Canada Inches Toward Wine Direct Shipping

Parliament repeals national ban, giving provinces the choice to allow shipping, but few have decided so far
Jul 30, 2012

Canadians who want the right to order wine directly from wineries won a big victory this summer when their parliament voted to end a nearly century-old ban on direct shipping between provinces. But the new law has created confusion, because it puts the decision in the hands of provincial governments. While British Columbia quickly voted yes, Manitoba quietly said OK, and the rest of the provinces are still debating the issue.

Interprovincial alcohol sales have been illegal in Canada since the 1920s, when the various provinces voted to repeal their prohibition laws. While the 1928 Importation of Intoxicating Liquors Act's ban on the transportation of wine for personal consumption over province borders has long been virtually unenforceable—there are no border patrols between provinces—Canadian wine lovers bemoan the fact that they are held hostage by their local Liquor Control Boards, which decide which wines to carry and how much to charge for them. (Some provinces in western Canada have state-licensed privatized retailers as well.)

Last year, radio and TV personality Terry David Mulligan even notified authorities in British Columbia and Alberta that he would be violating the law, telling them when and where he would be transporting a case of wine over their borders; he was ignored by the government but succeeded in drawing attention to the absurdity of a law that thousands of visitors to B.C. and Ontario wine regions break every year.

An amendment to the 1928 act was introduced this past October by House of Commons member Dan Albas of B.C. and it gained grass roots support among wine lovers, who unofficially dubbed it the Free My Grapes bill (taking a page from the United States' Free the Grapes organization, which supports direct shipping legislation in the U.S.). The bill passed unanimously and was given Royal Assent by Minister of National Revenue Gail Shea on June 28.

The Free My Grapes amendment legalizes "the importation of wine from a province by an individual, if the individual brings the wine or causes it to be brought into another province, in quantities and as permitted by the laws of the latter province, for his or her personal consumption." That language puts the next move squarely on the provinces.

Opening Up Borders

British Columbia, one of Canada's most important winemaking provinces, has been the most prominent to take action so far, legalizing direct shipment of wine earlier this month. British Columbians are now permitted to have any wine shipped to their homes that is made from 100 percent Canada-grown grapes and produced at a recognized Canadian winery.

“British Columbia is prepared to take the lead on opening up the Canadian marketplace for our world-renowned B.C. wineries,” said Rich Coleman, British Columbia's minister of Energy and Mines in a statement issued July 12. “Today, we encourage other jurisdictions to take immediate steps to reciprocate by opening up their borders and allow all Canadians to order wine over the Internet.”

Manitoba has quietly opened its borders as well. While the government made no official announcement, its residents may now legally receive direct shipments of wine from outside the province thanks to laws that were already in place when the Free My Grapes amendment received Royal Assent. "We are allowing unlimited quantities for personal consumption of Canadian wine," said Karen Hiebert, strategic communications director for the agency that oversees alcohol.

But Alberta residents have received mixed messages when it comes to their shipping regulations. Both the Canadian Vintners Association, a non-profit trade group representing more than 90 percent of Canada's wine industry, and lawyer Mark Hicken, who often represents the wine industry in wine-law litigation, are reporting that Alberta residents may have wine delivered to their homes if it's ordered directly from a winery outside the province.

But Jody Korchinsky, communications director for the Alberta Gaming and Liquor Commission (AGLC), told Wine Spectator, "If somebody [in Alberta] wants to order wine from B.C. or Ontario or the Napa Valley, we have a process where you can work with your licensed retailer. It's our intent to keep that as it is." The Canadian Association of Liquor Jurisdictions (CALJ), which represents the liquor boards and associations of the 13 provinces, supported Korchinsky's statement that Alberta residents may not receive direct shipments from wineries outside the province.

The confusion seems to be based on Alberta law before the new bill was passed. "Both Alberta and Manitoba had pre-existing provincial laws that said that it was legal to import alcohol from other provinces so long as it was for personal consumption," said Hickens, who runs the website in addition to his work for the firm Vintage Law Group. "And as soon as the federal [ban] was removed, as far as I'm concerned as a lawyer, I can give legal opinions to people saying it's legal. I don't think there is any reasonably possible way to interpret their law as preventing shipment." He adds that Alberta law requires customers to partner with a retailer so provincial markup and taxes are paid only with wine imported from outside of Canada.

Cautious Optimism

Ontario, which produces more wine than any other province, has yet to open its borders to direct shipping. But vintners there are optimistic that it will happen eventually, despite hesitation from the province's liquor control board.

In the interim, Ontario wineries are already shipping wine to residents of the provinces which have opened. "As the word gets out that [residents in other provinces can order wine directly from Ontario wineries], the orders are there," said Hillary Dawson, president of the Wine Council of Ontario, a non-profit trade organization representing more than 80 Ontario wineries. "We're optimistic that the public will continue to demand that liquor boards step up and let us modernize commerce in this country. It's a very antiquated system, it's not working for the customer, and I think it's time that everyone agree that it's more important to build the industry."

But that doesn't mean Ontario's government agrees. Representatives from the LCBO declined to comment and instead deferred to Ontario's Ministry of Finance, which controls the province's liquor laws. "We're going to review the new policy of the government of British Columbia with interest," said Scott Blodgett, media relations coordinator for the Ministry, "and the Ontario government is going to continue to ensure that Ontario consumers have access to wine from across Canada."

Hickens, however, says that Ontario residents do in fact have the right to have wine shipped directly to their homes. "They have laws that are silent on the issue of importing wine from other provinces," he said. "There is a longstanding principle of law in Canada that that which is not prohibited is permitted. That's my interpretation, which is not shared by the LCBO."

The waters remain murky in many Canadian provinces as each trade and government entity attempts to interpret them in their best interests. "We're trying to get clarification from Alberta; Ontario will have to respond given what B.C. has done," said Luke Harford, vice president of economics and government relations at the Canadian Vintners Association. "The B.C. government has been very supportive of the wine industry, not just in B.C. but across the country by opening up their borders to this, so Ontario will have to respond."

Harford went on to say that Quebec and Nova Scotia won't be able to stand pat long, either. "Quebec has an emerging wine industry. They are more than likely going to have to look very seriously at how to accommodate this sales channel to benefit their consumers—they've got one of the most developed wine consumer cultures in the country," Harford said. "And then there's Nova Scotia, which is another emerging wine industry, and their government will have to consider allowing their consumers to import wines from other parts of the country as well."

Winery owners are cautiously optimistic too. "We're definitely pleased that we can ship wine [to B.C.] now," said Cave Spring Cellars vice president of marketing and sales Tom Pennachetti. "Ontario is going to have to get their regulations in place. When British Columbia did what they did to make it legal for us to send our wines there, there's no real way that Ontario cannot do it."

Direct Shipping Canada News

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