As Canada works to strengthen internal trade networks and reduce dependence on the United States, the nation's independent breweries, wineries, and distilleries are confronting significant regulatory obstacles that prevent their products from reaching store shelves across provincial lines.
The Patchwork Problem
Despite some policy adjustments intended to simplify interprovincial alcohol shipping, businesses encounter what the Canadian Federation of Independent Business (CFIB) describes as a "patchwork of policies" in a recent report. This inconsistent regulatory landscape results in expensive delays, contradictory rules, and ultimately, lost growth potential for small producers.
The issue of interprovincial trade barriers has gained prominence as Canada views internal trade liberalization as a strategic response to U.S. tariffs on Canadian exports. Several provinces, including Ontario and British Columbia, have removed American alcohol products from their stores in retaliation.
A Missed Opportunity for Canadian Producers
According to Keyli Loeppky, CFIB’s director of interprovincial affairs, this situation represents a significant missed opportunity for Canadian entrepreneurs. "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," she stated in a release.
Loeppky emphasized that rigid interprovincial rules and excessive bureaucratic procedures continue to prevent small alcohol manufacturers from expanding beyond their home provinces, leaving substantial market potential unrealized.
Progress and Persistent Challenges
Canadian provinces have taken some steps toward reducing these barriers. In March 2025, every province except Prince Edward Island and Newfoundland and Labrador agreed to amend the Canada Free Trade Agreement to enhance interprovincial alcohol commerce. These amendments eventually included provisions for an e-commerce platform, a digital hub for manufacturers, and increasing or eliminating personal use exemption limits.
However, the CFIB reports that small alcohol producers continue to face significant hurdles. Each province maintains different regulations concerning labelling standards, laboratory testing, and registration requirements, all of which consume considerable time and financial resources.
SeoRhin Yoo, CFIB senior policy analyst for interprovincial affairs, highlighted the specific challenges: "Duplicative lab testing requirements, inconsistent mark-up rates, and confusing rules all add to higher costs and fewer opportunities for Canadian entrepreneurs."
To facilitate better trade conditions, the CFIB recommends that federal and provincial governments should recognize alcohol regulations from other jurisdictions, establish a multi-province working group to reform alcohol trade regulations, and provide clear, accessible requirements to small businesses seeking expansion.
Yoo added a crucial distinction: "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."
