A Possible Way Out of the Shipping Law Mess
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- Written by Mark Hicken Mark Hicken
- Category: Shipping, Border, Import, Export Laws Shipping, Border, Import, Export Laws
- Published: 09 October 2009 09 October 2009
As usual, I have been thinking too much about the shipping law mess that Canada has by virtue of our 90 year old post-prohibition era law, the Importation of Intoxicating Liquors Act (IILA). From a consumer's perspective, the simple solution would be to repeal the law. That would open up inter-provincial trade for the wine industry and treat wine much like any other consumer product (except for the necessary legal restrictions on age etc...). However, there are practical problems in simply repealing the legislation, the most prominent of which are: 1) the IILA acts as a legal support for the various provincial liquor monopolies, and 2) the IILA also provides legal support to various preferential provincial policies that affect the wine and liquor industries.
One way to at least start fixing the problem would be to amend the IILA so that it basically mirrors the comparable U.S. legislation governing inter-state shipping. The Canadian law says that you can't ship wine (or any liquor) across provincial borders unless it is going to the relevant government or liquor board in the receiving province. This provision is now rather foolish because it assumes that the receiving province wants all shipments to go directly to the provincial government or liquor board. Because we now have private involvement in certain aspects of the wine business, this requirement is, in fact, no longer desirable for certain product going into British Columbia (imported wine destined for agents) and Alberta (shipments direct to consumers in amounts for personal consumption). By contrast, the U.S. law (the Constitution) says that you can't ship across state borders if the shipment results in a violation of the laws in the receiving state. If our law was changed so that it did the same thing (i.e. you can ship but not if the shiment results in a violation of the laws in the receiving province) then the shipping problem is fixed for BC wineries shipping to Alberta (because of their personal use exemptions). The situation for shipments to the other provinces would depend upon their provincial laws.
From the federal government's point of view, this type of amendment would mean that they had truly passed the buck on this issue to the provinces (which is, in fact, what was the original intention of the IILA anyway). This might prove an attractive option for the federal government politically. It's not an instant fix for all of the shipping issue facing the wineries but this approach would force the provincial governments to deal with the issue. To date, most provincial governments appear to have been steadfastly refusing to deal with this, deferring to the liquor boards to do so (which have an obvious conflict of interest). I would be interested to hear any thoughts on this issue.
Shipping Laws on Wine within Canada
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- Written by Mark Hicken Mark Hicken
- Category: Shipping, Border, Import, Export Laws Shipping, Border, Import, Export Laws
- Published: 09 August 2004 09 August 2004
This article provides a summary of the shipping laws regarding wine (and other liquor) within Canada. This article is updated frequently. However, the laws in this area are changing rapidly so please contact me (or your own lawyer) in order to ensure that you have the latest information. If you are interested in wine shipping issues related to bringing wine from a foreign country to Canada, please see this article: Bringing Wine to Canada After a Trip.
The shipping of any alcohol from one province into another province was previously prohibited by a federal law (which stems from the prohibition era) called the Importation of Intoxicating Liquors Act (Canada). However, on June 28, 2012 that law was amended by Bill C-311. While the general prohibition remains in place, the Bill created a national personal use exemption for wine subject to applicable provincial laws. In June 2014, the federal government also amended the law to extend the personal use exemption to include the interprovincial shipment of beer and spirits. That amendment was effective June 19, 2014. However, the various provinces have not embraced the spirit of these changes and have created various barriers to interprovincial "direct to consumer" shipments.
The following chart summarizes my views on the ability of consumers to receive "direct to consumer" interprovincial shipments of wine under the laws in the various provinces. See the FreeMyGrapes site for more detailed analysis and other interpretations of the law.
| DTC from Winery? | DTC from Retailer? | Quantity Limits | ... | Comments | |
| BRITISH COLUMBIA | |||||
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Yes | No | Amount for personal consumption if 100% Cdn wine from winery. |
OK for Canadian wine purchased from a winery. Imported wine has different rules: subject to 9 liter cumulative quantity limit and only for "in-person" importation (no shipment). |
|
| ALBERTA | |||||
 |
Unclear | Unclear | Amount for personal consumption. |
Alberta law says that adults may "import" liquor from other provinces (and other countries) in amounts determined by regulation. It is my view that the only reasonable interpretation of the word "import" as used in these laws (see s.86 of the Gaming & Liquor Act and s.89 of the Gaming & Liquor Regulation) includes both in person transport and direct shipment. However, Alberta has recently amended the regulation (s.89), to make importation from other provinces "subject to the policies of the Board" which appear to be set out here and which restrict importation to amounts that are personally transported (i.e. not shipped). It is now likely a complicated legal issue as to whether the Board can, in fact, effectively reverse the language in the Act and Regulation through a "policy statement". | |
| SASKATCHEWAN | |||||
| |
Yes (from BC only) | No | 9 liters. |
Saskatchewan is open for DTC shipments of wine and spirits from BC only (not other provinces). An authorization (for the customer) is required from the SLGA which is valid for one year. Maximum quantity per shipment is 9 litres (one case) but multiple shipments are allowed. The customer is required to submit markup to the SLGA upon receipt of the shipment. The markup for wine is $5.25 per 750 ml bottle. See details here: Direct Shipment to Saskatchewan. |
|
| MANITOBA | |||||
| |
Yes | Yes | Amount for personal consumption. |
Thanks Manitoba! | |
| ONTARIO | |||||
| |
Yes | Yes | Amount for personal consumption. |
Ontario's laws are silent on the issue of interprovincial importation of alcohol. Generally, in law, "that which is not prohibited is permitted" so it should be ok to import wine for personal consumption as allowed by the federal law. However, the LCBO has issued a "policy statement" that disagrees with this and says that only "in person transport" is allowed. It is my view that this "policy statement" has no basis in law in Ontario. See FreeMyGrapes analysis for details. |
