G/STR/Q1/CAN/10/Add.1  
 
5 July 2016  
(16-3598)  Page: 1/5  
Working Party on State Trading Enterprises  Original: English  
 
STATE TRADING 
REPLIES TO QUESTIONS1 POSED BY THE EUROPEAN UNION REGARDING CERTAIN PROVISIONS 
APPLICABLE TO THE PROVINCIAL AND TERRITORIAL LIQUOR CONTROL 
AUTHORITIES OF CANADA2 
Addendum 
The following communication, dated 10 June 2016, is being circulated at the request of the 
Delegation of Canada. 
 
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Question 1 (a)  
The notification contains a concise presen tation of the rules for importing liquors 
according to which the federal Importation of  Intoxicating Liquors Act (IILA) provides 
the provinces and territories, within their respective jurisd iction, with control over the 
sale of intoxicating liquor, and over the import ation, sending, taking or transportation of 
such liquor into the provinces and territo ries. The provinces and territories have 
delegated this activity to the provincial/terri torial liquor control authorities. The statute 
expressly provides that nothing in the IILA fo rbids the importation, sending, taking or 
transportation of intoxicating liquor […, or] for manufacturing or commercial purposes 
not related to the use of liquor as a beverage. However, it seems that some Canadian Provinces do not authorize this kind of business. 
 
The EU would like to receive clarifications on these provisions. Could Canada confirm 
that these provisions give the possibility to  foreign suppliers of spirits and wines to 
export directly to Canada th eir products under their own re sponsibility? Should this be 
the case, could Canada clarify how these prov isions shall apply? If not, could Canada 
clarify how these provisions comply with Art. XVII.1 of the GATT?  
Reply: 
 
All provinces and territories permit the importat ion, sending, taking or transportation of 
intoxicating liquor for manufacturing or commercial purposes not related to the use of liquor as a 
beverage. However, as intoxicati ng liquor is a controlled substance, some provinces maintain 
certain conditions or requirements for the purchase or sale of intoxicating liquor for purposes not 
related to use as a beverage. Please find a summ ary of the relevant provincial and territorial 
policies in the chart below.  
                                               
1 G/STR/Q1/CAN/9. 
2 These questions and replies relate to the notification in G/STR/N/15/CAN. G/STR/Q1/CAN/10/Add.1 
 
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Restrictions/Conditions/Requirements 
and other relevant information 
Alberta The Alberta Gaming and Li quor Commission (AGLC) does no t restrict the importation of 
liquor/alcohol for non-beverage commercial or in dustrial uses. 
 As the AGLC does not intervene in these areas, there are no related authorizing regulations. For general reference, the AGLC website can be found here: 
http://www.aglc.ca/  
British Colombia As per the Liquor Control and Licensin g Act (LCLA) and the Liquor  Distribution Act (LDA), 
British Colombia regulates "liquor", defined as beer, cider, wine or spirits, or any other 
product intended for human consumption, th at contains more than 1% alcohol by 
volume. This includes beverages as well as use for food products, but excludes alcohol 
used for manufacturing/commercial purposes.  The following additi onal requirements 
apply for cooking wine made from rice alcohol: 
 Commercial users (such as restau rant and food manufacturers) may 
buy cooking wine made from rice alcohol that contains 10% or greater alcohol directly from importers or distributors in bulk containers of 10 litres or more. Importers and distribu tors must "pre-sel l" each shipment 
and report this information to the Liquor Control and Licensing Branch 
of British Colombia (S.62 LCLA). 
 British Colombia also regulates "ethyl alcohol" – defined as a solution [that is not denatured and] contains more than 95% et hyl alcohol by volume. S.8 of the LCLA 
provides exemptions for most professional  uses (doctors, pharmacists, etc.) and 
universities for scientific purposes, and S.9 of the LCLA sets out a permitting process for other uses, including mechanical or manufacturing businesses or scientific pursuits.  References: LCLA: http://www.bclaws.ca/civix/document/id/complete/statreg/96267_01  
LDA: http://www.bclaws.ca/civix/document/id/complete/statreg/96268_01  
Manitoba Subject to the Manitoba Liquor and Gaming Control Act*, th e province of Manitoba allows 
for the importation of intoxicating liquor for non-beverage commercial or industrial uses. 
The following conditions and requirements apply with respect to sale and use:  
a) Non-potable intoxicating substances: 
a. Cannot be sold as a beverage 
b. Cannot be sold to someone who is intoxicated 
c. The sale of cooking wines/liquors is restricted based on alcohol content. 
b) Stomach bitters and rubbing alcohol**: 
a. Stomach bitters cannot be sold in  containers greater than 113.7ml 
b. May be sold to licensed pharmacists or to a person for industrial, 
manufacturing, scientific, pharmace utical or agricultural purposes. 
*https://web2.gov.mb.ca/bills/40-2/b043e.php#b75  (reference to non-potable 
intoxicating substances and defined "l iquors" can be found in Section B, 
paragraphs 72-76.)  **https://web2.gov.mb.ca/laws/regs/current/_pdf-regs.php?reg=65/2014  
New Brunswick New Brunswick allows the importation of liquor/alcohol for non-beverage commercial or 
industrial uses, subject to the following conditions: 
a) Importing manufacturers need to have an appropriate liquor licence for the 
activity. 
b) Authorization for importation is subject to the right of the New Brunswick Liquor 
Board to conduct audits.  
Reference: http://laws.gnb.ca/en/ showpdf/cs/L-10.pdf 
 
