WineLaw.ca

To great fanfare, the provincial Premiers recently announced a ‘landmark’ agreement that national DTC (direct to consumer) alcohol sales for Canadian producers is coming soon. The initial agreement was short on detail, making it difficult to see how much progress had been made.

However, the details have now been quietly released. I have summarized them below. While the result is not ideal (as there are no national standards or national personal exemption), there has been progress. Particularly, the good news is that 9 out of 10 Canadian provinces now have some type of functional DTC system available for Canadian producers albeit with varying degrees of bureaucracy or fees charged. 5 out of 10 provinces currently charge no liquor board markup/fee (including Ontario for Canadian wine). 4 out of 10 currently do not require permits or authorizations (i.e. no bureaucracy). 

Canadian wineries will now be able to sell and ship their wine legally to most of the country (Quebec is currently excluded) so they can reach almost 80% of our population. Nevertheless, wineries should review applicable registration and reporting requirements carefully to understand what they are agreeing to (more on that below).

Provincial Overview

BC

Current law requires no authorization or payment of markups for Canadian wineries shipping Canadian wine to BC. However, the agreement indicates that this may change and that BC may require registration/authorization for its updated system which is set to launch in February 2027. It is unclear whether there may be changes to markups which are currently zero.

See: Liquor Possession Regulation

AB

Authorization required. Volume based markups charged. $4.69 per litre “administrative fee” is charged ($3.52 per 750 ml bottle).

See: Alberta DTC Program

SK

No authorization required. No markups.

See: s.58. Alcohol Control Regulations, 2016

MB

No authorization required. No markups. Has been this way since 2012!

See: Manitoba DTC Program

ON

Authorization required. Winery Reporting Template indicates that for 100% Canadian wine the LCBO markup is zero.

See: Ontario DTC Program, Out of Province Supplier Info, and DTC Obligations (including Template)  

PQ

Quebec is not participating in the DTC agreement at this time.

NB

No authorization required. No markups.

See: NB DTC

PEI

Authorization required. Unclear on markups/fees.

See: PEI DTC

NS

Authorization required. 5% fee payable on total retail sales.

See: NS DTC Permit Info

NF

Authorization required. 25% markup payable on wine.

See: NF DTC Program, and DTC Authorization Info

Registration/Reporting

As noted above, certain provinces now require registration/authorization for compliance which will then also require periodic reporting (quarterly or monthly) and, in most cases, the payment of markup/fees. I note that such registration/authorization will likely constitute a ‘one-way’ street and it may be difficult for a winery to withdraw once registered (especially if the reporting requirements or markup/fees change). For some provinces, a winery may need to balance the administrative requirements with the expected business to determine whether it is worth servicing that market. 

Sales Taxes and Recycling Fees

Some provinces require the collection and payment of recycling/deposit fees. Compliant sales tax reporting would also require the collection of sales taxes that are applicable in the destination province as well as the submission of those amounts (which may be simplified if the destination province uses HST).

BC Delays

I note that because BC has not announced its new DTC system (scheduled for February 2027 as noted above), BC wineries are not currently eligible to participate in the required DTC registrations for PEI and NS. Presumably, this will change once BC announces its system. In the interim, it appears that the other provinces are permitting BC winery registrations.

Note that the above information was compiled and checked on the date of publication (August 20, 2026). There may be frequent changes … and you may wish to check the sources for yourself.

As part of the Premiers’ meeting in PEI, the Premiers of 9 Provinces announced a ‘landmark’ DTC agreement today that may possibly assist with the removal of barriers to the interprovincial sale and shipment of wine across provincial borders. But it may not help at all … and it’s still not clear if or when any actual substantive progress will be made.

The text of the agreement is located here: Operating Agreement on Direct to Consumer Sale of Alcoholic Beverages.

