KUBEK: New Alcohol 'Deal' Replaces Trade Barriers With Provincial Toll Booths

When Canada’s premiers announced an agreement to allow direct-to-consumer alcohol sales, it sounded like a long-overdue victory for internal trade.

After years of promises and missed deadlines, Canadians were finally going to be able to order Canadian wine, beer and spirits directly from Canadian producers.

Unfortunately, that is not what the agreement delivers.

The agreement gives participating provinces the option to permit direct sales, but it also allows them to require registration, licensing, reporting and record keeping. Provinces can also impose fees and liquor-board markups.

In other words, the new “free trade” agreement comes with its own tariffs.

I own Lightning Rock Winery, a small family winery in Summerland, British Columbia. We produce approximately 4,800 cases a year. We grow grapes, make wine, welcome visitors and ship orders ourselves.

When one of our Pinot Noirs won national recognition last year, wine lovers from across Canada tried to order it. Many were in Ontario. We filled those orders even though Canada’s confusing provincial rules meant we were technically not permitted to ship them.

I have said publicly that I would welcome a province trying to prosecute us. Imagine the headline: a Canadian winery charged for selling Canadian wine to a Canadian customer.

That is how absurd the system has become.

This agreement was supposed to fix it. Instead, it risks formalizing a system in which a small winery must register in multiple provinces, file separate reports and pay markups to liquor agencies that did not market, warehouse, sell or deliver the wine.

The customer found us. We grew or purchased the grapes, produced the wine, promoted it, processed the order and packaged it. A commercial carrier delivered it. The destination province can collect its normal sales tax.

Why should a provincial liquor board receive a percentage of a sale it played no role in making?

This is not a theoretical concern. As The Globe and Mail recently reported, Nova Scotia imposes a five-per-cent fee on direct shipments from Ontario. Ontario applies variable markups to direct shipments from Nova Scotia, ranging from 1.6 per cent on wine to 32.5 per cent on spirits.

Calling these charges “fees” or “markups” does not change what they are. They are tariffs on Canadian products crossing a provincial border.

These costs and administrative requirements hit small producers hardest. A large company can maintain compliance departments and reporting systems across several jurisdictions. At our size, every new form and registration takes time away from growing grapes, serving customers and building the business.

There is an immediate federal solution.

Parliament should pass Conservative MP Dan Albas’s Bill C-262, or incorporate it into government legislation. The bill would establish a federal framework allowing Canada Post and other designated trusted carriers to deliver beer, wine and spirits directly to consumers across provincial borders, with proper age verification and secure delivery.

As currently drafted, the principal trusted-carrier provisions would not take effect until one year after royal assent. If the federal government is serious about creating one Canadian economy, it should shorten that delay and make the system operational within months.

The provinces could then accept legal direct shipping or attempt to defend their barriers against federal action. That would be a more honest debate than celebrating a non-binding agreement while every province creates another set of tolls.

Direct shipping should be the first step, not the last.

Canada should also establish a national market for wine made from 100 per cent Canadian-grown grapes. Wine certified under a recognized provincial quality program should receive fair access in other provinces, including access to provincial liquor-store shelves without punitive interprovincial markups.

This benefit must be reserved for wine made entirely from Canadian grapes. Wine blended with imported bulk product should not receive the same treatment. The goal is to support Canadian grape growers, wineries, workers and rural communities.

We need two practical actions: pass and accelerate Bill C-262, then create a national market for wine made from 100 per cent Canadian-grown grapes.

Canadians do not need another announcement about governments intending to trade. They need the freedom to buy Canadian products from Canadian businesses without a provincial toll booth standing between them.

Ron Kubek is the owner-operator of Lightning Rock Winery in Summerland, BC