From the Montreal Economic Institute

By  Shal Marriott  and Gabriel Giguère

Removing Interprovincial Barriers to Online Alcohol Sales

Canada’s provincial and territorial governments should allow consumers to shop online for alcoholic beverages produced elsewhere in the country, indicates an MEI publication.

“The restrictions imposed by provincial alcohol monopolies are such that it is sometimes easier for a Canadian producer to sell its products on the other side of the world than in the province next door,” explains Shal Marriott, research associate at the MEI and author of the study. “By allowing producers to sell their products online, directly to consumers, our provincial governments would remove obstacles to their growth.”

In 2019, the federal, provincial, and territorial governments had committed to improving interprovincial trade in alcoholic beverages. This commitment stems directly from the Canadian Free Trade Agreement, signed two years before.

Manitoba is the only province to allow its residents to shop online for Canadian alcoholic beverages from other provinces, without restriction.

British Columbia, Saskatchewan, Alberta, and Nova Scotia have partial restrictions, allowing consumers to shop online for certain categories of products from specific parts of the country.

Ontario, Quebec, New Brunswick, Prince Edward Island, and Newfoundland and Labrador each continue to prohibit consumers from shopping online for alcoholic beverages from outside the province.

“By opening the door to this online commerce, our provincial governments would allow consumers to discover new products that they otherwise cannot purchase at home,” says Ms. Marriott. “This is the kind of simple measure that could also give our microbreweries, our wineries, and our distilleries a helping hand.”

The alcoholic beverage sector contributes over $4.4 billion to the Canadian economy, according to the latest available data.

Viewpoint calling on Canada’s provincial governments to allow the unrestricted online purchase and shipment of alcoholic beverages from one province to another

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This Viewpoint was prepared by Shal Marriott, Research Associate at the MEI, in collaboration with Gabriel Giguère, Senior Policy Analyst at the MEI. The MEI’s Regulation Series aims to examine the often unintended consequences for individuals and businesses of various laws and rules, in contrast with their stated goals.

In October 2012, retiree Gerard Comeau was stopped by the RCMP and fined for bringing a too large quantity of beer and liquor from Quebec into New Brunswick, violating the personal exemption limit in place. In its ruling on the Comeau case in April 2018, the Supreme Court of Canada upheld provincial governments’ right to maintain such restrictions, provided they did not intentionally impede interprovincial alcohol trade.(1)

A year later, however, the federal government and the provinces agreed on an Action Plan “to enhance interprovincial trade of alcoholic beverages,” stemming from the 2017 Canadian Free Trade Agreement (CFTA).(2) This included increasing, and ultimately eliminating, personal use exemption limits (which set the amount of alcohol one can bring back from another province) and creating e-commerce platforms.(3)

Some progress has been made to raise or remove personal exemption limits across the country, meaning that Canadians can now import and transport alcohol more easily across most provincial lines for personal consumption, without penalty.(4) Most provinces, however, have failed to liberalize other areas of interprovincial alcohol trade, such as interprovincial online retail sales of alcoholic products, thus depriving Canadians of the benefits of greater competition, namely a broader choice of products and lower prices.

The Current State of Online Alcohol Retail Sales

There have been some efforts to allow greater freedom in online alcohol sales, such as Saskatchewan and British Columbia allowing a limited form of direct-to-consumer sales and shipping of wine and craft spirits from producers in the other province.(5) However, most Canadian provinces continue to prohibit the online retail sale of alcoholic beverages from other provinces directly to their consumers. For example, the Société des alcools du Québec (SAQ) states that while producers are not restricted formally from offering to sell to residents of Quebec, it is illegal for those Quebec residents to make such purchases and have them shipped into the province.(6)

As can be seen in Table 1, few provinces allow producers from other provinces to ship directly to consumers. Manitoba is the only Canadian province with no interprovincial online purchasing restrictions. The restrictions that have been removed in Western provinces and Nova Scotia are also relatively limited (and mainly concern wine). Quebec and Ontario retain complete prohibitions, which is hardly surprising as they are also among the provinces that have made the least progress towards the liberalization of internal trade more broadly.(7)

While we see some improvement in Alberta’s willingness to allow some direct-to-consumer shipments, continued protectionism still exists in the province’s alcohol trade. For example, in January 2024, the Alberta Gaming, Liquor and Cannabis (AGLC) corporation argued that direct-to-consumer shipping was having a negative impact on the provincial liquor monopoly.(8) In reaction, it threatened to stop selling BC wines in its stores until this practice ceased, and this position was seemingly supported by the Alberta government as there was no action to condemn the stance of the AGLC.(9)

