Liquor retailing in the territory

Nunavut’s geographic and infrastructure challenges combine with legislative realities to make liquor retailing in the territory unconventional in the Canadian context. The major challenge for liquor retailing in Nunavut is the need to service a very limited market spread out over a fifth of Canada’s land mass and connected only by air and limited seasonal sea access.

Among the many characteristics that set Nunavut’s liquor distribution system apart from other jurisdictions in Canada, is its central processing structure. The Commission operates a beer and wine store in Iqaluit and all other liquor orders are processed through the Commission’s headquarters in Rankin Inlet and distributed via air cargo from either of the Commission’s warehouses.  Licensed outlets and holders of special occasion permits are the exception, as the high volume of their purchases dictates that they be picked up at the closest Commission warehouse.

To take advantage of the Government of Nunavut’s greater purchasing power, the Commission’s entire liquor inventory is purchased on behalf of the Commission by the Department of Community and Government Services’ Procurement Division.

Nunavut’s Liquor Restriction Systems

The Liquor Act provides Nunavummiut with a ranked liquor restriction structure based on four systems, ranging from standard access to total exclusion. Communities choose their appropriate system by plebiscite. Described under section 48.2 of the Act these systems are:  

An unrestricted system in which the community is subject only to the general liquor laws of Nunavut;
A restricted quantities system in which, in addition to the general liquor laws, the quantity of liquor that a person may purchase is limited;
A committee system, in which a locally elected alcohol education committee decides:

• who may consume, possess, purchase or transport liquor in the settlement, municipality or area,
• who may import liquor into the settlement, municipality or area under this Act,
• the amount of liquor that a person may possess, purchase, transport or import in the settlement, municipality or area,
• who may apply for a wine permit in the settlement, municipality or area and the amount of wine that a person may apply to make, and
• who may brew beer for personal or family consumption in the settlement, municipality or area and the amount of beer that a person may brew.

A prohibition system, which prohibits the consumption, possession, purchase, sale or transport of liquor within the settlement, municipality or area.

As a matter of policy, the Procurement Division attempts to buy all products directly from breweries and distilleries where possible. Due to small order volumes, some products are purchased through the Société Alcoolique du Quebec (SAQ) or the Liquor Control Board of Ontario (LCBO). The Nunavut Liquor Commission uses a flat rate per litre mark-up in the pricing of liquor products. An administration fee of $0.27 per litre is also applied. Current mark-ups per litre are as follows:

• Spirits $25.84
• Wine $7.69
• Coolers $3.00
• Beer $1.91

The Commission’s necessary reliance on air cargo for the distribution of liquor orders means that liquor purchases in Nunavut are faced with logistical issues and additional freight and marshalling costs not commonly experienced across Canada.

One logistical hurdle concerns the payments of liquor orders through the Commission. At the present time certified money instruments that include Money Orders, Northern Store money transfers, certified cheque, bank draft, or direct deposit to the Commission’s bank account are all accepted as payment vehicles.

The Nunavut Liquor Commission also accepts credit cards (VISA and MASTERCARD) for product payment, and residents of Iqaluit and Rankin Inlet are able to use their debit cards. Once verified payment has been received, the Liquor Commission ensures the product order is selected, boxed, and transported to the airlines for delivery to its destination.

Over and above the product price, there is an additional charge for handling and local cartage of $10.00 (plus GST) per order, and a bottle deposit return fee.  The shipment is then sent to the customer who is responsible for the freight costs charged by the airlines and takes responsibility for its safe arrival.  Freight costs vary, depending on distance, community, and carrier used.

With Ottawa the only destination serviced daily by either of the major airlines flying in Nunavut and the other communities averaging between two or three flights a week, flight schedule structures serving Nunavut impose a de facto waiting period on all liquor purchases in the territory (Licensees and holders of Special Occasion Permits excepted).

To ensure parity amongst all communities, Iqaluit residents must purchase their alcohol from the Rankin Inlet warehouse or outside the territory, and similarly Rankin Inlet residents must purchase their alcohol from Iqaluit or outside Nunavut. All other eligible residents of Nunavut may place their order at either facility. This measure ensures there are no direct sales of liquor to the public anywhere in Nunavut, except in licensed establishments.

Nunavummiut may purchase liquor with or without an import permit, which allows them a wider range of options for both selection and price. Should they choose to import their liquor from outside the territory, individuals must purchase an import permit from one of the three permit agent offices in Cambridge Bay, Rankin Inlet, or Iqaluit. Given the added costs of cargo, this will continue to remain a viable option for most residents living in unrestricted communities and communities under committee systems.

An import permit is required to import any quantity of liquor into the territory. However, it is permitted to bring, personally, quantities no greater than three litres of spirits or nine litres of wine or 26 litres of beer.

Nunavummiut wishing to purchase liquor without an import permit can do so from either the Iqaluit Liquor Warehouse or the Rankin Inlet Liquor Warehouse. Depending on where the individual lives the procedures vary.

There can be no liquor sales to residents living in a prohibited community. Where an individual lives in a community under unrestricted status they will not have to go through the AEC process and can place their order directly with the Liquor Warehouses in Rankin Inlet or Iqaluit.

In communities governed by an Alcohol Education Committee (AEC), individuals apply to their community‘s AEC to seek approval to bring liquor into the community. The AEC may place restrictions on the purchase or even deny the application. Once an individual has obtained permission from the community AEC (Committees fax approved sheets listing individuals to the Liquor Commission), an order may be placed.

One final aspect of liquor retailing in Nunavut is the Commission’s effort at encouraging recycling in the territory through container deposits.

The Commission places a container deposit on all liquor purchases made, and is prepared to accept returned empty liquor containers at any established recycling centre. Currently container return centres only exist in Iqaluit. The Commission charges $0.15 per can and gives back $0.10 per can.

The current import permit fee structure is as follows:

• Spirits $3.75 per litre
• Wine $2.00 per litre
• Coolers/ciders $0.59 per litre
• Beer $0.56 per litre