Newfoundland 
and Labrador The Newfoundland Labrador Liquor Corpor ation provides for the importation of 
liquor/alcohol for non-beverage commercial or industrial uses. The following requirements 
apply: 
a) The person/organization must submit a written request for a permit for pure 
alcohol to the NLC's Regulatory Services Department 
b) Regulatory Services' permits are valid for one year. 
c) The applicant procures the alcohol from a lo cal NLC store (which is sourced directly 
from the warehouse). G/STR/Q1/CAN/10/Add.1 
 
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Restrictions/Conditions/Requirements 
and other relevant information 
Reference: 
http://www.assembly.nl.ca/legislation/sr/statutes/l18.htm#65_  Liquor Control 
Act (S.65 – Use and Disposition of  Liquor Contained under Permit) 
Northwest 
Territories The Northwest Territories permits the import ation of liquor/alcohol for non-beverage 
commercial or industrial uses. The following conditions apply: 
a) The person/organization must obtain a pe rmit from Liquor Licensing. Permits are 
issued at no charge.  
Reference: 
http://www.fin.gov.nt.ca/services/liquor/liquor-licensing-board  
Nova Scotia As per the Liquor Control Act of Nova Scotia, the Nova Scotia Liquor Corporation allows 
the importation of liquor/alcohol for non-beve rage commercial or industrial uses. The 
following conditions apply: 
a) The person/organization must obtain a pe rmit for the end use of the product  
 References: http://www.mynslc.com/Content_CommunicationsPages/Content_Footer/Content_Service
s/Permits.aspx  
Liquor Control Act of Nova Scotia -  
http://www.mynslc.com/Content_CommunicationsPages/Content_Footer/Content_Corpor
ate/LCA.aspx  
Nunavut Nunavut does not restrict the importation of liquor/alcohol for non-beverage commercial 
or industrial uses. No restri ction or condition applies. 
Ontario Ontario does not restrict the importation of intoxicating liquor for non-beverage 
commercial or industrial uses. Section 33.1(1)(c) of Ontario's Liquor License Act  (LLA) 
makes it illegal to possess liquor that has no t been legally imported into Ontario. Where 
the product has been properly imported under the federal Importation of Intoxicating 
Liquors Act , possession would not be an issue under the LLA. The following is the link to 
the statute: https://www.ontario.ca/laws/statute/90l19#BK39 . 
Prince Edward 
Island Prince Edward Island regulates the importation of liquor for commercial purposes. The 
Liquor Control Act S.7 ( http://www.gov.pe.ca/law/statutes/pdf/l-14.pdf ) sets out the 
functions, duties and powers of the PEI Liquor Commission. 
Quebec Quebec allows for the importation of li quor/alcohol for non-beverage commercial or 
industrial uses. The following conditions apply:  
a) This alcohol must be sold through the SAQ. 
b) Manufacturers must report annually to th e Liquor Board the quantity of alcohol 
they have in their possession as well as the location of this alcohol, the quantity that was used for the manufacture of the final product, the names and addresses 
of the manufactures and the quantity of alcohol they require for the following 
year.  
 Reference: http://www2.publicationsduque bec.gouv.qc.ca/dynamicSearch /telecharge.php?type=2&fil
e=/I_8_1/I8_1.htm  
Saskatchewan Saskatchewan does not restrict the importation of liquor/alcohol for non-beverage 
commercial or industrial uses. No restrictions or controls apply. The relevant regulation is provided below:  The Alcohol and Gaming Regulation Act, 1997. (See p.59-59) http://www.qp.gov.sk.ca/documents/english/Statutes/Statutes/a18-011.pdf  
Yukon The Yukon Liquor Corporation allows fo r the importation of liquor/alcohol for non-
beverage commercial or industrial uses. A permit is required. The relevant regulation is provided below:   Yukon Liquor Act, Section 54(5) http://www.ylc.yk.ca/ pdf/liquor_act_oc.pdf  G/STR/Q1/CAN/10/Add.1 
 
