Ontario to spend hundreds of millions to boost alcohol sector

Ontario Premier Doug Ford pretends to drink from a beer can and Finance Minister Peter Bethlenfalvy holds one at an announcement saying the province is speeding up the expansion of alcohol sales, in Toronto on Friday, May 24, 2024. THE CANADIAN PRESS/Christopher Katsarov

Ontario plans to spend hundreds of millions of dollars boosting the province’s alcohol sector, including programs to support grape farmers, wineries, distilleries and craft breweries.

The province will spend $175 million over five years as part of a new program designed to boost the number of Ontario grapes in blended wine. The province said the program will eventually double the percentage of Ontario grapes, “leading to the purchase of thousands of additional tonnes of Ontario grapes from farmers.”

The government is also making changes to help support the recently liberalized alcohol marketplace, with more than $250 million over the next two years to make it more competitive – and make booze more affordable. The changes include a tax rate cut for spirits at on-site distillery retail stores and a reduction in the microbrewer basic tax.

Last year the province liberalized rules on alcohol sales, allowing booze to be sold in convenience and grocery stores.

The alcohol modernization plan has gone “amazing,” said Finance Minister Peter Bethlenfalvy.

The new supports are part of the budget tabled Thursday that will see a $14.6-billion deficit as the province spends money to counteract the trade war with U.S. President Donald Trump.

MORE: How the Ontario budget could impact your pocketbook

“This is a really big boost into world class spirits and alcohol here in Ontario and we’re just levelling the playing field and reducing taxes and fees,” Bethlenfalvy said.

More than 4,000 convenience stores were granted licences last September to sell beer, wine, cider and coolers, a figure that the province says has jumped to more than 5,000 such licences.

In late October, the province implemented the final phase of its liberalization policy when it allowed any grocer to sell booze. About 400 stores had signed up at the time and that number has since jumped to more than 1,000.

The Liquor Control Board of Ontario, the province’s main alcohol seller and wholesaler, has seen revenues drop over the past few years from $2.45 billion in 2022-23 to projected revenues of $1.85 billion in 2025-26.

Officials point to the continued downward trend in alcohol consumption across the province as the primary driver for decreased revenues.

But the province is bullish on the Crown corporation, projecting annual revenues to reach more than $2.4 billion by 2027-28, “driven by its expanded role as a wholesaler in the modern marketplace.”

“I think it’s going extremely well,” Bethlenfalvy said of the new alcohol regime. “We’re hearing from convenience stores that this has been a game changer. The revenues are up, they’re hiring more people, that’s a win for consumers who are getting more choices.”

Convenience stores are thrilled with the new alcohol regime.

“To date, convenience retailers have seen average sales increases of more than 15 per cent, with many of our members, particularly in smaller and rural communities, crediting these reforms for helping them stay competitive and keep their doors open,” said Jeff Brownlee, vice president of the Convenience Industry Council of Canada.

The province also plans to change the look of cannabis stores by allowing businesses to take down their window coverings so long as pot products are kept out of view from the outside.

The changes are being done to help the province prepare for revenue streams within Canada that will soon open up.

Ford’s government recently tabled legislation to get rid of all internal trade barriers and has signed memorandums of understanding with Nova Scotia, New Brunswick and Manitoba to allow direct-to-consumer alcohol sales. The premier wants to sign bilateral deals with every province and territory that will further expand the customer base for Ontario producers.

New Democrat Leader Marit Stiles said the province has its priorities wrong in the budget.

“There is more in here about alcohol sales and alcohol generally and there’s not one mention of child care,” she said. “There’s more in here about those issues than almost anything else.”

The alcohol industry and vintners applauded the budget measures.

“Today’s budget is a game changer for Ontario’s craft beer sector and a great day for craft beer lovers, craft beer manufacturers, and communities across Ontario,” said Scott Simmons, president of Ontario Craft Brewers.

“Whether you enjoy a $10 bottle of white wine or a premium pinot noir, this program ensures that more of what you’re drinking is grown locally in Ontario,” said Aaron Dobbin, president of Wine Growers Ontario.

This report by The Canadian Press was first published May 15, 2025.

Liam Casey, The Canadian Press