Smaller independent Canadian alcohol producers say more needs to be done to make it easier to sell their products in other provinces and territories as the trade war stretches on.
A new report from the Canadian Federation of Independent Businesses says despite efforts by the federal government to smooth out interprovincial trade barriers, smaller producers are still having a tougher time filling shelves in other markets compared to bigger Canadian and international companies.
“The ongoing tariff dispute between Canada and the United States further underscores the need to strengthen Canada’s domestic markets,” said the CFIB in its report.
“When American liquor products were pulled from stores’ shelves across Canada as a response to U.S. tariffs, it opened shelf space that could and should have been filled by Canadian producers.”
Kevin Selch, founder and CEO of Little Brown Jug Brewing Company in Manitoba, said challenges remain for small producers trying to get that shelf space.
“Getting into other markets is more or less possible, it’s just really expensive and can be cost-prohibitive for very little reason,” Selch said.
Canadians have been embracing a new form of consumer patriotism in 2025, where the majority say they are prioritizing Canadian-made options wherever possible — even if it costs more in some cases.
The motivation for the Buy Canadian movement is mostly rooted in trade tensions with the United States, fuelled by President Donald Trump’s tariff policies and repeated suggestions that Canada should become the “51st state.”
Ontario and some other provinces have banned U.S. alcohol from store shelves as a direct result of tariffs.
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An Ipsos poll conducted exclusively for Global News found in June 2025, six in 10 Canadians believed removing interprovincial trade barriers would help offset the economic damage from the trade war and lead to further growth.
The CFIB says many of the needed changes appear to lie in provincial and territorial hands at this stage to smooth out different remaining barriers.
“Every province has a different markup structure and different ways to get the product to market, and that’s definitely the biggest challenge,” says Mark Kuspira, owner at Crush Imports.
“We do a lot of inter-provincial bonded transfers between the four western provinces that I work in, and there’s a lot of paperwork, there’s a lot of back and forth to get any product across the provincial border.”
Prime Minister Mark Carney’s One Canadian Economy bill tabled in June aimed to knock down federal barriers to interprovincial trade.
When he tabled the bill, Carney said, “That will allow more goods, more services to be transported, sold and bought across our nation without restriction, generating new opportunities for Canadian businesses and lowering costs for Canadian consumers.”
Carney also said removing these barriers could add around $200 billion to the economy every year.
“I had real hope that this was going to change and really open up the market for wine, spirits, and beer, both for small independent producers, but also for importers,” says Kuspira.
“So far, we’ve seen nothing come to fruition on this, and they do talk about the impact of interprovincial trade being at $200 billion worth of value to the Canadian economy — yet nothing has happened.”
The CFIB says an alcohol producer has to navigate regulatory hurdles from various provincial liquor boards, varying retail and wholesale systems and alcohol distributors.
Cutting red tape and complex regulations that vary from province to province is the first hurdle cited in the report.
This can include different lab testing requirements, obtaining specific permits and labelling requirements, which differ depending on the market.
Shipping products directly to consumers is also cited as a major challenge, with most liquor boards having exclusive authority over how alcohol is distributed within the given province or territory. This limits the ability of producers to ship directly to consumers.
This is on top of the cost to ship alcohol, which can be high considering the weight and fragile nature of some packages, and smaller producers are often unable to justify these costs since, typically, they are not shipping large quantities.
The CFIB also describes the challenge small producers have getting information and guidance on these regulations and requirements of each province or territory, saying that information is inconsistent and that not all government websites are easy to navigate.
Many liquor boards also add costs that can lead to markup rates, which can vary based on taxes, environmental fees and shipping charges. This means the business may find it challenging to know what consumers in other provinces may wind up paying for their products.
Some smaller producers say these hurdles can be “a little absurd.”
“Two hours east of us is cottage country in Kenora, Ontario, and even though many of our customers might take our product to the lake, they can’t purchase it when they’re there, and we can’t easily access the market to be able to sell it to them in that region,” says Selch.
“There’s a lot of different hurdles from a regulatory perspective, but to get our product to Kenora, we would need to ship it to Toronto and pay to have it shipped back to Kenora, which is just a little absurd.”
In June, nearly all of the provinces and territories signed a memorandum of understanding, pledging to work towards allowing direct-to-consumer alcohol sales by May 2026.
The CFIB says little information has been shared about concrete measures since then.
“Clarity is something that we’re looking for, and I believe consumers and producers are looking for, as well as just transparency and when exactly these things are going to be implemented,” says SeoRhin Yoo, senior policy analyst for interprovincial affairs at the CFIB.
Global News has reached out to the Internal Trade Minister Dominic LeBlanc’s office for an update on the May timeline to remove some of these barriers around alcohol sales for smaller independent businesses and has not received a response as of publication.
“If there’s time for it to happen, it’s now,” says Kuspira.
