Through all the talk of Trump, tariffs and interprovincial trade, direct-to-consumer (DTC) alcohol sales have emerged as a somewhat unexpected cause célèbre among policymakers. During a first ministers’ meeting in March, the majority of premiers committed to launching a pan-Canadian plan to expand the sale of alcoholic beverages throughout the country. Provincial governments have signed several Memoranda of Understanding (MOUs) in the months since which named DTC alongside commitments to labour mobility and economic investment.
In theory, a system of direct to consumer alcohol sales would allow consumers to order directly from producers outside of their home province, circumventing government-regulated distributors and retailers.
The federal government has also highlighted this focus. At a July 8 Committee of Internal Trade meeting in Quebec City, Transport and Internal Trade Minister Chrystia Freeland outlined the government’s commitment to a DTC alcohol policy, setting a deadline of May 2026. One territory, and all provinces except Newfoundland and Labrador are on board.
If the sudden focus on alcohol accessibility during a trade war seems odd, that’s because it is. Unless you’re in Ontario—where the provincial government seems to have no more important priority than extending hundreds of millions of dollars in subsidies to the sector. Now, politicians across the country are listing DTC sales alongside other reforms they deem necessary to promote interprovincial trade.
The much-publicized story goes that as much as $200 billion in GDP growth is at stake if policymakers don’t embrace these policies. Yet, as the CCPA’s Marc Lee has argued, this number hinges on several assumptions—and it remains unclear how or why alcohol is deemed so integral to this equation.
From April 2023 to March 2024, federal and provincial governments earned $13.5 billion off the sale of $26.2 billion in alcoholic beverages at Crown liquor authorities and private retail outlets. According to Statistics Canada, domestic products represented 59 per cent of alcohol sales over this same period.
This figure will likely be higher in 2025, as Canadians have shunned U.S. beer, wine and spirits—where provincial governments have not removed them altogether from liquor store shelves in retaliation for Trump’s tariffs. On aggregate, however, alcohol sales by volume have been in decline.
These latter two figures are important—it doesn’t seem like there is that much room for consumption growth in the sector. Canadians are already buying domestically produced beverages, and DTC is unlikely to change that, logistical challenges and costs of shipping notwithstanding. From a policy standpoint, the economic rationale is questionable, raising the question of who exactly is all of this for.
DTC sales are a corporate project
Like most other aspects of the interprovincial trade discourse, the push for DTC is guided by an underlying corporate deregulatory push. The sudden emphasis on DTC alcohol sales is no exception to this trend.
Over the last few years, almost every province has experienced some level of lobbying from the liquor industry. Groups like the Canadian Federation of Independent Business (CFIB) regularly releases reports grading provinces’ “barriers to trade in alcoholic beverages.” Other industry insiders have found influential roles in Crown corporations, like the President of the LCBO, who also has a seat on the Retail Council of Canada’s board of directors.
Wine Growers Canada, an industry group dominated by B.C. and Ontario wineries, also described the recent wave of provincial Memoranda of Understanding (MOUs) as a successful “advocacy effort.”
Much of its supporters’ rhetoric frames DTC alcohol sales as a means of promoting choice and competition–a boon to consumers who will now have more access to alcoholic beverages. Much of this hinges on cutting out publicly owned distributors, as is occurring in Ontario with the planned expansion of sales to convenience, grocery, and big box stores. In 2023, the LCBO’s gross revenues were just over $7 billion, and companies like Wal-Mart and Loblaws are eyeing these numbers.
What lobbyists don’t mention, however, is the potential economic challenges that could come with a fully liberalized model. Newfoundland and Labrador, for instance, hasn’t made any commitment on DTC alcohol sales citing the potential threat to those employed in the province’s two major breweries.
Moreover, if Alberta’s move to private alcohol distribution is any indicator, promises of choice and stable prices are far from certain. In some instances, Albertans are paying more for alcohol than Ontarians, where the LCBO still maintains strict control over distribution and pricing.
The prospect of greater competition is also doubtful. The Ontario government, which has led the way in alcohol liberalization, is currently being lobbied by large grocery chains to end its “private label” ban on supermarkets selling their own-brand alcohol products. If successful, this would likely lead to reduced shelf-space for local producers—of whom DTC is apparently supposed to help—under pressure from Costco, Wal-Mart or No Name brand wines and beers.
There isn’t any polling on public opinion on DTC alcohol sales. The majority of advocacy is coming from the private sector, which has been using the interprovincial trade discourse to pursue further liberalization. Given the existential threat Trump’s tariffs pose to the Canadian economy, should deregulating the alcohol market be a priority? Probably not, yet liquor sales have long been subject to public ownership, distribution, and regulation. For retailers, this boils down to a question of increased profitability and market access.
Beware the “alcohol deficit”
Cheaper and more readily available alcohol comes with costs as well as novelty benefits. These costs come in the form of public health risks from increased consumption.
According to the Centre for Addiction and Mental Health (CAMH), the main driver of alcohol-related harm is convenience. While alcohol sales may be down in volume, the objective of leaders seems oriented around reversing this trend. Direct-to-consumer sales have been highlighted in most MOUs between the provinces, and governments like Ontario are subsidizing the industry to boost production and make alcohol more affordable.
Proponents may frame DTC as a net economic benefit under the notion that increased sales will trickle back to provinces through tax revenue. While this may be the case in some instances, what it doesn’t consider is the so-called “alcohol deficit” or the amount of money that must be spent to offset the costs of greater consumption.
According to a report by the Canadian Institute for Substance Use Research, every province operates at a loss when taking into account the deaths and hospital visits related to alcohol use. This implies that even if consumption and tax revenues were to increase as a result of DTC sales, it wouldn’t be enough to offset the additional strains on the public health care system.
While unions and medical associations have raised concerns over the social cost of liberalization, the discourse remains dominated by politicians swept up by the interprovincial push to deregulate.
In the plainest terms, the sudden drive to boost alcohol accessibility during a trade war is problematic and shortsighted. Given the existential crisis facing Canada, one would have hoped that our leaders would have more meaningful ways to spend their time and our money than making booze cheaper and retail profit margins fatter. We cannot drink our way out of the economic crisis caused by Trump’s trade warfare.