The substance of the agreement indicates that the Provinces (AB, BC, SK, MB, ON, NB, PEI, NS, NL) commit to establishing DTC systems for sale from manufacturers to consumers in another province … but may require licenses or permits … or registrations or authorizations … and may also require the collection of taxes/fees and liquor markups. The devil will be in the details on these issues … if the administration is too complicated or if the fees are too high, then the systems may not work for wineries or consumers.

Unfortunately, there appears to be no universal system … and no blanket permissibility for DTC without the above mentioned potential caveats. As a result, it remains difficult, if not impossible, to judge whether this agreement will produce a resolution to the problems for wineries or even as to whether this constitutes any progress at all.

Notably, the agreement ONLY applies to direct to consumer sales by manufacturers … so it does not resolve or address any of the issues related to inter-provincial sale by retailers or to businesses. In addition, it does not apply to products that are bottled in another province but not manufactured there (e.g. imported wine bottled in another province).

The Schedule appears to provide limited additional information as some Provinces are indicating that they will not require DTC authorizations (MB, NB) while all the others indicate that they will require some type of authorization.

I also note that there appear to be no deadlines or even target dates for the implementation of these systems … and the agreement specifically states that it is not legally binding and creates no enforceable legal rights at all.

As noted above, there appears to be positive intent (spin?) here … but insufficient detail to judge whether or not this will amount to any meaningful change.

An analogy might be this … suppose as a university student you are assigned a term paper in first year English that’s worth 100% of your grade. You make various excuses and never hand it in … the patient professor waits 4 years without receiving it. It’s now your graduation day … and instead of handing it in, you tell them that you have just finished an outline of things that you might want to write about. And then you announce that you still want to graduate.

That’s what just happened here. The Premiers are still kicking the can down the road. After waiting decades for this, wineries and wine consumers deserve more substance and actual measurable progress.

The Canadian wine industry is facing a Titanic-style crisis. Governments at all levels have failed to remove interprovincial trade barriers that restrict the sale and shipment of wine across most provincial borders. The result is a lost opportunity for significant economic growth and mounting financial challenges for many wineries, particularly in British Columbia’s Okanagan Valley.

The situation has striking parallels to what organizational theorists call the “Titanic effect”—when regulatory systems become so outdated that they fail to keep pace with the industries they govern. The term originates from the 1912 sinking of the Titanic, when regulations permitted too few lifeboats because policymakers believed advances in shipbuilding had made such disasters virtually impossible. Regulatory complacency combined with technological overconfidence, producing a preventable catastrophe.

A similar dynamic exists in Canadian liquor regulation. Provincial liquor authorities continue to require that wine from other provinces pass through monopoly distribution systems created after Prohibition. While provinces had the authority to establish these systems within their own borders, the Constitution assigns authority over interprovincial trade to the federal government.

To reinforce provincial monopolies, the federal government enacted the Importation of Intoxicating Liquors Act (IILA), which prohibited interprovincial alcohol shipments unless they flowed through provincial liquor authorities. Although the federal government has since amended the IILA to theoretically permit direct interprovincial sales, it continues to passively allow the provinces to maintain barriers that effectively block a national market for Canadian wine.

As a result, wineries are prevented from operating efficiently on a national scale. Instead of selling directly to consumers across provincial borders, they must navigate government warehousing systems and pay substantial liquor board markups. Some provinces have resisted reform altogether, while others have proposed permitting systems so complex that they are impractical for both consumers and producers.

The provinces bear primary responsibility for this situation, but the federal government also shares responsibility. Having originally supported the monopolies through federal legislation, Ottawa now has the authority—and the obligation—to address the barriers that remain.

A practical solution would be for the federal government to create a national personal exemption under the IILA. This exemption would allow consumers to purchase and receive a specified quantity of wine from wineries in other provinces without the involvement of provincial liquor monopolies. Similar in concept to duty-free allowances for international travellers, such an exemption would permit direct shipment, eliminate unnecessary reporting requirements, and avoid liquor board markups.

