Posthaste: As Canada pushes back on U.S. tariffs, brewers run into expansion roadblocks

Canada is trying to open up

interprovincial trade

to reduce its reliance on the United States, but many Canadian breweries, wineries and distillers are still running into roadblocks that keep their products off store shelves.

Despite some policy changes designed to ease the process, those companies wishing to ship their product to another province are often left with a “patchwork of policies (that) creates costly delays, inconsistent rules, and lost opportunities,” according to a recent Canadian Federation of Independent Business (CFIB) 

report

.

Interprovincial trade barriers have entered the public limelight since Canada has identified them as a way to push back on tariffs on exports to the U.S.

Several provinces — including Ontario and British Columbia — have also pulled American alcohol from stores in response to the tariffs, but Keyli Loeppky, CFIB’s director of interprovincial affairs, said trade barriers represent a missed opportunity.

“When American liquor products were pulled from store shelves across Canada in response to U.S. tariffs, it opened space that could, and should, have been filled by Canadian producers,” she said in a release. “Instead, rigid interprovincial rules and excessive red tape continue to hinder small alcohol producers from expanding beyond their home provinces, leaving significant growth potential untapped.”

Canada’s provinces, however, have taken some steps to reduce the barriers. In March, every province except Prince Edward Island and Newfoundland and Labrador agreed to amend the Canada Free Trade Agreement to increase interprovincial alcohol trade, which eventually included provisions for an e-commerce platform, a digital hub for manufacturers and increasing or removing personal use exemption limits.

Despite the improvements, the CFIB said small alcohol producers still face hurdles since each province has different regulations around labelling standards, laboratory testing and registration, all of which can be time-consuming and costly.

“Duplicative lab testing requirements, inconsistent mark-up rates, and confusing rules all add to higher costs and fewer opportunities for Canadian entrepreneurs,” SeoRhin Yoo, CFIB senior policy analyst for interprovincial affairs, said.

To help facilitate better trade options, the CFIB said the federal and provincial governments should accept alcohol regulations from other jurisdictions, establish a multi-province working group to reform alcohol trade regulations and provide clear requirements to small businesses looking to expand.

“Allowing direct-to-consumer shipment of alcohol would be a significant step forward, but it’s only one part of the solution small brewers, distillers and vintners want to see,” Yoo said. “Businesses that want to move pallets of their products, not just bottles, still face myriad barriers that make it not worth the hassle.”

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Growing talk to separation in Quebec is making Canadian bond investors nervous.

Thirty-year Quebec bonds are now trading at six basis points wider than similar ones in Ontario, the biggest spread in at least a decade.

With less than a year to go before a provincial election, polls in Quebec show the separatist Parti Québécois with a healthy lead. The party has promised to hold a referendum on separation if it wins.

It has been 30 years since the last referendum, when residents voted to stay with Canada on a slim majority.

“With the overhang of a referendum, it’s a province I just can’t bring myself to buy,” said Ryan Goulding, portfolio manager and head of interest rates at Leith Wheeler Investment Counsel Ltd., told Bloomberg News.

Read more here.

• 1:30 p.m.: Bank of Canada releases a summary of its deliberations from its Oct. 29 rate cut
• Today’s Data: Building permits for September
• Earnings: Cisco Systems Inc., Manulife Financial Corp.

• Financial market survey says Bank of Canada’s next interest rate move will be a hike
• Garry Marr: Americans may soon get the option of 50-year mortgages. Here’s why Canadians shouldn’t be envious
• Howard Levitt: Why employers should pull the plug on virtual interviews
• Barrick’s new leadership sees its future in North American gold

South of the border Americans may soon get the privilege of 50-year mortgages now that U.S. President Donald Trump is pitching the idea on social media. Should Canadians be envious?

Locking in your interest rate for decades may sound enticing, but Garry Marr explains how those long-term benefits come at a price.

Read on

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Today’s Posthaste was written by Ben Cousins with additional reporting from Financial Post staff, Canadian Press and Bloomberg.

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