|
| QUEBEC | |||||
 |
No | No | 9 liters |
Provincial law restricts transport of wine not purchased from liquor board within Quebec. Regulations have been issued which allow the importation of alcohol from other provinces but they only permit 9 liters of wine per person and only if it has been personally transported (no direct to consumer shipment). |
|
| PEI | |||||
| |
Yes | Yes | 9 liters. |
It is my view that the only reasonable interpretation of the word "import" in the amended legislation includes both in person transport and direct shipment. The PEI liquor board is stating that it is not open for shipment, only for "in-person transport". In my view, this is not a reasonable interpretation of PEI law. |
|
| NEW BRUNSWICK | |||||
| |
Yes | Yes | Amount for personal consumption. |
On 2016-04-29, a NB provincial court judge found that NB laws restricting the import of alcohol from other provinces are unconstitutional. This decision was appealed to the NBCA but leave was refused (i.e. the court refused to hear the appeal, meaning that the trial level decision stands). The case is currently in the process of an appeal to the Supreme Court of Canada. |
|
| NOVA SCOTIA | |||||
| |
Yes | No | OK for Canadian wine purchased from a winery. Nova Scotia announced it is open for DTC wine shipments on June 25, 2015. |
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| NEWFOUNDLAND | |||||
| |
No | No | 1.14 liters. |
Unreasonably low quantity limit. Use of word "bringing" may exclude shipment. Note that the NL liquor board charged FedEx with shipping BC wine from a winery to a customer in Newfoundland. The case did not proceed after the defence lawyer made an argument that NL laws could not reach a federally regulated courier such as FedEx. |
BC LCLB Warns on Internet Marketing
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- Written by Mark Hicken Mark Hicken
- Category: Retail and Distribution Laws Retail and Distribution Laws
- Published: 05 December 2011 05 December 2011
Wineries and other licensees should be aware that the BC LCLB issued a statement on internet marketing in the October 2011 issue of their “Liquor Line” newsletter which is available on the LCLB website here. The statement warns licensees that the sale or advertising of any liquor product without a license is not legal in BC. It then continues by saying “[t]herefore companies like Groupon or ethicalDeal.com cannot legally include liquor as part of a promotion. Given this, it is not permitted for licensees to enter into and offer these sorts of promotions. (emphasis added)” This wording could be interpreted as prohibiting many third-party marketing companies from including liquor as part of their marketing services or promotions when they are working with a licensee such as a winery or retailer.
The question then arises: is it legal for third party marketing companies to work with licensees at all and, if so, what can they do? It is my view that it is legal for third party marketing companies to work with licensees so long as all parties pay careful attention to structuring their relationships correctly. The issues are basically the same as those faced by the California ABC which recently issued a detailed advisory on these issues (Third Party Providers - PDF) which was created after extensive industry consultation and legal advice. It’s my opinion that the analysis in the California advisory is well done and should also be applicable to British Columbia.
I have confirmed with the BC LCLB that their statement was based on an analysis of the ‘default’ method of Groupon promotion under which the marketing company processes and is an integral part of the sale. However, there are, in fact, many other methods of structuring internet promotions (some of which may be legal and some of which may not) and the LCLB has also confirmed that “each case must be considered on its own merits”. However, the LCLB has not confirmed that they will follow the same principles as have been established in California and there may well now be confusion within the BC industry as to what is permissible and what is not (as there was in California prior to the ABC issuing its ruling). In the interim, licensees should be cautious about internet marking and should obtain legal advice if they are entering into these types of marketing arrangements.
BC Wine and Trade Agreement Trouble
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- Written by Mark Hicken Mark Hicken
- Category: Retail and Distribution Laws Retail and Distribution Laws
- Published: 16 February 2010 16 February 2010
This article discusses the current structure of the BC wine industry and Canada's various trade agreements such as NAFTA and GATT. I haven't written about this issue before because it is a tricky one for the BC industry. However, I have recently been asked many questions on these issues by various players in the industry as well as by lawyers and wine consumers. I am aware that a number of our trading partners are pursuing these issues.
The Problem: I'll explain in greater detail below but there are potentially serious trade agreement problems with the current structure of the BC wine industry because the current system provides preferential treatment for BC wine (with respect to liquor board markups and distribution) which is not provided for imported wine. Why is this a problem? It's a problem because two of Canada's most important trade agreeements, NAFTA and GATT, only allow preferential treatment in very limited circumstances. Generally, we are obliged to treat domestic wine and imported wine the same. This issue is of particular concern to me because much of the BC wine industry seems unaware of the issue and particularly unaware of the potential economic consequences of changes that may be required to comply with our trade obligations.
The Shaky Foundation of Canada's Liquor Monopolies
- Details
- Written by Mark Hicken Mark Hicken
- Category: Retail and Distribution Laws Retail and Distribution Laws
- Published: 26 August 2009 26 August 2009
Only a wine lawyer could possibly be interested in the 80 year old prohibition era law that is known as the Importation of Intoxicating Liquors Act (or the IILA). Unfortunately, over the last few months, I have had far too many occasions to think about this archaic bit of law which is actually the foundation of Canada's antiquated liquor distribution system.
It was passed by the federal government at the end of prohibition and at the request of the provinces. The historical context is as follows. As most people know, prohibition was an utter failure both here in Canada and in the U.S. Alcohol consumption actually went up during that time and the prohibition laws simply made criminals out of otherwise law-abiding and productive citizens. The provinces were desperate for a way out of the mess and each of them eventually put forth the option of government control over liquor which they thought (correctly at the time) would appeal to enough people to constitute an acceptable middle ground.
Read more: The Shaky Foundation of Canada's Liquor Monopolies