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Question 1 (b)  Still according to the notification, under th e IILA, an exception exists for persons 
licensed by the Government of Canada under the Excise Act to carry on the business or 
trade of a distiller or brewer where the into xicating liquor is imported solely for the 
purpose of being used for blending with or flavouring the products of the business or 
trade of that person. 
 
The EU would like to receive clarifications on  this provision. Could Canada confirm that 
foreign suppliers of spirits and wines can be  authorized to carry out their business or 
trade under this exception? 
 Reply: 
 Under the IILA, the exception in question allows domestic licensed distillers and brewers to import bulk intoxicating liquor to blend or flavour thei r products. The exception operates in conjunction 
with the Excise Act, 2001 and the Excise Act, which define licensees' requirements and particular 
activities of licensees, including the importation of bulk spirits and manufacturing beer. The domestic licensee can take advantage of this exception when importing intoxicating liquors from any foreign supplier. A foreign supplier would not be authorized under the IILA, the Excise Act, 
2001 or the Excise Act to directly import bulk sp irits and manufacturing beer under this exception 
unless they hold a domestic license to carry on the business or trade of a distiller or brewer in Canada.  
 
Question 3  
The notification contains a concise presenta tion of the determination of the mark-ups 
for each STE and underlines, as a general charac teristic and in several points, that they 
are calculated in a uniform, non-discriminato ry manner, irrespective of the country of 
origin. 
 
Recently, it seems that some Canadian Prov inces are starting implementing variable 
mark-ups whereby the product mark-up applied may vary by product, thus contradicting 
the notion of flat-rate and/or of uniform  mark-ups mentioned in the notification. 
 In particular: i) Nova Scotia's Liquor Boar d has introduced variable mark-ups on some 
product sub-categories; ii) on 1 April 2015 Br itish Columbia's Liquor Board changed its 
mark-up structure, with a split of the liquo r board's mark-ups into wholesale mark-ups 
and retail mark-ups. While wholesale mark-up rates are published, there is no transparency on the final rate applied on the retail mark-up, which may give place to 
arbitrary and variable rates. 
 The EU would like to receive clarifications on  these measures. Could Canada confirm that 
these measures have been adopted? Should this be the case, could Canada clarify how 
these provisions comply with Art. XVII.1 of the GATT? 
 
Reply: 
 
Consistent with Art. XVII.1 of the GATT, both policies are applied equally to domestic and imported 
products and are implemented in accordance with commercial considerations. 
 B.C. introduced its new wholesale pricing model in April 2015. In B.C., alcohol may be sold in 
government operated liquor stores as well as private liquor stores. Under the wholesale pricing 
model, all liquor retailers, except duty free stor es, purchasing their product from the Liquor 
Distribution Branch pay a common wholesale price for that product, which is calculated based on a 
common wholesale mark-up. Liquor retailers are then free to determine the retail price of the 
product, subject to minimum pricing rules. The objective of this pricing model is to create a level 
playing field for all retailers, including both private retailers and B.C. Liquor Stores operated by the 
Liquor Distribution Branch. 
 G/STR/Q1/CAN/10/Add.1 
 
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  The Nova Scotia Liquor Corporation (NSLC) uses a competitive bidding process for selecting which 
types of economy beer and spirits will be sold in its retail outlets. All vendors are invited to submit bids and winning candidates are selected based on a number of criteria including quality of product, price and consistency of supply. The economy beer and spirits categories are open for 
bidding by all vendors of comparable products. The policy is an operational business practice 
applied to economy beer and spirits only. The poli cy does not differentiate vendors by country of 
origin. The approach helps ensure vendors remain competitive within this market segment and is 
part of NSLC's strategy for the ma nagement of limited shelf space. 
 
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