The problem being that the current conservative trend towards austerity means governments are being starved of funds.
People always like to talk about how much better life in Ontario would be if we sold off the LCBO, ignoring that it brings in $2B a year of pure profit for the government.
But more importantly, having the government in retail also allows the province to set an example for employees in what are generally considered "low-wage" positions. The government usually pays more than the minimum wage for this reason. Do you think workers at privately owned liquor stores would earn as much, have the same benefits, or job security? Capitalism runs antithetical to those things. We all say we want better jobs and better pay, but few want to make the correlation that wanting something cheap goes against that.
With profits being the impetus of private business, we'd see more injuries of employees with a push to later hours, a lack of safety resources, and pressure on employees to confront theft (something not done at the LCBO by non-security staff). And it's not like the LCBO hasn't had to fight for some of that themselves, but it's a hell of a lot harder to the government to say no to unionization than it is for a private employer who can turn around and fire without cause when they catch a whiff of organization.