Latest news with #BrockCoutts
CBC
07-03-2025
- Business
- CBC
Manitoba distiller cautiously welcomes agreement to lift trade barriers
Brewers and distillers are cautiously optimistic as governments work to remove trade barriers that currently make it hard for alcohol produced in Manitoba to be sold elsewhere in Canada. Earlier this week, the federal government announced it's reached a major deal with most provinces to allow beer and spirits to flow more freely across the country. The governments are expected to have a framework for the deal done within weeks. The latest push to remove the administrative and regulatory burdens that hinder interprovincial trade has been spurred by the on-and-off threats of tariffs on Canadian goods exported to the U.S. Brock Coutts, co-owner of Patent 5 in Winnipeg, said he hopes this make it easy for the company to ship its product to bigger markets like Ontario, though he's wary. "Each of the provinces have a very convoluted bureaucracy with different rules," he told Information Radio. "For everyone to agree on that, I think would be a bit of a challenge." Manitoba is one of the provinces that stand to gain the most by removing the administrative and regulatory barriers that hinder trade, which, according to a 2019 International Monetary Fund report, would add $245 billion to the Canadian economy. The province is one of the most open to alcohol shipments, allowing residents to shop online for booze from other provinces without restrictions. The province is also a signatory of the New West Partnership Trade Agreement, which creates a single economic region with British Columbia, Alberta and Saskatchewan. Perry Joyal, head brewer and operations manager at Torque Brewing, said their only market outside Manitoba is Saskatchewan. The brewer had previously looked into selling its product in Ontario, but bumped against high costs, including upfront fees to get listed by that province's liquor board. "They're actually kind of prohibitive. We would have to raise our prices to the point where they wouldn't be palatable to the consumer," Joyal said. "Then when you add in the additional cost of having to transport everything a province away as opposed to selling in town here in Winnipeg … it's always been a little bit too expensive for us." The governments have directed the committee in charge of implementing the Canada Free Trade Agreement (CFTA) to developed a countrywide credential recognition plan by June 1. Tyler Dyck, president of the Canadian Craft Distillers Alliance and a vintner in B.C., said distillers and brewers essentially pay "greedy" liquor boards for shelf space. Dyck said the question is to what extent the deal will allow provinces to ship product straight to consumers in other provinces without any markup. The federal government said most first ministers committed to allowing direct-to-consumer sales. The CFTA's action plan calls for the expansion of sales channels for alcoholic beverages. Dyck said distillers in provinces that do not have incentives like agricultural rebates often can't really afford to make their own spirits, so they're forced to import. "All our government liquor stores … they're actually helping every other country's economy much more than they're helping ours, because quite frankly, they're putting them on display and allowing them to occupy 99 per cent of the shelf space," he said. Coutts said cutting the federal component of excise taxes would also help foster local growth. "I just wonder if there's a real strong desire of anyone right now in government to tackle a problem like that," he said.
CBC
28-01-2025
- Business
- CBC
Manitoba business hopes for interprovincial barrier reduction amid 'Buy Canadian' campaign
As Canada waits to see if the U.S. threat of 25 per cent tariffs on all imports comes to pass, Canadian officials encourage citizens to purchase domestic goods as a way to blunt the potential economic hit. But Brock Coutts, an owner of the artisanal distillery Patent 5 in Winnipeg, isn't expecting the 'buy local' campaign to have a significant impact on his business. "There will be some new customers that will find us," Coutts said, but the change "would be minimal." He hopes instead that the trade war might be the catalyst for change on another front — the reduction of interprovincial barriers for the sale and trade of goods, including alcohol. The idea gained steam among Canada's premiers and federal officials last week, with Internal Trade Minister Anita Anand telling CBC that the removal could inject $200 billion into the domestic economy. Coutts says a level playing field province to province could position Manitoba's distillers and brewers at the same selling opportunity as other Canadian small crafters. Small alcohol producers in other provinces like Saskatchewan, Alberta or B.C. can sell their products in Manitoba at the same markup rate as local distilleries and brewers, but that isn't reciprocal. "We're completely uncompetitive outside of Manitoba … I do not get the same reduced markup in those provinces," Coutts said. "We're treated as a essentially the same as a multinational if we go into other provinces," said Coutts. The rules on what liquor vendors can sell local craft products and commercial alcohol products vary from province to province. In Manitoba, craft products have a rate of 40 per cent mark up, whereas commercial rates mark up to 153 per cent, Coutts says. There are over 200 distilleries in west of Manitoba, but only two in the province, Coutts says, and that's because other provinces support local liquor businesses over fair interprovincial trade, making Manitoba products uncompetitive nationally. "So we really don't have an opportunity to grow beyond Manitoba.... the economics definitely would favour selling into the U.S. versus Canada." Coutts doesn't have high hopes that changes will happen anytime soon, and neither does Ryan Cardwell, professor of agribusiness and agricultural economics at the University of Manitoba. "These provincial trade barriers are kept in place by some very strong vested interests in each province," Cardwell said. Canada took steps forward on the issue in 2017 when every province, territory and the federal government signed the Canadian Free Trade Agreement (CFTA), which created a formal and binding process to cut down existing trade barriers. The deal applies to all interprovincial trade, but a detailed list of exemptions was negotiated for each province and territory — many of which still exist today. "The federal government doesn't really have control over those … so all the provinces would have to get together and agree to reduce fees. And that's almost certainly not going to happen," said Cardwell. Internal trade could drive economic growth and "partially offset" some of the damage done by trade barriers put in place by the U.S. government, Cardwell said, but interprovincial restrictions increase that province's profit on their goods. "The 'buying local' thing is really just politicians talking," he said.
