TOUGHER TO SET UP SHOP IN ONTARIO

There are many differences in the legislative landscape in B.C. and Ontario when it comes to starting a craft distillery. Here are a few questions answered regarding liquor regulations in both provinces:

Why are there more craft distilleries in B.C. than the rest of Canada combined?

In 2013, the liquor distribution branch of the B.C. government introduced a new policy that included relaxed restrictions, a graduated tax structure and other new benefits for craft distillers that used 100 per cent B.C. agricultural products.

What constitutes a craft spirits distillery?

A craft operation usually makes less than 50,000 litres of booze annually, but can make up to 100,000.

How much does the B.C. government charge the distillery per bottle of craft spirits produced (which is then tacked on to the price of the bottle for sale)?

Nothing on the first 50,000 litres. The range of price markups then goes from 27 per cent to 163 per cent on quantities up to 100,000 litres.

What’s the price markup, or tax, on craft spirits sold in Ontario?

The LCBO imposes a tax of about 45 per cent per bottle.

What other restrictions do craft distillers face in Ontario?

Current regulations prohibit them from directly selling to bars and restaurants.

So how would bars and restaurants get the craft product?

At the moment, they must purchase all spirits only from the LCBO — typically through a warehouse or depot location — but the recent provincial budget has indicated changes are coming on this front to make it easier.

Can I get a drink at a craft distillery like I can at a winery or brewery?

You can have a straight sample of craft spirit on site if offered, but not a mixed drink. And it’s not a bar so you can’t buy a shot or cocktail. Sampling is expensive for the small alcohol distilleries because not only do they have to pay a provincially imposed ‘markup’ or tax on the bottle out of pocket, they are not able to recoup the cost by charging for tasting.

What did the Ontario government promise in its spring budget?

The budget stated the province will “support Ontario’s growing craft spirits industry by allowing direct delivery to bars and restaurants, and for on-site distillery stores, reducing charges and allowing an exemption for promotional distribution.”

When are these changes coming?

A finance ministry spokesperson said they will consult with the industry and provide more updates “within the year.”