In 2024, Paradigm Spirits won the top prize at the Canadian Whisky Awards. Their whisky, made from Canadian corn, aged 19 years in American oak barrels, and mixed with a bit of Spanish sherry, beat nearly 200 competitors to be named Whisky of the Year. One judge called it “remarkable.”
This was a big moment for Paradigm, a women-owned distillery based in a former Kellogg’s factory in London, Ontario. After winning, Canadians across the country wanted to buy the whisky, said co-founder Irma Joeveer.
But there was a problem — Canada’s internal trade rules. In most cases, alcohol makers in one province can’t sell directly to customers in another. For example, it’s often easier for a B.C. winery to sell wine to another country than to someone in another Canadian province.
For years, politicians and business leaders have tried to remove these trade barriers, which are a mix of different federal and provincial rules, regulations, and licensing standards. These rules make it more expensive and harder to do business across the country.
Until recently, progress was very slow. But that’s changing, partly because of U.S. tariffs. When former President Donald Trump put tariffs on Canadian products like steel and cars, Canadian leaders decided they needed to rely less on the U.S. and trade more within Canada.
“We can give ourselves far more than the Americans can ever take away,” said Prime Minister Mark Carney after his April election win.
Some rules have already been removed by the federal government, and most provinces and territories signed a deal to allow direct-to-consumer alcohol sales by May 2026. Joeveer, who has sold whisky to Singapore but not to other Canadian provinces, said the change is “very encouraging.”
Economist Trevor Tombe from the University of Calgary said the difference now is that governments are acting quickly instead of taking small steps. He said while this won’t fully protect Canada from the impact of U.S. tariffs, it’s still a smart move.
The International Monetary Fund once estimated that removing internal trade barriers could raise Canada’s GDP per person by nearly 4%. But Tombe said the full economic impact might take years to see.
Internal trade makes up about 18% of Canada’s GDP — a number that hasn’t changed much in decades. Meanwhile, international trade has grown and now makes up nearly two-thirds of GDP.
Trade barriers affect more than just alcohol. Food safety rules, container sizes, even toilet seat standards for construction sites vary between provinces. Businesses often have to make different versions of the same product for different provinces.
Agricultural goods are inspected multiple times as they cross provincial borders. In Quebec, all labels must follow French-language laws.
These barriers exist partly because provinces have a lot of power in Canada’s political system and don’t like giving it up. Older trade deals were full of exceptions.
Alcohol is a common example. Some provinces tax alcohol from other provinces or limit how much people can bring across borders for personal use.
One famous case involved Gérard Comeau from New Brunswick. In 2012, he bought alcohol in Quebec, where it was cheaper, and brought it home. Police stopped him and gave him a $210 fine. He took the case to the Supreme Court, arguing it was against Section 121 of the Constitution, which says goods should move freely between provinces.
The court disagreed. It said full economic integration would go against Canada’s federal system, which gives provinces power to make their own laws — even if those laws affect trade.
Even now, it’s not easy to change. Some critics say removing trade rules could lower safety and health standards. A think tank called it “political theater.”
In Nova Scotia, a bill to accept professional licenses from other provinces faced strong opposition. Interior designers, vets, and architects said it could put people and animals at risk. The bill was later changed.
On Prince Edward Island, critics said a similar bill wasn’t needed because current labor rules already worked. In Newfoundland, beer industry unions said direct-to-consumer alcohol sales could hurt local jobs. The province didn’t sign the agreement.
Still, many industry leaders are hopeful. Jeff Guignard of Wine Growers British Columbia said the changes are welcome, even if slow.
“It’s easier and cheaper to ship wine from B.C. to Texas than to Alberta,” he said. “It’s obvious we need to fix that.”
