Canada’s small and craft alcohol producers still face major roadblocks when trying to sell alcohol across provincial borders despite recent agreements meant to ease trade restrictions, finds a new report from the Canadian Federation of Independent Business (CFIB).
The report, Bottled Up: Barriers facing small business in interprovincial alcohol trade, reveals that outdated rules and complicated processes continue to block Canadian producers from reaching new markets, even if that market is their neighboring province. Despite public support for reform and recent internal trade commitments, lack of energy for change has resulted in a fragmented system that drives up costs, limits consumer choice, and stifles the growth of small producers, added the national organization.
“When American liquor products were pulled from store shelves across Canada in response to U.S. tariffs, it opened space that could, and should, have been filled by Canadian producers,” said Keyli Loeppky, CFIB’s director of interprovincial affairs. “Instead, rigid interprovincial rules and excessive red tape continue to hinder small alcohol producers from expanding beyond their home provinces, leaving significant growth potential untapped.
“It’s absurd that Canadians can’t easily purchase alcohol products made in their own country. If we can’t fix barriers at home, how can we expect our businesses to meet goals to expand international trade? Provincial politicians need to put protectionism aside and work towards true free internal trade in Canada.”
The CFIB is Canada’s largest association of small and medium-sized businesses with 100,000 members across every industry and region.
The CFIB said Canada’s alcohol industry is built on small businesses, with over 1,500 breweries, wineries, and distilleries nationwide. Yet entrepreneurs face a confusing patchwork of regulatory, logistical, and pricing barriers when selling outside their home province, including:
- Excessive red tape and complex regulations
- Poor transparency and communication from regulators
- Wide variability in markup rates
- High shipping costs
“Duplicative lab testing requirements, inconsistent mark-up rates, and confusing rules all add to higher costs and fewer opportunities for Canadian entrepreneurs,” said SeoRhin Yoo, CFIB senior policy analyst for interprovincial affairs. “Allowing direct-to-consumer shipment of alcohol would be a significant step forward, but it’s only one part of the solution small brewers, distillers and vintners want to see. Businesses that want to move pallets of their products, not just bottles, still face myriad barriers that make it not worth the hassle.”
CFIB said it is urging provinces to work together to fully implement the alcohol-related commitments already made under the Canadian Free Trade Agreement (CFTA) and recent Memoranda of Understanding (MOUs) on direct-to-consumer alcohol sales, including a strategic rollout plan for May 2026.
To create a fairer, more competitive marketplace, CFIB is calling on governments to:
- Expand government commitments on mutual recognition agreements to include provincial rules, regulations and requirements on alcohol.
- Increase transparency on listing processes and mark-up structures.
- Establish a cross-provincial working group dedicated to alcohol trade reform.
- Provide clear, accessible guidance to small businesses on interprovincial requirements.
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