Trade obstacles within the country continue to keep small and craft alcohol producers from distributing alcohol across provinces, according to the “Bottled Up: Barriers facing small business in interprovincial alcohol trade” report published by the Canadian Federation of Independent Business.
The report indicated that old rules and complex processes are restricting local alcohol producers from expanding across provincial borders despite agreements to relax trade limitations and public calls for reform. Interprovincial trade challenges faced by alcohol companies include:
- Red tape and complicated regulations
- Lack of transparency and communication from regulators
- Inconsistent markup rates
- Significant shipping costs
SeoRhin Yoo, CFIB senior policy analyst for interprovincial affairs, noted that duplicative lab testing requirements were a hindrance that led to increased costs and limited opportunities for local entrepreneurs.
“Allowing direct-to-consumer shipment of alcohol would be a significant step forward, but it’s only one part of the solution small brewers, distillers and vintners want to see. Businesses that want to move pallets of their products, not just bottles, still face myriad barriers that make it not worth the hassle,” Yoo said.
The CFIB encouraged provinces to collaborate on the full implementation of alcohol-related commitments under the Canadian Free Trade Agreement and the recent Memoranda of Understanding on on direct-to-consumer alcohol sales. The federation also called for the development of a strategic rollout plan for May 2026.
The CFIB urged governments to broaden commitments on mutual recognition agreements to include provincial rules, regulations and requirements on alcohol. It also called for improved transparency on listing processes and mark-up structures.
Moreover, the federation recommended launching a cross-provincial working group focused on alcohol trade reform. It also asked the government to offer small businesses clear, accessible guidance on interprovincial requirements.
“When American liquor products were pulled from store shelves across Canada in response to U.S. tariffs, it opened space that could, and should, have been filled by Canadian producers,” said Keyli Loeppky, CFIB’s director of interprovincial affairs, in a statement. “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.”
Canada has over 1,500 breweries, wineries, and distilleries.