Quebec Automated Liquor Facility 600% Over-Budget to $300 Million

New SAQ Distribution Center | Modernity, at what price?

Published in La Presse, by Stéphanie Bérubé

The cost of the SAQ's automated distribution center project, scheduled to begin operations next year, has gone from $48.5 million to $300 million in four years. While the union believes it is a senseless expense that will lead to the erosion of store branches and the role of the advisor, the SAQ considers it essential for gaining efficiency. Just days before the Crown corporation appears before elected officials for the study of its budgetary estimates, we take stock of this project that remains largely unknown to the general public.

What is this center?

The new center will be located alongside the SAQ's head office near Highway 25 in Montreal's East End. It involves a 200,000-square-foot expansion and the automation of both the warehouses and the distribution center. This is where the SAQ receives its products to be stored. The beverages are then shipped out to branches, restaurants, and customers who purchase online.

The modernization of the center will allow for 24-hour delivery and increase the selection on SAQ.com to up to 20,000 products, available by the single bottle. To incorporate the new automated system, it was absolutely necessary to expand the current facilities, SAQ management explains. Eventually, 75% of the volume heading to the branches will be automated.

How much will it cost?

Quebec approved the construction of the automated Montreal center, known as the CAM (Centre automatisé de Montréal), in 2021. The projected costs at the time were $48.5 million. Two years later, the budget had climbed to $137 million, approved by a new decree.

Luc Bourdeau, Vice President of Supply Chain at the SAQ, explained in an interview conducted in March that several factors have evolved since the project's inception, including certain city standards as well as construction costs.

The 2023 decree thus shows a massive leap of $88.5 million to reach a budget of $137 million, but management now tends to speak of $300 million when presenting its CAM, as it now adds together the warehouse construction and the installation of the automated equipment—valued at $150 million—to present a more accurate picture of the whole project.

All this is before operations even begin, as the SAQ refuses to disclose the center's operating budget.

"It is an unacceptable lack of transparency on the part of a Crown corporation," says Verdun MNA Alejandra Zaga Mendez, who is following the issue. "There is little accountability," deplores the Québec solidaire MNA. "Why are we up to 300 million?" asks the MNA, who has also asked questions about the operating budget to which she still has no answer.

"There are fears and questions regarding the management of money, of public funds from our Crown corporation. We are the main shareholder; we should know what is being done in our name," added Zaga Mendez.

Zaga Mendez brought up the issue of the CAM's costs during the study of the budgetary estimates last year. She intends to bring it up again this year during the SAQ's hearing scheduled for next Wednesday, May 13. The MNA for Verdun would also like to know what impact this automated center will have on the workforce employed there.

Will there be job losses?

While he refuses to disclose the operating costs, Luc Bourdeau confirms that automation will lead to savings. "There will be far fewer people, because instead of processing orders manually as we do today, we will process them automatically," details the vice president.

Is it clear there will be job losses? SAQ management speaks of "a reduction in the workforce." During the study of the 2025 budgetary estimates, President Jacques Farcy stated that this "investment will make it possible to avoid hiring people in the future to perform low value-added tasks for which we sometimes have difficulty recruiting."

According to the union, there will instead be "a reduction in the number of working hours," and this will have an impact in stores if the clientele turns to online shopping rather than consulting advisors at SAQ locations.

"When people come to see us in-store, it brings a closeness with the customer. We know what they like. Generally, we even know their family and their inner circle," explains Martin Lachance, president of the SAQ store and office employees' union (SEMB-SAQ-CSN). "That is what is going to disappear."

Can the SAQ be blamed for wanting to modernize its delivery system for 2027?

No, but Martin Lachance believes that the advancement of the delivery service should go through the store branches rather than being centralized in Montreal. According to him, a nearby branch could do the job in an hour. "The order could be prepared and delivered to your home, or you could come pick it up," he details. "And in that case, we could do business with Evo or another Quebec company, rather than an American delivery company."

In a letter published in La Presse in March 2024, the union already pointed out the "striking environmental nonsense" regarding the centralization around the CAM, which would mean that an order in Gaspé could come all the way from Montreal East.

Is this centralization contradictory to the Uber Eats delivery project?

Yes, believes MNA Alejandra Zaga Mendez. "Why are we continuing to build an automated center if we already have direct delivery pilot projects for individual orders?" she asks.

Because the two clienteles are different, the SAQ replies. "It's not at all the same objective," explains Luc Bourdeau. "It's not the same channel, it's not the same type of sale. One is an ordering platform for people who need immediacy (the Uber Eats pilot project) and SAQ.com is to offer a catalog of 20,000 products."

"We have an omnichannel strategy at the SAQ," he clarifies, detailing that the customer will be able to buy their bottle in several ways and receive it according to their needs—including fast delivery via Uber Eats and future deliveries from the distribution center.

By multiplying channels, aren't we weakening some of them?

"It depends if it's a transfer or a net sale. I couldn't tell you," replies Luc Bourdeau. "I have no idea."

Customers will, however, have more choices thanks to this expansion. "We've reached the limits of our capacity for what we are able to do," explains Luc Bourdeau. "People don't understand: they go to the websites of other retailers where the selection is much larger than what is in their local store, but for us, at the SAQ, it's the opposite. The selection is larger in-store than what is on SAQ.com. This project aims to resolve that issue."

NOTE:La Presse sought to obtain the anticipated or estimated operating costs of the Automated Distribution Center once it is in operation, as well as the projections or estimates concerning the labor needs associated with operating the CAM, by filing an access to information request. However, we did not obtain the requested information. In his response, the SAQ's lawyer indicates that "the targeted documents contain, in particular, sensitive commercial information that could impact its relationship with its suppliers and employees."