This reform would bring Canada closer to the modern wine marketplace found in many other jurisdictions. By reducing internal trade barriers, it could stimulate investment, expand market access, and support growth throughout the Canadian wine industry.

The provincial liquor monopolies have created a classic Titanic effect by failing to modernize regulations to reflect today’s marketplace. It is time for the federal government to act before outdated policies inflict further damage on Canadian wineries and the consumers who support them.

BC’s hospitality industry and private liquor retailers will be celebrating today as a result of an immediate change in liquor policy relating to distribution. Effective today, BC’s private liquor retailers are permitted to sell directly to licensees in the hospitality industry (i.e. restaurants, bars, hotels). Previously, hospitality licensees could only purchase from LDB wholesale, designated government stores, or direct from BC manufacturers. 

The restricted distribution system prevented licensees from sourcing product from private stores whenever there were issues with the government distribution system (e.g. strikes) or simply to replenish stock more easily when something ran out. The ability to buy from private retail also enables smaller purchases of a wider variety of product since ordering through LDB wholesale generally requires purchase by the case. 

It is expected that this will be particularly beneficial to smaller restaurants who typically like to source lower volume, hard-to-find wines or spirits and who will now be able to buy directly from private retailers who often stock many such products that are not easily available through government channels. Larger volume purchases will likely continue to be made through LDB wholesale where licensees can purchase at the registered wholesale price.

This change has been sought by industry for many years (actually decades) and was also included as Recommendation 11 in the BTAP report which I authored on behalf of industry in 2018. The news release stated that this change is designed so as to “help B.C.’s bars and restaurants respond quickly to customer demand, especially during major special events”. Technically, the change is described as ‘temporary’, starting May 29 2026 (today) and going until June 1 2029, although it is hard to see this being reversed. Retailers cannot sell below the wholesale price at which they purchased the products and must sell directly to the licensee (i.e. not through third party delivery services).

This change is excellent news for the continuing modernization of BC’s liquor distribution and regulatory system. For food and wine enthusiasts, the reform will make it much easier for licensees to increase selection and to maintain stock of products. While the catalyst appears to have been the World Cup, many stakeholder groups and businesses have worked on this issue for a long time. Kudos to the BCLDB and Minister of Agriculture, Lana Popham, for implementing the reform.

The recent BC Budget projects a deficit of $13.3 billion for the coming year. As part of the Budget process, most branches of government, including the BC Liquor Distribution Branch (LDB), provide updated fiscal plans for the coming years. The LDB has posted its Service Plan for 2026-2028 here.

The Service Plan predicts a challenging environment for liquor sales in BC over the next few years with flat revenue and increased operating costs. This will have significant consequences for the government revenue that derives from liquor sales. Indeed, the annual LDB contribution to government revenue is projected to decline significantly in the coming years, down substantially from a pandemic era high of $1.193 billion in the 2021/22 fiscal year to just $847.3 million in the year ending in 2029. 

The table below shows comparisons for the 2021/22 fiscal year, projected numbers for the current 2025/26 fiscal year, and for the 2028/2029 fiscal year. It also adds per capita amounts of liquor revenue for each year based on government population projections.

BC	2021/22	2025/26	2028/29	Change 2022-2029
Revenue	3.751b	3.620b	3.742b	0%
Net Income	1.193b	950m	847.3m	-29%
Per Capita Amount	222.69	168.41	151.38	-32%

For British Columbia, and if the projections are correct, the table shows fairly flat gross sales over a 7 year period (which would mean a decline in volume), with a decline in net income of -29% in absolute dollars and -32% in per capita revenue. During the same time period, operating expenses rose by 34% from $508m to $680m. For comparison, and for the 6 year period ending in 2028, Alberta is projecting smaller declines of -6.7% (absolute dollars) and -19% (per capita).

