Provinces blow past deadline to dismantle barriers to cross-border wine, spirits shipments
Provinces vowed to open up direct-to-consumer shipments of wine, spirits, beer and other alcohol products by the end of May, but as of June 1, the task remains incomplete.
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B.C.’s wineries, distilleries and craft breweries are still waiting for provinces and territories to tear down the barriers to direct consumer shipments of alcohol that they promised to do almost a year ago.
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Cutting red tape for trade in alcohol across borders was seen as an easy win in the high-profile push for interprovincial free trade. Last July, 10 provinces and the Yukon signed an agreement aimed at implementing new rules by the end of May 2026.
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As of June 1, however, a patchwork of rules remain with B.C. allowing consumers to receive direct shipments of wine from other provinces without penalty, but only inking a reciprocal deal with Alberta so far. And spirits are another matter.
“I doubt if it’ll happen this summer, so it’s just lost opportunity,” said Mike Raffan, general manager of Township 7 Vineyard & Winery. “We’re in a country under attack. We need to capitalize on (and) take the easy stuff.”
Raffan, whose winery has locations in Langley and Summerland, wanted to be optimistic about last July’s agreement, but was skeptical that it might just be “political showmanship.”
“So far, a year later, my pessimism has been justified,” he added.
Raffan said the simplest thing to do would be for all provinces to just collect sales tax on direct shipments from a winery or distillery, then exempt those shipments to another province without having to flow through the liquor distribution system of another.
“Every province (is) protecting their monopoly, and frankly that’s a dumb idea,” Raffan added.
Dominic LeBlanc, federal minister for internal trade, in a statement issued just before the memorandum’s May 31 deadline, said Ottawa has done its part to take down federal limitations with an amendment to the Importation of Intoxicating Liquors Act.
“The remaining work lies with provincial and territorial governments, as they look to complete negotiations towards a memorandum of understanding,” LeBlanc said. “It is time to fulfil these commitments and deliver the benefits Canadians and businesses have been promised.”
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In his statement, LeBlanc credited Manitoba and New Brunswick with taking leadership in fully opening up direct-to-consumer sales, and that Ontario and Nova Scotia have made progress with a bilateral agreement.
B.C. has also made some progress with bilateral agreements on some products with both Alberta and Saskatchewan.
The province’s Ministry of Agriculture and Food didn’t respond to Postmedia News questions on the matter by deadline.
One problem with the agreement was that provinces signed on to it without consulting industry, said Tyler Dyck, president of the Canadian Craft Distillers Alliance.
Dyck, who is also CEO of Okanagan Spirits Craft Distillery, which has operations in Kelowna and Vernon, said formulating a deal with provinces that all have different production agreements with producers and their own liquor-distribution monopolies is difficult.
A lot of producers already ship to other provinces, trusting that sending small amounts to consumers for personal use won’t attract attention “because it would be impossible to stop,” Dyck said.
He said provinces gain more from sales taxes, and the economic benefit derived from producers’ operations and tourism, than they might lose in revenue to their liquor distribution system.
“The only fair way to do it, if you’re actually saying it’s free trade within Canada, is to say all Canadians have the ability to buy direct from any distillery, winery, brewery, cidery, whichever across Canada,” Dyck said.
Jeff Guignard, CEO of Wines of B.C. said the only good news out of last year’s agreement is still “that we are much closer now than we were a year ago.”
“This should be the simplest agreement of our time,” Guignard said. “(But) every province wants to try to generate tax revenue out of this.”
That comes from the difficulties of allowing each province to act “as though they are their own separate country” when it comes to liquor distribution, and revenues from liquor are a substantial line item in provincial budgets, Guignard said.
Guignard argued that direct sales across borders might add up to only one per cent of all liquor sales, which would be insignificant as a total, but would be a substantial boost for individual small operators.
Guignard said he had mixed feelings when Prime Minister Mark Carney campaigned on making free trade in booze happen, because the industry has been trying to make it happen for decades.
“The prime minister, in his acceptance speech, said he wanted to do this, and all the provinces signed on to the deal,” Guignard said. But he called last year’s deal “an agreement to agree on the things you agree about, and we’ve been here before.”
