Wine and spirits tariffs: what your bar program is actually paying

US alcohol imports to Canada dropped 81% in the twelve months after March 2025. Over 3,600 American products vanished from shelves, restaurant lists, and bar menus across eight provinces. And on August 22, 2026, a new 50% US tariff on Canadian spirits, wine, and beer kicked in, with Ottawa promising to match it dollar for dollar. If your bar program still looks the same as it did eighteen months ago, you're paying more than you think.

What changed and what's still in play

The trade war between Canada and the US hit alcohol early and hard. In March 2025, Canada imposed 25% retaliatory tariffs on US wine, spirits, and beer as part of a $30-billion counter-tariff package. Within weeks, every province except Alberta and Saskatchewan pulled American alcohol from public liquor board shelves, catalogues, and restaurant ordering systems.

The tariffs on CUSMA-compliant agricultural products, including most alcohol, were lifted in September 2025. But the provincial bans mostly stayed. Ontario's LCBO is still removing all US alcohol from its shelves and ordering catalogue. Quebec's SAQ had already pulled roughly 900 American references representing $27.2 million in annual sales. BC, Manitoba, Nova Scotia, and Newfoundland maintained similar restrictions.

The numbers tell the story. US spirits exports to Canada fell from $203 million in 2024 to $60 million in 2025. That's a $143-million drop in one year.

Then August 2026 added a new layer. The US imposed a 50% tariff on Canadian whisky, wine, and beer. Canada's retaliatory package, effective September 8, applies counter-tariffs of 15%, 25%, and 50% on $27.6 billion in US imports. Restaurants Canada noted the new measures avoid many priority food products, but flagged concerns about packaging and restaurant equipment still caught in the crossfire.

The European threat hasn't gone away either. The proposed 200% US tariff on European wines, with a deadline that passed in July 2026, could still materialize. If it does, French, Italian, and Spanish wines would become luxury-priced overnight for the entire North American market.

How provincial liquor boards multiply the damage

Here's what most Canadian operators miss: a 25% tariff on an imported bottle doesn't translate into a 25% increase on your invoice. Provincial liquor boards sit between the border and your bar, and every one of them adds markup before you see the price.

The mechanics differ by province, and those differences matter.

Province	System	How it works for restaurants
Quebec (SAQ)	Monopoly, progressive markup	Markup tiers from 50% to 134.5% on import cost. Every tariff dollar gets multiplied. No private wholesale alternative.
Ontario (LCBO)	Monopoly, new cost-plus model	Switched to cost-plus pricing Jan 2026. Temporary 15% wholesale discount for restaurants ended Dec 2025. Prices rising.
BC (BCLDB)	Monopoly wholesale, private retail	89% markup on first $11.75/L of prime cost, 27% on excess. But restaurants now have permanent wholesale pricing and can buy from private retailers since May 2026.
Alberta (AGLC)	Privatized retail, government markup	Flat markup ($4.69/L for wine ≤16% ABV) plus a controversial ad valorem wine tax that adds an escalating percentage. Most flexibility for restaurants.

Quebec's system is the most punishing. The SAQ's progressive markup means the first $5.00 of import cost gets marked up 134.5%. The next $1.25 gets 91%. The band from $6.26 to $14.58 gets 50%, and everything above that gets 75%. A tariff that adds $1.25 to a bottle's import cost doesn't add $1.25 to your shelf price. It adds closer to $2.50 after the SAQ is done with it.

Ontario restaurants got temporary relief through the LCBO's 15% wholesale discount in 2025, designed to offset tariff pressure. That discount expired. The new cost-plus wholesale model is still being phased in, and operators report prices trending up, not down.

BC is the one province that's actually improved restaurant access. Permanent wholesale pricing and the new licensee-to-licensee sales rule mean a restaurant in Vancouver can now buy from a private retailer at wholesale, something that was never possible before.

On top of all this, the federal government applies excise duties of $14.117 per litre on spirits above 7% ABV. Ottawa extended the 2% cap on annual excise increases through 2028, providing about $30 million in total relief. Helpful, but modest against the backdrop of everything else.

Your bar program absorbs the shock in silence

Restaurants Canada reports that 88% of operators cite food costs as a pressure point, 89% cite labour, and 41% are operating at a loss or breaking even. But in those numbers, the bar program often gets overlooked.

