand that doesn’t change much when taxation indices prices rise (in economist terms, demand for beer is price-inelastic). In short, brewing and beer are excellent sources of tax revenue, particularly for poorer countries that don’t have the governmental capacity to tax incomes. It is the taxation of brewing and beer that provides the revenue for imperial glory or for schools, housing, and hospitals. Between 1689 and 1815 Britain was at war for 91 years, mostly against France, and taxation of beer paid for those wars, which turned Britain into a global superpower, which included taking total colonial control of Canada. The second largest source of government revenue for the British colonial government in nineteenth and twentieth-century India was alcohol taxation. In 1920s Canada, alcohol taxes raised about 20% of total provincial (Ontario) tax revenue. The lure of these revenues was so striking that the government of Ontario nationalized alcohol sales, to claim those revenues for themselves rather than follow the US lead and strong domestic pressure for outright prohibition.

Dominion Square Brewery, Toronto

Economists have long acknowledged the unique contribution that manufacturing can make to wider economic development, through its impacts on generating employment, exports, productivity growth, and linkages with other economic sectors. Brewing has long been associated with the establishment of pioneering, and relatively large-scale industrial enterprises. The industrial history of Toronto is inseparable from the story of brewing and politics more generally. The city of York (only later Toronto) was established in 1793 and the Robert Henderson brewery, producing 30 barrels a week, was in production soon afterward. The production created a demand for social consumption and the first tavern, the Playters Tavern opened in 1806. Toronto taverns became a center of political discussion and debate. In August 1837 the Declaration of Reformers was signed at Doel’s Brewing from where an (unsuccessful) insurrection was launched. It was from brewing that the initial fortunes were made then transported Toronto businessmen into wider influence. The fortune the Helliwell family made in brewing enabled Thomas Helliwell to eventually become the director of the Bank of Upper Canada in 1834. The profits earned by Joseph Bloore from the Farmers Arms and Brewery enabled him to enter land development, and from the 1830s to lay the foundations of much of modern Toronto. Enoch Turner made enough revenue from brewing to become a prominent donor in the establishment of the University of Toronto in 1849.

There is a long-standing fear amongst contemporary developing countries of a power imbalance between large multinational corporations (MNCs) and weak local governments. In the extreme, this may allow MNCs to dominate exchanges with local government and leverage this relationship to avoid paying taxes or abiding by labor regulations, and piling burdens on local government to provide infrastructure, utility connections, and access to cheap land. Over the last seventy years, the global brewery industry has dramatically shifted from small and competitive to oligopoly. In the US, between 1950 and 2000 the number of mass-producing breweries fell from 350 to 24, as early as 1990, the top three breweries were responsible for 90% of US beer consumption. As China shifted towards an open market economy in the 1980s, there was a flood of investment in new breweries, the market shifted to consolidation after the late 1990s, and the market share of the top three breweries increased from 10% in 1998 to 40% in 2007.

Elsewhere, despite the oligopolization of the global brewery market, a niche for small-scale breweries has increasingly opened up. In the US, this dates from pro-active government legislation in the 1970s. In 1976 President Carter reduced the excise duty on small breweries. In 1979 the US removed federal restrictions on homebrewing and brewpubs (a legacy from the years of prohibition in the 1920s). A second influence has been the global shift (especially among developed countries) from consuming standardized, mass-produced beers to a preference for variety, local production, the use of traditional European brewing traditions, and an emphasis on quality rather than low prices. As a result of these policy and wider structural changes, the number of craft brewers in the US increased from 2 in 1977 to more than 1,700 in 2009. Part of the livability pleasures of Toronto are evident in the similar emergence of small-scale brewers. Some notable examples explored during the fieldwork include the Craft Beer Market on Adelaide Street who offer an extensive list of craft beers and partners with a local brewery each season to produce a unique beer to help raise money for a local women’s refuge shelter. Bellwoods Brewery on Ossington Avenue is a brewpub, with a vast list of quirky beers, my favorite being ‘Double Monogomy’, which is described as “a spin on our classic series of single hop IPAs — the delicious, controlled experiment designed to give us all a better understanding of what a hop can do when it flies solo.” Amsterdam Brewhouse is on Queen’s Quay, and here, this gentleman definitely did prefer blondes, especially the Amsterdam Blonde Lager being described, “We’ve brewed this beer fresh daily since 1986 using all-natural ingredients. It is never heat pasteurized and always cold filtered for that refreshing clean, crisp taste, and smooth mellow finish.”

After those enticing descriptions of liquid refreshment, it of course my beholden duty to turn the discussion to sewage.

Historically the construction of good sewage and water treatment has had a massive impact on both morbidity and mortality, by reducing the incidence of diarrhea or illnesses such as cholera. One study uses data on mortality and access to water infrastructure for 80 neighborhoods in Paris between 1880 and 1914 when access to sewage increased from zero to 68% of all buildings. The study finds that connection to the sewage system had a “large and positive impact on life expectancy” and reasonably concludes, that “sewers saved lives”. Another study finds that the introduction of clean water technologies explained nearly half of the overall reduction in mortality between 1900 and 1936. Clean water was responsible for 75% of the decline in infant mortality, and around two-thirds of the decline in child mortality, and led to the near-eradication of typhoid; a waterborne disease prevalent until the early twentieth century.

Historically the brewing industry has provided an important source of economic incentive, political pressure, and personal influence to clean up water. In the sixteenth-century Netherlands, water pollution was a real threat to brewers, it then took 2.5 liters of water to make one liter of beer, water constituted 85% of the final beer product, and water was also needed for cooling and cleaning brewing equipment. The brewing guilds took it upon themselves to clean up the water. In 1577, in the city of Haarlem for example, the brewing guilds brought a private lawsuit against bleachers who were dumping their waste into canals. In nineteenth-century Toronto, John Severn, the owner of the John Severn Brewery, became a councilor in Yorkville and led the political effort to create the Yorkville Waterworks to provide drinking water to the town. These examples are not just historical curiosities; in Zambia, Zambian Breweries are as equally engaged as their historical counterparts in efforts to clean up water. Here a profit-driven incentive for Zambian Breweries is in alliance with the social benefits to a wider population of clean water. In their 2022 annual report, Zambian Breweries declared,

We continued to build new partnerships and strengthen existing ones to enhance the safe and clean water supply of the communities in areas where we operate. The conservation of both the Kafue and Zambezi River basins continues to be an area of focus in our partnership with WWF.

In 2023 it appeared to me and the team of local beer-oligists, that brewing was an integral part of what makes Toronto one of the most livable cities in the world, in part by drawing in young, skilled, global migrants and socializing them into rapidly becoming Canadians. Contemporary Toronto is less a melting pot than an effervescent glass! It was a surprise that a recently published and much-lauded biography of Toronto was so relentlessly negative about the historical impact of alcohol on the city, through its impact on crime, corruption, the disrobing inclinations of secretaries, and political integrity. Inspired by the evident industrial-economic glories of the Dominion Brewery, our three intrepid researchers delved into the ‘true’ history of brewing, to provide a liquid history of economic development in Toronto. Our research found brewing in Toronto to be a crucial source of tax revenue, to be a pioneer of industrial development, that the dangers of the power of MNCs can and are being mitigated by the rise of small craft brewers, and that brewing often provides a crucial political backing for clean city water and all the attendant social benefits that bring to a wider city population.

I hope this blog has whetted your appetite for a liquid history of economic development, if so, please have a look at: To Beer or Not to Beer Part II? A Liquid History of Economic Development in Lusaka, Zambia.

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