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Provincial governments should follow Manitoba’s lead and allow the online sale of alcoholic beverages from other provinces

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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

* * *

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.

Business

Trump orders 10% baseline tariff on imports, closes de minimis loophole

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From The Center Square

By 

Reciprocal tariffs higher on many nations

President Donald Trump on Wednesday put the biggest piece of his new trade policy in effect by signing executive orders that place a 10% baseline tariff on all imports and much higher rates on nations that put taxes on U.S. products.

It could be the opening salvo in a global trade war, or, as Trump sees it, the beginning of a “Golden Age” for U.S. trade.

Trump also closed the small value packages loophole that allowed China to avoid taxes on packages valued at less than $800. Companies such as Temu and Shein used the loophole to ship billions of dollars worth of products directly to U.S. consumers and avoid paying the tax, as The Center Square previously reported.

President Trump speaks about tariffs at a Make America Wealthy Again event

Trump’s moves on Wednesday, which he termed “Liberation Day” for U.S. trade, marked the most significant shift in U.S. trade policy since the end of World War II.

In a speech from the White House’s Rose Garden, Trump said foreign nations for decades have stolen American jobs, factories and industries. He said the tariffs would bring in new jobs, factories and industries and return the U.S. to a manufacturing superpower.

“Our country and its taxpayers have been ripped off for more than 50 years,” Trump said. “But it is not going to happen anymore.”

Trump’s supporters praised the trade overhaul. U.S. Rep. Marjorie Taylor Greene said it was time for foreign nations to pay up.

“If you want to do business in America, you need to play by our rules,” she said. “For too long, American businesses, big and small, have been ripped off by bad trade deals and unfair competition. President Trump is putting a stop to it. He’s standing up for our workers, our companies and our consumers.”

Critics slammed Trump’s trade plans.

“Donald Trump may want to call this ‘Liberation Day,’ but there is nothing liberating for working families who are grappling with the high costs of food, housing, and utilities,” said Illinois Gov. J.B. Pritzker, a Democrat. “Tariffs are a tax. They are a tax on working families, a tax on groceries, and a tax on other everyday necessities.”

Other countries planned their own responses. The European Union plans to retaliate with its own measures.

“Europe has not started this confrontation,” EU boss Ursula von der Leyen said in a speech. “We do not necessarily want to retaliate but, if it is necessary, we have a strong plan to retaliate and we will use it.”

She said tariffs are taxes “paid by the people.”

“But Europe has everything to protect our people and our prosperity,” she wrote on X. “We will always promote & defend our interests and values. And we will always stand up for Europe.”

China, the world’s second-largest economy, said Monday that it was planning to coordinate its response to U.S. tariffs with Japan and South Korea.

Japan’s Prime Minister Shigeru Ishiba said Tuesday that he was willing to fly to the U.S. to meet with Trump to get an exemption for Japanese vehicle makers. He also said the government will take steps to minimize the impact of U.S. tariffs on Japanese industries and jobs.

Trump will impose a 10% tariff on all countries that will take effect April 5, 2025 at 12:01 a.m. EDT. Trump will impose an individualized reciprocal tariff on the countries with which the United States has the largest trade deficits, including China, India and Vietnam, among others. All other countries will continue to be subject to the 10% tariff baseline, according to the White House.

“These tariffs will remain in effect until such a time as President Trump determines that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated,” according to a White House fact sheet.

Trump’s executive order also gives him authority to increase the tariffs

“if trading partners retaliate” or “decrease the tariffs if trading partners take significant steps to remedy non-reciprocal trade arrangements and align with the United States on economic and national security matters,” according to the White House.

“Foreign cheaters have stolen our jobs, ransacked our factories and foreign scavengers have torn apart our once beautiful American dream,” Trump said in the Rose Garden.

For China, the tariff rate will be about 34% on imports from the world’s most populous nation. For European Union countries, it will be 20%. For Japan, the duty will be 24%. Imports from India will get a 26% tariff. Cambodia will get hit with a 49% tariff, among the highest Trump outlined on Wednesday.

For months, the U.S. Chamber of Commerce has warned that tariffs could increase costs for U.S. consumers and hurt businesses. Neil Bradley, the chamber’s chief policy officer, said businesses large and small don’t want tariffs.

“What we have heard from business of all sizes, across all industries, from around the country is that these broad tariffs are a tax increase that will raise prices for American consumers and hurt the economy,” he said.

Last week, Trump announced a 25% tariff on imported automobiles and auto parts, duties that he said would be “permanent.” The White House said it expects the auto tariffs on cars and light-duty trucks will generate up to $100 billion in federal revenue.

Trump said he hopes to bring in $600 billion to $1 trillion in tariff revenue in the next year or two. Trump also said the tariffs would lead to a manufacturing boom in the U.S., with auto companies building new plants, expanding existing plants and adding jobs.

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Alberta

Big win for Alberta and Canada: Statement from Premier Smith

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Premier Danielle Smith issued the following statement on the April 2, 2025 U.S. tariff announcement:

“Today was an important win for Canada and Alberta, as it appears the United States has decided to uphold the majority of the free trade agreement (CUSMA) between our two nations. It also appears this will continue to be the case until after the Canadian federal election has concluded and the newly elected Canadian government is able to renegotiate CUSMA with the U.S. administration.

“This is precisely what I have been advocating for from the U.S. administration for months.

“It means that the majority of goods sold into the United States from Canada will have no tariffs applied to them, including zero per cent tariffs on energy, minerals, agricultural products, uranium, seafood, potash and host of other Canadian goods.

“There is still work to be done, of course. Unfortunately, tariffs previously announced by the United States on Canadian automobiles, steel and aluminum have not been removed. The efforts of premiers and the federal government should therefore shift towards removing or significantly reducing these remaining tariffs as we go forward and ensuring affected workers across Canada are generously supported until the situation is resolved.

“I again call on all involved in our national advocacy efforts to focus on diplomacy and persuasion while avoiding unnecessary escalation. Clearly, this strategy has been the most effective to this point.

“As it appears the worst of this tariff dispute is behind us (though there is still work to be done), it is my sincere hope that we, as Canadians, can abandon the disastrous policies that have made Canada vulnerable to and overly dependent on the United States, fast-track national resource corridors, get out of the way of provincial resource development and turn our country into an independent economic juggernaut and energy superpower.”

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