The Service Plan indicates that some of the contributing causes to these declines are:

• BCGEU strike action in the 2025/26 fiscal year
• Removal of U.S. liquor products from the LDB system
• Reduced consumer demand for alcohol including health and lifestyle concerns
• General economic conditions
• Decline in immigration levels
• Increased expenses including those related to collective agreements

For more background information on the above, please see my earlier articles: Lower Consumption = Lower Liquor Tax Revenue and Liquor Markups are the Shackles That Are Impeding Canadian Wine Businesses.

Yesterday, the Conservatives put forward a private member’s bill (Bill C-262) that was described as being a solution to Canada’s national problems with interprovincial alcohol shipment (DTC). The proposal is described more fully here: Conservatives Want To Make It Easier to Mail Alcohol Between Provinces. You can also read the actual text of Bill C-262 here. Internal Trade Minister Dominic LeBlanc even said that he thought the idea was a “good one”.

While I support both the spirit of this effort and the ability of Canada Post to deliver alcohol between provinces, it seems to me that this Bill is not an adequate solution … and could create additional problems for affected wineries. My thoughts on this are as follows.

Firstly, as far as I can tell, there is nothing in the current legislation that governs Canada Post that prevents it from delivering alcohol between provinces. Indeed, Canada Post has a policy on the delivery of intoxicating beverages that states that they will currently make interprovincial shipments so long as the shipper complies with the relevant provincial laws. It is the combination of the relevant federal (Importation of Intoxicating Liquors Act) and provincial laws that creates the legal DTC problem … not the Canada Post Corporation Act.

The real problem is that there are still a number of provincial laws that make it either illegal for the customer to receive the interprovincial shipment or which impose such onerous obligations on the customer and/or winery as to make it impractical.

Bill C-262 doesn’t make any substantive changes to this legal structure … other than to explicitly state that Canada Post must provide an alcohol delivery service … and gives them an initial monopoly on doing so. In other words, it addresses the choice of ‘transport’ of the shipment rather than the overall legality of the entire transaction. It’s the latter issue that needs to be addressed to fix the problem.

At a recent AIDV webinar, a panel of experts brainstormed this issue. One of the ideas was for the federal government to proactively create a national exemption for personal shipments of alcohol between provinces. This should be done under the Importation of Intoxicating Liquors Act … which is the federal legislation that governs the trade in interprovincial and international alcohol (rather than the Canada Post Corporation Act). While there could be legal challenges, this would arguably (and practically) have the effect of over-riding provincial restrictions since the federal government has the exclusive jurisdiction under our Constitution to make laws regarding interprovincial trade.

Essentially, this would create an “internal duty-free exemption” similar to the one that is in effect at our international border for returning travellers. Canadians would be able to order and receive specified quantities of alcohol from other provinces without worrying about interference from their local liquor monopoly … a concept that works well nearly everywhere else in the world.

Indeed, this model has been working splendidly since 2012 in Manitoba where its residents have enjoyed the freedom to order alcohol from other provinces for years … without any apparent significant issues … and without any noticeable effect on provincial liquor revenues.

A national personal exemption would accomplish this and fix the problem properly. Here is my first draft of an amendment to the Importation of Intoxicating Liquors Act that could potentially fix this.

Personal Exemption

9. Notwithstanding any other Act or law, a person is permitted to import, or cause to be imported, into a province from another province an amount and type of intoxicating liquor for personal consumption that is specified by regulation and in a frequency and manner specified by regulation.

Personal Exemption Regulation

1. For the purposes of s.9 of the Act, the amounts and types of intoxicating liquor for personal consumption that are permitted are, for each person:

a) x litres of wine;

b) x litres of beer; and

c) x litres of spirits.

2. The amounts and types of intoxicating liquor specified in section 1 may be imported by each person in any 30 day period and either by in-person importation or by delivery by any common carrier from the other province.

Secondly, I do not understand why Bill C-262 proposes to give Canada Post an initial monopoly on interprovincial shipments of alcohol. Most wineries in BC do not currently use Canada Post as their preferred shipper. There are many reasons for not doing so … one of the most important of which is that they do not use temperature controlled trucks.

