Federal Interprovincial Shipping Restriction Eliminated After 91 Years

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Written by Mark Hicken Mark Hicken

Category: Latest News Latest News

Published: 24 June 2019 24 June 2019

On Friday, June 21st, Bill C-97 (the 2019 Budget Implementation Act) was given Royal Assent, which means that the Bill became law in Canada. One of the sections of this Bill amended the Importation of Intoxicating Liquors Act so as to completely remove the federal restriction on the interprovincial shipment and transport of alcohol which has been in place since 1928. As a result of these changes, there is no longer any federal prohibition on the movement of alcohol between provinces. Customers of wineries (or of other alcohol shippers) may still be subject to any relevant provincial laws on the possession of alcohol that has been imported from another province but the federal law is no longer. This is a very positive step in the long fight to reform Canada's post-prohibition shipping restrictions. More analysis in the days and weeks ahead.

Agricultural Regulatory Change May Affect BC Wineries

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Written by Mark Hicken Mark Hicken

Category: Latest News Latest News

Published: 15 May 2019 15 May 2019

This regulatory update covers a recent policy change that may affect BC wineries. The policy change relates to the permissible uses for alcohol production (i.e. wineries) on property that is contained in the Agricultural Land Reserve (ALR). 

ALR Policy Change. In December 2018, the Agricultural Land Commission posted a new policy that covers the operation of alcohol production facilities (including wineries) that are located on ALR land ("Policy L-03 - Alcohol Production Facilities in the ALR"). This applies to many, if not most, BC wineries. The new policy can be read and downloaded here: ALC Policies and Bylaws. The change that wineries may wish to review is the addition of new criteria relating to the allowable "development area" for a winery on the particular parcel of ALR land upon which the winery facility is located. The new policy permits a maximum of 5% of the parcel to be used for the "development area". The calculation only includes the parcel on which the production facility is located and does not extend to other land owned or leased by the winery. The definition of development area is very broad and includes all buildings, roads, parking areas and landscaping. For example, if a winery is located on a parcel of ALR land that is 10 acres, it would be permitted a development area of 0.5 acres. Many existing wineries may be off-side with this new rule. While I would not expect the ALC to enforce the policy change in respect of existing facilities, this change may affect new winery projects and any proposed changes to existing wineries. 

BCLDB Manufacturer Info. I also note that the BCLDB has now added a section to their web site that provides information and documentation on some of the policies that they administer that relate to BC manufacturing: Info for BC Liquor Manufacturers. Particularly, there is now publicly available information relating to the categorization of wineries in BC as either "commercial" or "land-based". For example, the sales agreements for both types of wineries are now available as well as the land-based winery criteria and direct delivery information (see BC Manufacturers - Sales Agreements). This is a positive step in respect of the availability of this information to industry (although I note that the 2018 BTAP report, which I chaired, recommended that all manufacturer regulation be centralized at the BC LCRB).

 

Canadian Budget Bill Includes Removal of InterProvincial Shipping Restriction

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Written by Mark Hicken Mark Hicken

Category: Latest News Latest News

Published: 09 April 2019 09 April 2019

As noted here earlier, the Canadian Government indicated in its Federal Budget 2019 that it would amend the Importation of Intoxicating Liquors Act ("IILA") so as to remove the federal prohibition on the shipment of alcohol between provinces. The actual text of the Budget implementation bill was released last night. As indicated, the Budget Bill carries through on what was promised. Section 3(1) of the current version of the IILA prevents the shipment or transport of any alcohol into Canada or between provinces unless the alcohol is sent to the liquor authority (liquor board) in the destination province. Amendments made to the IILA in 2012 and 2014 created a limited exemption from this prohibition if the alcohol was intended for personal use and if the provincial laws in the destination province permitted it. Few provincial laws were changed to allow for the exemption (see Shipping Laws Article).

The Budget Bill proposes a more substantive change. It changes the IILA such that it only applies to shipments coming into a province from outside Canada. In other words, inter-provincial shipments of alcohol are no longer subject to the IILA prohibition at all. The earlier exemptions are removed because of this change in approach. These reforms would mean that if a winery is making a DTC shipment, then it would no longer be subject to any federal restriction on the shipment itself. The customer in the receiving province might be subject to any relevant provincial laws on the possession of imported alcohol (the constitutionality of such laws was upheld in the recent Comeau case) once the alcohol was received, but the actual shipment between provinces would no longer be prohibited. This is a positive change which will be welcomed by the wine industry if the Budget Bill passes and the changes are brought into effect.

I note on a practical level, that if these changes are to proceed, the federal government will have to pass the Bill before the end of June, when the House of Commons breaks for a summer recess. This is the last scheduled sitting of Parliament before the next federal election. There is also a news release on this issue: Canada Acts to Eliminate Barriers to InterProvincial Trade in Alcohol.

Federal Budget Promises to Remove Wine Shipping Restriction

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Written by Mark Hicken Mark Hicken

Category: Latest News Latest News

Published: 19 March 2019 19 March 2019

The Federal Budget 2019 was tabled in Ottawa today. Of note to the wine (and alcohol) industry, the Budget Document promises at p.119 to change the federal law (the Importation of Intoxicating Liquors Act or "IILA") that restricts the shipment of alcohol between provinces. Specifically, it states:

To facilitate internal trade, the Government intends to remove the federal requirement that alcohol moving from one province to another be sold or consigned to a provincial liquor authority. Provinces and territories would continue to be able to regulate the sale and distribution of alcohol within their boundaries.

This promise has the potential to positively impact the regulatory restrictions that currently prevent consumers from purchasing wine or other alcohol from other provinces. The federal restriction is a core part of the regulatory regime that prevents DTC sales and shipment and if the federal restrictions are changed, then DTC could conceivably become easier. The devil is in the details ... and, of course, in whether this promise results in actual legislative changes (particularly given the fact that an election is looming). Don't hold your breath ... but hang tight for the details and cross those fingers.