Although a memorandum of understanding was reached six months later, ending a temporary ban that had been imposed, this showcases that provincial liquor monopolies, and provincial governments, are willing to enforce interprovincial trade barriers that ultimately deprive Canadian producers and consumers.(10)

The Benefits of Direct-to-Consumer Purchasing Online

There has been a general growth in the online consumer goods market, but Canadian producers and consumers of alcohol products have been unable to fully participate in, and benefit from, this opportunity. This protects provincial alcohol monopolies with their brick-and-mortar stores, which are thus shielded from online competition, at the expense of consumers and producers, whose ability to engage in trade with each other is limited.(11)

Liquor monopolies thus find it easier to impose artificially high prices on the products they retail. The SAQ, for instance, imposes markups on bottles of wine which, when combined with excise and sales taxes, can account for over 75% of the retail price of the product.(12)

Abolishing these restrictions on interprovincial shipping directly to consumers would allow Canadians in any province to freely order online from alcohol producers anywhere in the country. Online sales are one of the most convenient ways for consumers to purchase alcohol from other provinces. Opening up this type of commerce would also be good for smaller breweries, wineries, and distilleries, allowing them to expand their reach within the domestic market.

The federal government has declared a commitment to an increasingly liberalized domestic alcohol market.(13) Yet, this liberalization is being hindered by provincial governments and alcohol monopolies that limit the growth of the domestic market. For the sake of Canadian consumers and producers alike, the provinces should simply allow the unrestricted online purchase and shipment of alcohol from other provinces.

From LifeSiteNews

By Andreas Wailzer

While the official goal of the bill is to protect the mental health of children and adolescents, critics have raised concerns that the bill would establish an online surveillance system for all Australians, similar to Communist China.

Australia has passed a social media ban for children under the age of 16, a seemingly prudent move but one that has raised serious concerns about online surveillance.

On Thursday, November 28, the Australian Senate passed the bill with a 34-19 vote, making it the world’s first social media ban for under-16-year-olds.

The “Online Safety Amendment Bill 2024” threatens social media companies with up to 50 million AUD (32 million USD) if they fail to comply with the requirement of verifying the age of their users.

While the official goal of the bill is to protect the mental health of children and adolescents, critics have raised concerns that the bill would establish an online surveillance system for all Australians, similar to Communist China.

“Seems like a backdoor way to control access to the Internet by all Australians,” Elon Musk wrote on X.

Journalist and free speech advocate Michael Shellenberger said that “this bill is a Trojan horse to create digital IDs, which is a giant leap into the totalitarian dystopia depicted in ‘Black Mirror,’ and already in place in China.”

The bill, which was rushed through parliament, does not give any details about how age verification will work and will not come into force until the end of next year. On November 26, the Australian Senate’s Environment and Communications Legislation Committee approved the bill under the condition that social media platforms must not force their users to give them their personal data, including information from government-issued IDs.

While this provision appears to rule out the use of Digital IDs for now, the question of how it will be enforced remains. The Guardian reports that supporters of the bill have said that platforms may use biometric methods, such as facial scans, to verify the age of its users. This would, of course, mean that social media companies would collect the biometric data of all its users in Australia.

The explanatory memorandum to the bill says that there will be “robust” privacy protections, “including prohibiting platforms from using information collected for age assurance purposes for any other purpose unless explicitly agreed to by the individual.”

“Once the information has been used for age assurance or any other agreed purpose, it must be destroyed by the platform (or any third party contracted by the platform),” the memorandum states.

However, the memorandum also explains that “compliance with the minimum age obligation” will likely require platforms “to implement systems and procedures to monitor and respond to age-restricted users circumventing age assurance.”

This suggests that social media companies could continually monitor a user while using the platform, for instance, by repeatedly doing face scans to ensure that the user is still the same and at least 16 years old.

The vaguely worded bill also does not specify which companies will be affected by the age restriction. Communications minister Michelle Rowland said that TikTok, Instagram, X, Reddit, Facebook, and Snapchat will likely be included, while YouTube will be excluded due to its educational purposes.

In addition to the under-16 social media ban requiring age verification of users, the Australian government also sought to curb speech online via a draconian “Misinformation and Disinformation Bill.” However, the government had to abandon the controversial bill after facing significant cross-party opposition in the Senate. The bill would have forced social media companies to remove information that was “reasonably verifiable as false” or if “misinformation and disinformation” could cause serious harm. The vague definitions of these terms would have allowed social media companies or the government to arbitrarily censor content it deemed unwanted.