Dageraad Brewing co-founder Ben Coli says uncertainty around costs has made it difficult for small breweries to compete and B.C. has lost more than a dozen such breweries in the past year because of rising costs and diminishing cash flows.Supplied
The free flow of Canadian beer between provinces would allow craft breweries to create relationships with new customers, but larger issues such as tariffs, inflation and a potential recession pose significant threats to the industry.
Dageraad Brewing co-founder Ben Coli says British Columbia has lost more than a dozen small breweries in the past year owing to rising costs and diminishing cash flows. If industry challenges persist, he worries more will follow and more people will lose their jobs.
“I thought 2025 was going to be a year of recovery for the Canadian economy in general and my industry in particular,” he says. “I was optimistic about what was going to come, but that’s changed. Now, I’m quite worried.”
One major stress is how reciprocal tariffs have sent the cost of aluminum cans soaring. Aluminum crosses the boarder multiple times before arriving at the brewery. “We don’t know what our costs are going to be,” he says. “It makes it really difficult to run a business.”
Since the Belgian-style microbrewery opened in Burnaby, B.C., in July, 2014, Dageraad has won a loyal local following for its products that include barrel-aged ales that Coli classifies as “next-level nerdy.”
Josh Morrison, co-founder of Pile O’ Bones Brewing Company in Regina, says an expanded, well-regulated direct-to-consumer shipping channel would bring a new business model for craft producers to consider, but not everyone will benefit.Supplied
Less than 5 per cent of production currently goes to other provinces. “It’s a nice little side business. It helps,” he says.
“Costs have always been the key issue for craft breweries,” says Scott Simmons, president of the Ontario Craft Brewers Association, which represents 300 producers of varying sizes in the province.
“The biggest issue facing Ontario craft breweries has always been the provincial tax structure. Provincial taxes on craft breweries in Ontario are eight times higher than they are in Alberta.”
Craft beer is local beer, with most operations selling products out their front door. Beyond potential sales opportunities to local bars and restaurants, breweries are working to expand their sales to convenience stores. The access to new shelf space came so quickly that many operations were caught unprepared when Ontario’s alcohol rules loosened last September.
“We believe that more retail locations are an opportunity for more choice and convenience for Ontario consumers,” Simmons says.
As the business model matures, convenience stores are starting to offer more regional craft-beer selections. Craft beer represents around 2 per cent of total sales at the Beer Store, but closer to 15 per cent at grocery stores and LCBO outlets, Simmons explains.
Expanding alcohol shipping laws to allow direct-to-consumer sales presents logistical and business challenges, owing to transportation or shipping costs on heavy products such as beer. “It wouldn’t be the biggest opportunity for us,” says Simmons.
There are questions about how shipping costs and the variability of provincial tax rates would affect pricing structures. An expanded, well-regulated direct-to-consumer shipping channel would bring a new business model for craft producers to consider, but not everyone will benefit, explains Josh Morrison, co-founder of Pile O’ Bones Brewing Company in Regina.
“Some will be winners, some will be losers,” he says.
Morrison’s operation expanded production, following a merger with Nokomis Craft Ales in 2023, and is riding high after winning best in show from the 2024 Canadian Beer Cup. Its Quark, Strangeness, Charm Belgian-style wheat beer was singled out as the top-scoring brew after a blind tasting of more than 1,400 domestic beers from more than 250 producers.
“We got calls after we won, but we had to politely decline those sales due to the restrictions in place,” Morrison explains.
He’s waiting to see what market-access opportunities come if provincial governments knock down existing trade barriers. A friction-less direct-to-consumer sales channel is appealing. Increased opportunities selling to liquor stores would also be beneficial. New sales and marketing plans would need to be considered should Canada’s alcohol market finally open up.
“Beer has always been highly regulated,” he says. “Every province has had its own fiefdom. We have enjoyed insulation from breweries from outside of the market coming in.”
There will be increased competition to consider, but, at the end of the day, Morrison says, “Quality still sells.”
Canadian craft brewers produce a wide assortment of styles, from light and refreshing pale lagers to dark and creamy stouts and beyond. Here are four popular regional brands that could benefit from great market penetration should laws governing interprovincial trade change.
Bench Brewing Ball’s Falls Session IPA (Canada), $3.65, 473 ml
This light and refreshing session IPA makes the most of its appealing fruity character. The aroma and flavours suggest a mix of citrus, peach and tropical fruit notes, with some earthy, peppery and bready accents that add interest. It’s named after the historic attraction near the brewery in Beamsville, Ont. It has 4.5 per cent ABV. Available at the above price in Ontario ($3.35 until March 30), $19.38 for 6 x 473 ml cans, direct, benchbrewing.com
Dageraad Blond (Canada), $17.36, 4 x 473 ml
Dageraad Blond is the flagship label from a small-batch brewery in Burnaby, B.C. Its distinct Belgian-style character presents citrus, spice and honey flavours with herbal and earthy notes. A balanced attack sees the medium-bodied flavour countered by a thirst-quenching finish. It has 7.5 per cent ABV. Available direct, dageraadbrewing.com
Pile O’ Bones White IPA (Canada), $14.99, 4 x 473 ml
A crowd-pleasing style has made this satisfying white IPA the bestselling beer made at Regina’s Pile O’ Bones brewery. Marked by a bright, citrusy and hoppy character, this light and refreshing brew should appeal to all beer drinkers. It has 5 per cent ABV. Available direct, pileobonesbrewing.com, various prices in Saskatchewan and Alberta.
Shawn & Ed Brewing Co. LagerShed Original (Canada), $13.95, 4 x 473 ml
This crisp and enjoyable German-style pilsner is the flagship release from Shawn & Ed Brewery Co., based in Dundas, Ont. It reveals classic flavours of citrus, cracker and herbs, with a refreshing finish. It has 5.2 per cent ABV. Available in Ontario or direct, lagershed.com
