An unhappy booze industry asks why alcohol was left out of interprovincial trade agreement

After inebriant was excluded from a sell this hebdomad to discharge interprovincial merchandise barriers, some in the booze industry say they're perplexed and disappointed — and that they've waited long enough for provinces to make the change.

Signed on Wednesday by the provinces, territories and federal government, the agreement promises to remove restrictions on the free movement of some goods across Canada. 

However, food and alcohol were conspicuously left off the list — the latter industry having long advocated for the removal of the barriers, well before U.S. Tariffs spurred a national campaign to make free trade between the provinces easier.

“I am hugely disappointed,” said Adin Wener, managing partner of Henderson Brewing Company, a brewery, taproom and bottle shop in Toronto. “We should be one country, especially in the face of tariffs."

“I have lots of friends who have breweries that are no longer shipping to the States and we were really looking forward to other markets to ship to," he added.

While some provinces say they'll simplify direct-to-consumer alcohol sales between provinces by next spring, the industry is growing impatient, and one expert doubts it'll happen at all.

Canada's alcohol industry has been dealing with a number of economic headwinds.

Consumers, especially young people, are drinking less; as with other businesses, the cost of inputs have gone up with inflation; and for beermakers, the price of aluminum cans has gone up with U.S. Tariffs.

Interprovincial trade barriers add another layer of complications, according to Wener. That might mean extra shipping costs between provinces, different packaging requirements and different pricing structures for out-of-province alcohol, he said.

Getting all of those conditions sorted out can take a while. "By the time they put it on a shelf, it could already be two months old," he said.

Back in July, nine provinces and one territory (excluding Nunavut, Northwest Territories and Newfoundland and Labrador) signed a memorandum of understanding on direct-to-consumer alcohol sales, with the intention of removing those barriers by May 2026.

"It's not really a firm commitment. Given that we've had these kind of commitments before, we always say nothing's done until it's done," said Jeff Guignard, the CEO of WineBC, an organization that advocates for winemakers across British Columbia.

"I understand the regulations are complicated, but we haven't been talking about this for weeks. We've been talking about this for years," he added. "Our industry has been waiting, and it's having a serious impact."

Drop interprovincial trade barriers, say some Alberta liquor producers

B.C. Wine producers have a bone to pick with Alberta, especially. Their neighbouring province added an ad valorem tax on wine products sold to Albertans in April, which has made out-of-province, winery-to-consumer shipments more expensive, according to Guignard.

"It's time to tear down these interprovincial barriers and permit free movement of Canadian wine across the provinces," he said.

By excluding alcohol from the agreement, the provinces are repeating the same steps that led to the creation of interprovincial trade barriers in the first place, argued Moshe Lander, a senior lecturer in the department of economics at Concordia University in Montreal.

"Along the way, each province said, 'Well, I want a carveout for this and I want a carveout for that.' And next thing you know we have this labyrinth of exclusions and exemptions that make those interprovincial barriers so damaging," said Lander.

It's likely that the provinces are in consensus that alcohol should, at least for the time being, be off the table in any free trade agreement, he added, due to the revenue earned from provincially regulated retailers like Ontario's LCBO, the SAQ in Quebec and the NSLC in Nova Scotia.

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"Alcohol is still a direct or indirect state monopoly that generates money for the province. And so the removal of those barriers threatens their ability to make money. Because they now face more competition than they otherwise would," explained Lander.

"If you ask somebody in the Annapolis Valley, they're gonna tell you that the presence of Ontario wineries in Niagara coming onto Nova Scotia's shelves would be the end of them. Ontario would say a little competition would do you good. It'll up your game," he added.

Further to that, regional booze-makers — from wine growers in B.C.'s Okanagan to craft brewers in Newfoundland to gin distilleries in Quebec — can be a boon for local jobs and tourism, which the provinces would want to protect, said Lander.

While Guignard and Wener say some progress has been made on the issue, Lander isn't as hopeful that the barriers will be removed.

"It could happen, but I don't think that it will," he said. "And I think part of the problem is the political will has to be there among 14 people at the same time."

Journalist

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