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.
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As noted by the Trudeau government, plastic substitutes contribute to lower air quality and “typically have higher climate change impacts” due to higher GHG emissions.
Recently at the White House, President Donald Trump signed an executive order reversing the Biden administration’s plan to phase out plastic straws. The Trudeau government, however, continues with its plan to ban single-use plastics, even though this prohibition will have minimal impact worldwide, will actually increase waste in Canada, and force a transition to alternatives that impose greater environmental harm. Rather than doubling down on a flawed policy, the next federal government should reverse Trudeau’s plastic ban.
In 2021, the Trudeau government classified plastic items as “toxic,” paving the way for the ban on the manufacturing, importing and selling of checkout bags, cutlery, stir sticks and straws—all single-use plastics. In 2023, the Federal Court deemed the designation “unreasonable and unconstitutional”—but the Trudeau government defended the measure and is appealing, with a ruling expected this year.
According to the latest available data, Canada’s contributes 0.04 per cent to global plastic waste. The United States contributes 0.43 per cent—more than 10 times Canada’s share. But neither country is a major contributor to global plastic waste.
According to a 2024 article published in Nature, a leading scientific journal, no western country ranks among the top 90 global plastic polluters, thanks to their near-total waste collection and controlled disposal systems. Conversely, eight countries—India, Nigeria, Indonesia, China, Pakistan, Bangladesh, Russia and Brazil—generate more than half of global plastic waste. And nearly 75 per cent of the world’s ocean plastic comes from Asia with only six countries (Philippines, India, Malaysia, China, Indonesia and Myanmar) accounting for most of the world’s ocean plastic pollution.
The Trudeau government’s own science assessment, cited in the court appeal, states that 99 per cent of Canada’s plastic waste is already disposed of safely through recycling, incinerating and environmentally-friendly landfills. Despite these facts, plastic has become a target for blanket restrictions without fully considering its benefits or the downsides of switching to alternatives.
Consider this. Plastics are lightweight, durable and indispensable to modern life. From medical devices, food packaging, construction materials, textiles, electronics and agricultural equipment, plastics play a critical role in sectors that improve living standards.
Alternatives to plastic come with their own environmental cost. Again, according to the government’s own analysis, banning single-use plastics will actually increase waste generation rather than reduce it. While the government expects to remove 1.5 million tonnes of plastics by 2032 with the prohibition, it will generate nearly twice as much that weight in waste from alternatives such as paper, wood and aluminum over the same period. Put simply, the ban will result in more, not less, waste in Canada.
And there’s more. Studies suggest that plastic substitutes such as paper are heavier, require more water and energy to be produced, demand more energy to transport, contribute to greater smog formation, present more ozone depletion potential and result in higher greenhouse gas (GHG) emissions.
As noted by the Trudeau government, plastic substitutes contribute to lower air quality and “typically have higher climate change impacts” due to higher GHG emissions.
While plastic pollution is a pressing global environmental issue, Canada is not a major contributor to this problem. The rationale behind the Trudeau government’s plastic ban lacks foundation, and as major economies including the U.S. go back to plastic, Canada’s plastic prohibition becomes increasingly futile. The next federal government, whoever that may be, should reverse this plastic ban, which will do more harm than good.
Julio Mejía
Policy Analyst
Elmira Aliakbari
Director, Natural Resource Studies, Fraser Institute
Stocks sunk Thursday afternoon despite President Donald Trump’s decision to grant major exceptions to the 25% tariffs he put on Mexico and Canada earlier this week.
All three major U.S. market indexes were in the red by the time of Trump’s afternoon bill signing. Trump said Thursday in the Oval Office that steel and aluminum tariffs were on track for next week without modifications.
Trump shrugged off the stock losses, blaming the decline on “globalists.”
“I think it’s globalists that see how rich our country is going to be and don’t like it,” he said.
Trump has promised that his tariffs would shift the tax burden away from Americans and onto foreign countries, but tariffs are generally paid by the people who import the products. Those importers then have a choice: They can either absorb the loss or pass it on to consumers through higher prices. He also promised tariffs would make America “rich as hell.” And he’s used tariffs as a negotiating tactic to tighten border security.
Trump granted temporary tariff relief to both Canada and Mexico on Thursday by exempting goods under the United States-Mexico-Canada Agreement from tariffs until April 2.
On April 2, Trump plans to announce broader reciprocal tariffs against countries that impose tariffs on U.S. goods or keep U.S. goods out of their markets through other methods.
Since imposing his latest round of tariffs on top of trading partners this week, Trump has been paring them back. On Wednesday, Trump said the Big Three automakers – Ford Motor Co., General Motors Co. and Stellantis NV – would be exempt from his tariffs for a month.
In February, Trump took a step forward on his plan to put reciprocal tariffs on U.S. trading partners by signing a memo directing staff to come up with solutions in 180 days. Trump previously said he would put those tariffs in place on April 2 to avoid any confusion on April 1.
In his joint address to Congress on Tuesday, Trump said all countries would have to either make their products in the U.S. or be subject to tariffs.
“Whatever they tariff us, we tariff them. Whatever they tax us, we tax them,” Trump said. “If they do non-monetary tariffs to keep us out of their market, then we do non-monetary barriers to keep them out of our market. We will take in trillions of dollars and create jobs like we have never seen before.”
The United States-Mexico-Canada Agreement, or USMCA, governs trade between the U.S. and its northern and southern neighbors. It went into force on July 1, 2020. Trump signed the deal. That agreement continued to allow for duty-free trading between the three countries for products largely made in North America.
U.S. goods and services trade with USMCA totaled an estimated $1.8 trillion in 2022. Exports were $789.7 billion and imports were $974.3 billion. The U.S. goods and services trade deficit with USMCA was $184.6 billion in 2022, according to the Office of the United States Trade Representative.