A well-run bar program targets a blended pour cost between 18% and 24%. Spirits should sit at 18-22%, wine by the glass at 22-28%, beer at 20-25%. When your import costs climb 15-25% and the liquor board amplifies the increase, pour cost drifts toward 28% or 30% without you noticing.

Run the math on a bar program generating $180,000 a year. A six-point pour cost increase, from 22% to 28%, costs you $10,800 in margin. That's real money walking out the back door, and it happens gradually. Not like protein prices, which spike and force an immediate menu recalculation. Alcohol costs creep. A dollar here, two dollars there. You notice when you compare your monthly inventory to sales and the numbers don't balance anymore.

This is the cost post that most independent operators haven't touched. They recalculate food cost when beef jumps. They renegotiate with produce suppliers every season. But the bar program? It runs on the same pricing from eighteen months ago because nobody flagged it.

Canadian wine and spirits: a structural advantage, not a consolation prize

While imports get hammered from both sides of the border, Canadian products live in a fundamentally different cost structure. No import tariff. No border markup. Provincial boards still apply markup, but at reduced rates for domestic producers in most provinces.

The Canadian wine industry contributes $10.1 billion to GDP and supports nearly 100,000 jobs. And the tariff disruption is accelerating a shift that was already underway. At the end of 2025, 41% of on-premise visitors said they'd been drinking Canadian brands more often since tariffs were introduced. Another 46% planned to increase Canadian consumption in 2026.

Quebec's wine industry has seen sales at the SAQ jump 52% in 2024-2025, with over 180 vignobles now producing close to 5 million bottles annually. BC's Okanagan and Ontario's Niagara region have matured into serious wine-producing areas. And Canadian craft distilleries, from gin producers in BC to whisky makers in Alberta and Nova Scotia, are filling gaps that American products left behind.

For a restaurant operator, swapping three or four imported references for Canadian equivalents on the wine list recovers margin and gives you a story to tell. "Canadian owned, Canadian poured" resonates with the 41% of customers already leaning that way. It's not about settling for less. It's about recognizing that the cost structure has shifted, and the smart play shifted with it.

Five moves for your bar program right now

Audit your import exposure. Pull your wine list and cocktail menu. Flag every product originating from the US or Europe. Calculate what percentage of your total bar cost those products represent. If it's above 40%, you're carrying significant tariff risk, especially if the European wine tariff materializes.

Recalculate your pour costs by category. A single blended pour cost number hides the problem. Break it down: spirits, wine by the glass, wine by the bottle, beer, cocktails. The category where costs climbed the most is where your margin leaked. Track it weekly, not monthly. (If you're not sure where to start, our beverage profitability breakdown walks through the full framework.)

Swap strategically, not wholesale. You don't need to overhaul your entire list. Start with low-margin imported references that take up space without performing. Replace them with Canadian wines or spirits. Keep your best-selling imports and adjust their pricing. An increase of $0.75 to $1.50 per glass goes unnoticed by most guests but makes a real difference across 400 glasses a month.

Build relationships with Canadian producers. Most provinces have programs connecting licensees with local producers. BC's new licensee-to-licensee sales rule opens options that didn't exist before. Alberta's AGLC offers reduced markups for small manufacturers. Ask your provincial liquor board rep what's available for restaurant buyers, because the information doesn't come to you on its own.

Watch the European tariff threat. If 200% tariffs on European wines take effect, your French, Italian, and Spanish references will double or triple in cost. Identify backup options from South America, Australia, New Zealand, or Canadian regions for your key European wines. Prepare the plan now so you're not scrambling later.

The real issue is structural

Tariffs come and go. Governments negotiate, products return, prices stabilize eventually. But the structure of alcohol distribution in Canada, provincial monopolies and semi-monopolies with layered markup systems, doesn't change. Every cost increase at the border gets multiplied before it reaches your invoice. That's the permanent reality of running a bar program in this country.

The operators who come out ahead are the ones who treat their bar program with the same attention they give food cost. That means tracking pour costs weekly, diversifying suppliers when the pricing structure penalizes you, and adjusting menu prices before the margin disappears entirely.

US alcohol exports to Canada have collapsed. The market is reorganizing. The question is whether you're reorganizing with it.

Sources: Restaurants Canada tariffs FAQ, The Spirits Business, Yahoo Finance/AP, CBC News, Canada.ca excise relief, Wine Growers Canada / Deloitte, AGLC, Shanken News Daily.

When you're ready to take reservations, Trudy's Table is built for Canadian independents.

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