The Bill contemplates adding “trusted” carriers eventually … but why should those carriers have to go through a bureaucratic approval process to get the ability to do something that they are already doing well right now? If passed, the Bill would effectively prevent existing carriers from delivering alcohol until they got approval as a “trusted carrier” through some yet to be created bureaucracy. The last thing Canadian wineries need right now is to grant another ‘monopoly’ on anything liquor related to a branch of government.

So to conclude, while any discussion of these issues at the national level is helpful, I do not think that Bill C-262 solves the problem. Instead, let’s consider a national personal use exemption … and let any current common carrier make those deliveries.

On March 2, Ontario and Nova Scotia announced a deal that would enable wineries in each province to ship and sell direct to consumers in the other province. In other words, a ‘reciprocal’ deal to permit DTC … almost 2 months in advance of the target date of May 1st to resolve these issues that the federal government had previously announced.

The details of the arrangement were not provided in the news releases that each government issued. However, additional information is now available on the web sites for these provinces: LCBO (Ontario) and NSLC (Nova Scotia).

In each province, wineries will need to apply for and receive an authorization from the relevant liquor authority. They will also need to remit markup and sales taxes on a quarterly basis.

For Ontario wineries wishing to ship and sell to Nova Scotia customers, the NSLC site indicates that a “5% fee on total retail sales” will be charged (presumably plus sales tax). See this page on the NSLC site.

For Nova Scotia wineries wishing to ship and sell to Ontario customers, the LCBO site does not clearly state the relevant markup level … but these are contained in the sample templates which can be downloaded on this page.

Templates are provided for wineries, distilleries, and breweries. The winery template states that the LCBO markup is 1.6% for Canadian wine … which appears to be a typo … because the current LCBO markup for Ontario wineries is 6.1%. It would appear that the intention is to treat out of province wineries the same as in-province wineries (which would be compliant with the reasoning in the SCC Comeau decision).

Various other markup amounts are indicated for other products: e.g. 20% for “wine coolers and other wine” … and 32.5% for spirits.

These initial indications show some potential for national DTC because, while there is an additional administrative burden, they appear to be indicating that the liquor boards are prepared to reduce their ‘normal’ markups to much more reasonable levels for out-of-province producers … treating them the same as an in-province winery. For example, a 6.1% markup on a $40 bottle of wine would be $2.44. Regrettably, they are still focused on percentage based markups rather than volume-based ones (like Alberta).

Unfortunately for BC wineries, no such deal has yet been announced between BC and Ontario. In this regard, BC currently charges zero markup to Ontario wineries shipping to BC … but Ontario currently does not permit any shipments at all to Ontario consumers. I note that the BC system requires no additional administration or registration for the winery … while the ON/NS model requires registration and quarterly reporting (which, if extended, could mean doing so for all participating provinces).

Fingers crossed that all of this will be resolved promptly … and perhaps before May 1st.

In addition, I note that the above system could potentially form the basis for an international trade compliance challenge under GATT or other applicable trade agreements since domestic wine is treated much more favourably than imported wine (if we even care about such compliance any more).

The Alberta government introduced its 2026 budget today and indicated that it would remove the percentage based tax on “high value” wine that it implemented last year: see page 61-62 of this budget document which states that the tax will be removed because it created “reduced transparency and business uncertainty”.

The percentage based tax was complicated and received intense criticism from industry (see: Alberta Hikes Wine Markups). It also hindered efforts at resolving direct to consumer shipments of wine between provinces since it was almost impossible to administer for wineries in other provinces.

Instead, the Alberta government has indicated that they will revert to the volume-based liquor markups on wine that they have used for many years. The budget document indicates that this markup will increase by $0.58 per litre. As the previous rate was $4.11 per litre for most wine, the new rate will presumably be $4.69 per litre (which would be $3.52 for a 750 ml bottle).

This change is good news for Alberta food and wine culture … and for wineries in other provinces such as BC.