![\"Canada\"](\"https:\/\/www.europesays.com\/canada\/wp-content\/uploads\/2026\/04\/Canada.jpg\")
Canada\u2019s spirits market operates through government-controlled monopoly systems<\/p>\nAs two Canadian provinces ink a landmark deal to allow reciprocal DTC alcohol sales, could this be the start of an open market?<\/p>\n
Canada\u2019s spirits market operates through government-controlled monopoly systems<\/p>\n
As a trade war rages on with its neighbour south of the border, Canada is putting on a united front with its provinces working together to strengthen the country. The nation is seeking to dismantle trade barriers between provinces by forging ahead with new deals, including ones that could open up the alcohol market. The Canadian spirits market is highly fragmented, with each province setting its own distribution and retail regulations. Alberta and Saskatchewan have fully privatised retail systems, while other provinces rely on government\u2010run liquor boards.<\/p>\n
In a major development last month, Ontario premier Doug Ford and his Nova Scotia counterpart Tim Houston signed a deal to allow direct\u2010to\u2010consumer (DTC) alcohol sales<\/a> between the two Canadian provinces. The move will enable consumers in Ontario and Nova Scotia to purchase products directly from distilleries, breweries and wineries in both provinces.<\/p>\n The deal is said to be part of Ontario\u2019s plan to \u201ctear down barriers to interprovincial trade\u201d, providing consumers with more choice and convenience, while \u201ccreating more opportunities for producers\u201d.<\/p>\n Since July 2025, Ontario and 10 other jurisdictions have signed a memorandum of understanding (MOU) committing them to advance nationwide DTC alcohol sales by May 2026.<\/p>\n This move comes amid tensions between the US and Canada. Last year, US president Donald Trump placed a tariff on many Canadian goods including a 50% tariff on steel and aluminium. In response, all but two Canadian provinces have banned all kinds of American alcohol from their retail shelves since March 2025. This has caused exports of American spirits to the market to plunge by as high as 70%, hitting the sales of well\u2010 known brands such as Tito\u2019s and Jack Daniel\u2019s as provinces encourage Canadians to drink local products.<\/p>\n \u201cAs a result of the trade pressures from the US, there\u2019s been a call in this country to try and find ways to get the provinces to work more closely and to trade more vigorously,\u201d explains Cal Bricker, president and CEO of trade body Spirits Canada.<\/p>\n He believes this deal \u201csends a signal\u201d and is more than just alcohol sales. \u201cIt\u2019s really more of a signal to everybody about a commitment between the provinces to try and grow the economy by dismantling some of these barriers that exist.\u201d<\/p>\n At the top of Bricker\u2019s priority list is a resolution of the US dispute, which is hurting his members: \u201cWe\u2019d like to get back to zero tariffs between Canada, the US and Mexico.\u201d<\/p>\n The DTC deal could also provide a big boost to Nova Scotian producers, as they will have access to Ontario, a major alcohol market with more than 14 million people, compared to Nova Scotia\u2019s population of roughly one million. The Liquor Control Board of Ontario (LCBO) is one of the largest alcohol monopolies in the world.<\/p>\n The CEO of Ontario\u2019s Top Shelf Distillers, John Criswick, described the deal as a \u201cgood first step\u201d, despite it being a smaller market for his business. \u201cIn the long term, Canada needs to do that. It\u2019s silly to have those blockages to being able to just do business within Canada.\u201d<\/p>\n He also believes that the deal can showcase what Canada has to offer when it comes to whisky. \u201cIt\u2019s a really good opportunity for Canada to finally lock down on what types of whisky we have because we\u2019re seen as just Canadian rye, right? Crown Royal and that sort of stuff when there\u2019s a massive craft whisky scene in the country, from British Columbia to Nova Scotia. It\u2019s when those barriers come down, it becomes an opportunity for all of us to better define our whisky flavour, terroirs, and then it\u2019s out into a global scene eventually.\u201d<\/p>\n Criswick also called the deal the \u201cfirst step to the bigger opportunity, which is all across Canada\u201d.<\/p>\n A new market<\/p>\n While the deal brings access to a new market for products, there are still some complications when it comes to label regulations within different provinces. As an example, Criswick notes that for its bottle to be sold in Manitoba, the phrase \u2018Bottoms up\u2019 had to be removed from the bottle because the province believed it encouraged drinking.<\/p>\n But the deal also has its limitations. Some brands are unable to take advantage of the access to another market because they use a partner distillery to produce their spirits. This is the case for Foxglove Spirits, which uses a third\u2010party producer in London, Ontario, to make its Valley of Mother of God gin brand. \u201cLike everything else involving liquor in Canada, it\u2019s complicated,\u201d says Malcolm Roberts, co\u2010founder of Foxglove Spirits. \u201cWe can only sell DTC under the new agreement if we hold a licence as a producer\/manufacturer.\u201d<\/p>\n Nova Scotia\u2019s DTC regulations specifically state that alcohol must be produced by a licensed manufacturer in the other jurisdiction and purchased directly from that manufacturer by the consumer.<\/p>\n \u201cSo contract\u2010distilled brands may ultimately participate if they meet licensing requirements or structure sales through the distillery partner. For us, the distillery would likely have to be the DTC seller, not the brand owner,\u201d Roberts says. To start selling directly to customers in either province, producers must apply for authorisation via the Nova Scotia Liquor Corporation (NSLC) or the LCBO.<\/p>\n Another, perhaps unsurprising, element of the deal is that alcohol sold between the two provinces will be subject to a mark\u2010up pricing structure to \u201censure fairness and competitiveness for domestic producers\u201d while aligning with existing local tax rates. The provinces already impose a mark\u2010up on products sold in their stores, which support revenue for the provincial governments.<\/p>\n \u201cThis is a great opportunity for any producer that\u2019s currently not in their market, and for those consumers to be able to purchase those products,\u201d says Shawn Hiscott, who co\u2010founded Nova Scotian brand Red Bank Whisky with actor Kiefer Sutherland.<\/p>\n As Red Bank is already on the shelves in both its home market of Nova Scotia and in Ontario through the LCBO, there is \u201cless of an opportunity\u201d for the brand, but he believes it could increase the presence of other brands. He adds: \u201cIt may fast\u2010track a product\u2019s ability to get into a marketplace,\u201d adding that both the LCBO and NSLC \u201conly have so much shelf space\u201d.<\/p>\n Hiscott also notes the \u201cbig increase\u201d in the last year of the \u2018staycation\u2019 in Canada, where locals are travelling across the country instead of going to the US, providing a boost to local distilleries. Does the alliance between Nova Scotia and Ontario signal broader change for Canada\u2019s spirits market, paving the way for similar deals to be struck?<\/p>\n Hiscott believes so. \u201cMy understanding is that there are conversations happening across the country and they\u2019re trying to see where it makes sense to eliminate or limit bureaucracy and barriers within the country.\u201d<\/p>\n Bricker adds: \u201cCanada [is] trying to modernise its system, given the challenges that we\u2019re currently facing from the US. And so, a number of things that have existed that have created these artificial barriers between provinces, people are looking at them and saying, you know, the time is now to get rid of that stuff because it\u2019s preventing us from growing our economy.\u201d<\/p>\n Whether these early agreements evolve into an open market remains to be seen but momentum is clearly building for a more unified Canadian spirits industry.<\/p>\n Related news<\/p>\n \n \n ![\"Red](\"https:\/\/www.europesays.com\/canada\/wp-content\/uploads\/2026\/04\/Red-Bank-whisky-barrels.jpg\")
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