Month: July 2026

In the excellent recent book, the Unaccountabillity Machine, the economist Dan Davies argues that large institutions (including government) often produce disastrous systemic results that no one intends (including the institutional participants). Within these institutions, decisions are often dictated by strict policy (often outdated or inappropriate), leaving front line workers to act as human shields … absorbing negative feedback from those affected while the policies remain unchanged … and no one is accountable for the results.

Current Canadian liquor policy is a prime example of this problem. A basket of inappropriate policies are now wreaking havoc on the Canadian wine and hospitality industries … because no one has the political will to reform the outdated system that governs liquor distribution and licensing. In the words of the book, Canadian liquor policy has turned into one giant “accountability sink”.

Interprovincial alcohol shipment is the most prominent of these issues. Prohibition-era liquor control policies have created a “command and control” mentality at provincial liquor boards which prevents them from permitting consumers in one province from buying from a winery in another … something that is commonplace in the rest of the world. The federal and provincial governments have repeatedly promised to fix the problem … and repeatedly kicked the can down the road … because the provincial liquor bureaucrats tasked with fixing the problem are not able to act outside the “accountability sink” … and cannot sufficiently act “outside the box” to implement a policy that works everywhere else in the world. This happened yet again last week when the relevant Ministers “recommitted” yet again to work on the problem. Again, big promises … with no solution and little accountability.

Unfortunately, the “accountability sink” extends to many other aspects of federal and provincial liquor policy. For example, in BC, we have ludicrous historic distribution policies that require the use of a government distribution warehouse for all imported wine … even if the bottles are destined for a private store, restaurant or bar. It’s an environmentally unsound and costly requirement that makes no sense … but it is difficult to change because no one at the political level is willing to over-ride the vested interests of a tiny group of warehouse workers.

Similarly, we have outdated percentage-based liquor markup policies that create impractically high end-consumer prices both at retail and in hospitality establishments. The alternative would be to switch to a volume-based system as Alberta did back in the 1990s. Such a change would reinvigorate the entire industry … but is difficult to accomplish because no one is taking accountability for the issue.

While there has been some recent progress on reform (e.g. licensee to licensee sales), more significant change is needed to fix these issues properly. We need to jettison the old ways of thinking … and commit to major changes in order to encourage the industry and reap untold economic benefits. Perhaps if we determine to eliminate the “accountability sinks”, we can get some even more substantive change? In the interim, Happy Canada Day!