As vacationers travel around Canada this summer, here is a question to ponder for those who sip fine Canadian wine: why do so many provincial politicians oppose free trade in wine among the provinces?
Before last year, it was illegal for Canadian wineries to ship direct to consumers in another province. That was unlike say, how a Quebec dairy producer can sell cheese to a grocery store chain based anywhere in Canada.
Readers may recall that Dan Albas, a federal Member of Parliament, tried to help consumers and Canadian wineries bust through inter-provincial blockages with the introduction of his Private Member's Bill C-311. Passed last year by Parliament, the bill amended a 1928 federal law that prohibited transporting "intoxicating liquors" i.e. wine across provincial borders.
That law, the Importation of Intoxicating Liquors Act, resulted from post-Prohibition era requests from the provinces to grasp more control over alcohol sales. But because of Bill C-311, which struck down the prohibition, there is no longer any federal reason for not ordering a case of wine from a Canadian winery regardless of where you live.
Alas, some provincial politicians oppose free trade in wine. That is because they might lose some revenue from lost mark-ups and taxes if consumers buy direct from another province; and retailers might lose a few sales.
Thus, some provinces continue to try and block now federally freed-up wine shipments. They do this by retaining bans on transporting wine not bought at the government-approved stores (Quebec), or by just pretending consumers cannot import wine unless they personally drive it across a provincial border.
For example, last year, Alberta Finance Minister Doug Horner told the Alberta Liquor Industry conference his government would not allow "a separate liquor retail channel, an out-of-province one for that matter, directly selling to Albertans."
Or ponder the Liquor Control Board of Ontario's (LCBO) nanny-like "policy statement" forbidding Ontarians from importing wine except where they personally bring it back themselves.
Both Ontario and Alberta are short-sighted. Freedom to buy direct from wineries in other provinces would be helpful to domestic wineries, especially smaller ones. If they can ship directly to consumers, wineries could both keep more of the final price and yet cut prices at the same time for consumers.
They could do this by cutting out the cost of middlemen, including the cost of dealing with government wholesalers such as the LCBO or Alberta wine wholesalers.
Some provinces are more sensible. In conjunction with Albas' push for open wine markets, the New Democratic government in Manitoba has already jumped on board and passed legislation to explicitly allow consumers in that province to buy wine direct; the Nova Scotia NDP government recently introduced legislation to the same end.
As for Alberta and Ontario, despite the bluster, here's something to ponder: neither province actually legally bans consumers from having wine shipped direct from wineries in other provinces. The laws in both provinces are silent about the method of shipping wine, i.e. by loading it up in one's vehicle or by having it sent direct via some third-party service.
In Alberta, "An adult may import from another province liquor for the adult's personal use or consumption" is how section 89 of the Gaming and Liquor Regulation reads. Note the province does not specify the method of importing -- planes, trains, automobiles or Canada Post. In Ontario, the Alliance of Canadian Wine Consumers has a legal opinion that points out the LCBO policy directive that forbids Ontarians from importing wine, "probably has no legal effect as it is not supported by statute or regulation."
Ontario and Alberta cannot prevent residents from buying wine directly from wineries in other provinces, not unless they change the law to explicitly restrict shipment methods. (As for other provinces, the laws are either murky or set low limits on wine imports no matter the method, and this includes, bizarrely, British Columbia.)
Wineries and consumers might well be tempted to ignore the anti-free trade rhetoric from their protectionist-minded provincial governments, and do direct business anyway.
To make sure all Canadians have a cross-country open market though, the federal government could go one step further than the 2012 Albas bill. It could amend the 1928 legislation even further, and strip the provinces of control over imports of beer, wine and spirits from other provinces.
Ottawa could even get creative and use its constitutional power of disallowance and enforce free trade in wine, beer and spirits among the provinces. After all, striking down protectionist provincial actions is something federal governments once regularly did; it is something the federal government still possesses the constitutional power to do. Maybe Ottawa should resurrect the practice, starting with free trade in Canadian wine.