Free Ontario’s beer market from the grip of monopolies
Have you ever thought about who decides what beers you’re able to buy and why? Probably not. But if you live in Ontario, the reality is that anytime you enter an LCBO (Liquor Control Board of Ontario) outlet, a beer store or (more recently) a grocery or corner store and peruse their selection of beers, your choice is being constrained by a slew of regulatory and political decisions.
The LCBO stocks plenty of Ontario-produced options, like Mill Street. But if Ontarians want award-winning B.C. wines, Quebec craft beers or Saskatchewan small-batch spirits, they’ll likely be disappointed. This is because of a uniquely Canadian problem that has resulted in calls for provincial governments to “free the beer” and allow suds and other alcohol to travel freely across provincial borders.
This issue came to prominence a few years ago when, instead of paying a fine of almost $300 for having committed the heinous crime of going for a beer run in neighbouring Quebec, New Brunswicker Gérard Comeau stood up and fought. Indeed, he fought all the way to the Supreme Court of Canada.
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Unfortunately, he lost. The court ruled there was no absolute right to free trade in Canada. Yet although Comeau lost that battle, the tide of the war now seems to be turning in his favour. Since the court’s ruling, some progress has been made. For one thing, the federal government announced earlier this year that it would push for the liberalization of the domestic alcohol market. Only one problem: its power to liberalize is limited. Canada’s Constitution makes the sale of goods a provincial responsibility so there’s only so much Ottawa can do.
Manitoba already allows the shipping of alcohol directly to consumers from businesses in other provinces. British Columbia, Alberta, Saskatchewan and Nova Scotia also all have partially open markets. But the remaining provinces, Ontario included, completely restrict the interprovincial alcohol trade.
The fight to free Canadian booze from the grip of government monopolies and protectionism has been long, but the end may now finally be in sight.
If you want to understand just how much the LCBO’s monopoly costs you, look at your next bill and subtract a little over one-third of the pre-tax price. That’s how much profit the LCBO takes on average. Given the low-single-digit margins most grocery stores typically operate on, there is little doubt the cost of alcohol would fall significantly if not for the government monopoly.
Higher prices aren’t the monopoly’s only cost, however. It also restricts choice, making some prices effectively infinite. Ontarians often find it easier to buy European products than those from neighbouring provinces.
Although there has been some liberalization in Ontario there is still lots of room to grow, both in standard retail and in direct-to-consumer sales. So it is welcome news that Ontario has decided to lead the charge for a pan-Canadian framework for direct-to-consumer access to alcoholic beverages. This starts by developing bilateral trade relationships with other provinces, as the province stresses in its recent memoranda of understanding with British Columbia, Prince Edward Island, Alberta, Saskatchewan, Manitoba, New Brunswick and Nova Scotia. Other provinces have signed similar MOUs — all aimed at reducing trade barriers.
A direct-to-consumer framework approved for all Canadian provinces would help grow the domestic market, which was valued at $15.5 billion for Canadian products (or $26.2 billion for all products, including imports) as of 2024. This would be especially good for smaller breweries, wineries and distilleries. Fully 76 per cent of Canadian wineries say direct-to-consumer sales would help increase their revenues.
Such a framework would also help consumers by making alcohol purchases more convenient, providing greater variety and maybe even lower prices. Although the first direct-to-consumer framework was promised for the end of June 2025 with Manitoba, June has now come and gone.
The fight to free Canadian booze from the grip of government monopolies and protectionism has been long, but the end may now finally be in sight. Premier Doug Ford needs to put his policies where his populism is, however, and fulfill all his commitments to reduce trade barriers. Only then may Canadians finally can enjoy the benefits of a truly liberalized alcohol market.
Samantha Dagres is Communications Manager at the MEI and Alessia Iafano a Research Intern at the MEI. The views reflected in this opinion piece are their own.