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Robert McGarveyOf all the trivia buried in Canada’s regulatory house of horrors, the most maddening are provincial liquor laws. But it could all soon change.

Behind the tangled web of regulations, restrictions, irrational production standards, and other hidden barriers to trade is the last of the archaic puritanism and pettiness of Canada’s rampant provincialism.

Alberta’s liquor laws, for instance, are claimed to be the freest in the land. But even in free-market Alberta, those laws are mired in complexity. Behind the thin facade of commercial openness is the domineering hand of bureaucracy – palm up, naturally.

Should you decide to take part in the global craft beer phenomenon, for example, and design a novel froth, prepare to be hogtied by an agency that operates like a secretive protection racket.

In your innocence, you might imagine launching a microbrewery and opening a homey brewpub, where your patrons enjoy a pint of your ale, brewed onsite.

The first level of complexity involves endless permits to establish a brewing operation. Serve the public directly? Forget it. Presuming your beer is finally produced (to completely arbitrary minimum volumes) and even if your thirsty patron is seated five feet away, title to the beer must first be transferred to the Alberta Gaming and Liquor Commission, which will then add the government’s markup and taxes. Only then can it be sold (technically by the government) to the punters.

Wish to sell your beer to local restaurants? It’s a very long and winding road. The brewer must again involve a government agency that adds additional (and unnecessary) paperwork, taxes and administrative fees. This omnipotent bureaucracy is unyielding and it’s laughing all the way to the bank.

It gets worse. Should you wish to sell your beer to neighbouring provinces, you will encounter obstructionism, unaccountable (secret) alcohol tribunals and regulatory hurdles that make the old Soviet Union look like Disneyland.

Not only is this labyrinth inhibiting nominally ‘free’ Canadian business, our convoluted liquor laws make a mockery of Canada’s reputation as a modern liberal society.

But wait. It is entirely possible that – after a century – this regulatory monstrosity will be slain by a most unlikely development: the legalization of pot.

Surely one of the most surprising promises made during last October’s federal election was the Liberal vow to legalize pot in Canada.

The war on drugs, it seems, has been lost. After decades of marijuana prohibition, Justin Trudeau’s Liberals – flying the flag of global progressivism – promised that, once they won the election and formed a government, pot would be legalized.

So within the lifetime of this government, the federally-regulated trade in marijuana may be freer and vastly less complicated than the provincially-regulated trade in alcohol.

The irony is beginning to have an effect on public policy.

In late July, at their summer conference in Whitehorse, Canada’s premiers shockingly agreed to establish a free-trade deal. Alcohol remains a major stumbling block but the threads of this national embarrassment are beginning to unravel.

The premiers established a working group to study ways to improve the situation, with a commitment to make trade in alcohol in Canada freer and less complicated.

For a start, it will soon be possible for Canadians to order wine online directly from out-of-province vineyards. The premiers also made a commitment to harmonize regulations, taxes and reduce red tape across the board.

This could signal the death throes of antiquated alcohol-related policy.

Prohibition officially took hold in Canada a century ago, in the midst of the Great War. Although it was not as onerous as in the United States, it had the same roots: wartime necessity, an alcohol-as-sin religious zeal and largely female anxiety around early 20th century drunkenness and immorality.

It would be fitting on the 100th anniversary of Prohibition in Canada if the final vestiges of this moral crusade, and the bureaucratic monstrosity it spawned, were finally buried and alcohol trade returned to a semblance of normalcy.

All thanks to legalized pot. Who would have guessed?

Robert McGarvey is an economic historian and former managing director of Merlin Consulting, a London, U.K.-based consulting firm. Robert’s most recent book is Futuromics: A Guide to Thriving in Capitalism’s Third Wave.

Robert is a Troy Media contributor. Why aren’t you?

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