Trade barriers continue to challenge interprovincial alcohol sales: report

A Canadian Federation of Independent Business report places focus on small and craft alcohol producers' challenges with interprovincial trade barriers.

Bridgeland Distillery, a Calgary-based venture established in 2018, knows the trouble of trying to sell its products outside of Alberta.

“It’s simpler to look at markets like Japan and the U.K. than to look at Ontario and B.C.,” co-owner Jacques Tremblay said.

Only this past spring was he able to get his whisky, brandy and spirits on shelves in Saskatchewan, after the Saskatchewan Liquor and Gaming Authority reached out to the distiller, welcoming its products.

“Right after the tariffs from the U.S. Therefore, there was an opportunity on the shelf—all of these American products had been pushed aside, and people were craving more Canadian content,” Tremblay said.

The Canadian Federation of Independent Business (CFIB) says even though agreements have been signed recently, “outdated rules and complicated processes” are still proving to be challenges for small and craft alcohol producers.

The CFIB said in its report, Small Business Barriers to Interprovincial Alcohol Trade, the current system is costly and limited, hindering the growth of small producers.

Officials say the tariff war should have helped, but didn’t.

“Instead, rigid interprovincial rules and excessive red tape continue to hinder small alcohol producers from expanding beyond their home provinces, leaving significant growth potential untapped,” said Keyli Loeppky, CFIB’s director of interprovincial affairs, in a news release.

The CFIB says Canada’s alcohol industry faces excessive red tape, poor transparency and communication from regulators, wide variability in markups and high shipping costs.

The organization says direct-to-consumer platforms are a positive step, but much more can be done.

Tool Shed Brewing Company, also Calgary-based, has been able to sell products in Saskatchewan, Manitoba and B.C.

“We fought to get into British Columbia. That’s a really tough market. Ontario is basically a cartel, and it’s almost impossible,” said Graham Sherman, president and founder of Tool Shed Brewing Company.

“Which is unfortunate as a Canadian, to not have access to the largest distributor of alcohol on planet Earth. That’s the Ontario liquor board.”

Sherman’s brewery produces approximately 10,000 cans a day, and less than 10 per cent are distributed out of province.

“Different rules that you have to contend with, different people that have different mandates, different government agencies or private liquor stores. … You throw out the rulebook every time you go to a new province and start again, learning, ‘How are we going to get our alcohol into this province?’” he said.

“That elbows-up campaign was magnificent. I just don’t want the premiers to stop talking about lowering the interprovincial barriers, whether it’s beer or anything else.”

The CFIB says provinces must work together to fulfill all the commitments under the Canadian Free Trade Agreement and move toward nationwide alcohol trade reform.

“It’s absurd that Canadians can’t easily purchase alcohol products made in their own country,” said Loeppky.

“If we can’t fix barriers at home, how can we expect our businesses to meet goals to expand international trade? Provincial politicians need to put protectionism aside and work towards true free internal trade in Canada.”

Minister of Service Alberta and Red Tape Reduction Dale Nally provided CTV News with a statement:

“Alberta has the most fair, transparent and competitive liquor system in Canada. We continue to lead the nation in knocking down trade barriers for the liquor industry, providing all liquor manufacturers, regardless of their province or country, with the opportunity to sell their products in Alberta,” the statement read.

“While other provinces and territories have signed an MOU with our province to help enable more direct-to-consumer sales, they should be taking additional steps to reduce interprovincial trade barriers for liquor.

“When these barriers are knocked down, Alberta companies are given more opportunities to sell their products into new markets and show the rest of Canada what our industry has to offer.”