Manitoba distiller cautiously welcomes agreement to lift trade barriers
Businesses call for supports as questions remains on newly announced deal
Brewers and distillers are cautiously optimistic as governments work to remove trade barriers that currently make it hard for alcohol produced in Manitoba to be sold elsewhere in Canada.
Earlier this week, the federal government announced it's reached a major deal with most provinces to allow beer and spirits to flow more freely across the country. The governments are expected to have a framework for the deal done within weeks.
The latest push to remove the administrative and regulatory burdens that hinder interprovincial trade has been spurred by the on-and-off threats of tariffs on Canadian goods exported to the U.S.
Brock Coutts, co-owner of Patent 5 in Winnipeg, said he hopes this make it easy for the company to ship its product to bigger markets like Ontario, though he's wary.
"Each of the provinces have a very convoluted bureaucracy with different rules," he told Information Radio. "For everyone to agree on that, I think would be a bit of a challenge."
Manitoba is one of the provinces that stand to gain the most by removing the administrative and regulatory barriers that hinder trade, which, according to a 2019 International Monetary Fund report, would add $245 billion to the Canadian economy.
The province is one of the most open to alcohol shipments, allowing residents to shop online for booze from other provinces without restrictions. The province is also a signatory of the New West Partnership Trade Agreement, which creates a single economic region with British Columbia, Alberta and Saskatchewan.
Perry Joyal, head brewer and operations manager at Torque Brewing, said their only market outside Manitoba is Saskatchewan.
The brewer had previously looked into selling its product in Ontario, but bumped against high costs, including upfront fees to get listed by that province's liquor board.
"They're actually kind of prohibitive. We would have to raise our prices to the point where they wouldn't be palatable to the consumer," Joyal said.
"Then when you add in the additional cost of having to transport everything a province away as opposed to selling in town here in Winnipeg … it's always been a little bit too expensive for us."
The governments have directed the committee in charge of implementing the Canada Free Trade Agreement (CFTA) to developed a countrywide credential recognition plan by June 1.
Tyler Dyck, president of the Canadian Craft Distillers Alliance and a vintner in B.C., said distillers and brewers essentially pay "greedy" liquor boards for shelf space.
LISTEN | Manitoba distiller talks about national expansion if trade barriers come down:
Dyck said the question is to what extent the deal will allow provinces to ship product straight to consumers in other provinces without any markup.
The federal government said most first ministers committed to allowing direct-to-consumer sales. The CFTA's action plan calls for the expansion of sales channels for alcoholic beverages.
But Dyck said that while removing interprovincial trade barriers is positive, governments should instead prioritizing other changes that help the local industry.
He said distillers in provinces that do not have incentives like agricultural rebates often can't really afford to make their own spirits, so they're forced to import.
"All our government liquor stores … they're actually helping every other country's economy much more than they're helping ours, because quite frankly, they're putting them on display and allowing them to occupy 99 per cent of the shelf space," he said.
"If we're going to have government-run liquor stores, should they not have a mandate to have Canadian content?"
Coutts said cutting the federal component of excise taxes would also help foster local growth.
"I just wonder if there's a real strong desire of anyone right now in government to tackle a problem like that," he said.
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With files from Information Radio