Latest Developments in the Canadian Economic Accounts
Access by Canadians to regulated liquor and cannabis retail outlets

A large share of the goods and services Canadian households purchase are acquired from private sector retail outlets that are largely unregulated. Some regulations do apply to all retail outlets such as minimum wage legislation, health and safety requirements, zoning rules and holiday shopping restrictions, but in most respects the retailers are free to sell whatever array of products they decide upon, to acquire goods from the wholesalers of their choice, to charge whatever prices they deem appropriate, to display the goods as they see fit and so on. That is the normal case in Canada’s free market economy.

An important exception to this general statement concerns retailers of restricted substances, such as alcoholic beverages and, after October 17, 2018, cannabis products. The stores selling products of this kind are more heavily regulated by provincial and territorial government authorities. In some jurisdictions, only government owned and controlled outlets are permitted to sell the products while in others, although private sector vendors are allowed to operate, their locations and activities are more tightly regulated than those of other types of retailers.

Because products such as these are highly regulated, there is a potential for corresponding illicit markets, sidestepping the regulations, to exist. Governments seek to shape the regulatory environments to minimize the size of these illicit markets and one way to do that is to make the regulated products as easily accessible as possible.

Statistics Canada has done some calculations to determine the accessibility of regulated products—liquor and cannabis—to Canadian households in bricks-and-mortar outlets. Using the agency's geographic databases, the location of each Canadian household is identified, and the distance from that location to the nearest legal retail outlet is calculated^Note . Averages of these distances are then calculated to determine how generally accessible these products are to Canadians. It must be noted this takes no account of online or illegal retailers.

Liquor stores

Table 1 and Table 2 show the results for liquor stores^Note . There are 2,895 of them in Canada and the population-weighted average distance between Canadians and the nearest liquor store is five kilometres (Table 5). As can be seen in Table 2, 90% of Canadians all across the country live within 10 kilometres or less distance from a liquor store and 82% live within five kilometres. Understandably the provinces and territories with low population densities have less easy access, with Nunavut being the most extreme case. Only 22% of Nunavut residents live within 10 kilometres of a liquor store. The provinces where liquor stores are most accessible are Ontario (95%), British Columbia (95%), Alberta (91%) and Quebec (89%). In Newfoundland and Labrador 62% have access within 10 kilometres and in Northwest Territories 70% have this degree of access. All the other provinces and territories have 70% to 80% of their populations within 10 kilometres of the nearest liquor store.

Also of interest is the fact that in Alberta, which has 874 retailers authorized to sell liquor (Table 5), 64% of the population (Table 2) lives within one kilometre of a liquor store. This is substantially higher than in any other province and partially reflects the fact that in Alberta private sector retailers can obtain permits to sell liquor. In British Columbia the percentage is 41% and in the other provinces and territories it is below 30%.

Cannabis stores

Table 3 and Table 4 show information similar to that in the first two tables, but for cannabis 'bricks-and-mortar' outlets rather than liquor stores. In this case the statistics are somewhat speculative, since no cannabis outlet can open for business legally until October 17, 2018. Each province and territory is presently implementing the rules and regulations that will apply in its own case. Some are planning to open government owned and operated retail outlets while others are allowing private retailers to apply for permits to sell cannabis products. In Ontario, there will be no legal cannabis outlets until private retailers are permitted to open for business on April 1, 2019, although online purchases will be allowed from October 17, 2018 forward. Northwest Territories and Nunavut are also expected to have no cannabis stores open in the fourth quarter. No account is taken in this analysis of legal online sales or illegal sales of cannabis products.

Overall, although it remains unclear at this time exactly how many cannabis retail locations will be open on October 17, 2018 and where they will be situated, there is nevertheless a great deal of information available. Statistics Canada has gathered whatever facts and intentions are publicly available about store locations in each province. In some jurisdictions the number and location of outlets that will be open in October is already decided. In others, less complete information is available and Statistics Canada has made its own imputations based on the available facts. It is estimated there will be 288 open cannabis retail outlets in the fourth quarter (Table 5).

On this basis, Table 3 and Table 4 show the expected accessibility of cannabis products in the fourth quarter after they become legal in Canada on October 17, 2018. For the country as a whole 35% of the population is expected to have access to cannabis outlets within 10 kilometres or less of their residence and 25% within five kilometres or less. British Columbia leads the provinces and territories with expected access at 73% of its population. The three Prairie provinces, Yukon and Newfoundland and Labrador are each expected to have 10-kilometre access for 60% to 70% of their populations. The three Maritime provinces are each expected to have access rates between 55% and 60%. In Quebec only 40% of the population is expected to have this degree of access while in Ontario, Northwest Territories and Nunavut access is expected to be 0% in the fourth quarter. All provincial and territorial cannabis access rates are expected to increase substantially in 2019 and 2020 as additional retail outlets are opened.

Conclusion

Canadians have remarkably good access to liquor stores all across the country with 90% living within 10 kilometres of a store. Not surprisingly, their access to cannabis stores immediately after legalization on October 17, 2018 is likely to be much more restricted with only 35% of the population dwelling within 10 kilometres of a store. It is emphasized this is a preliminary estimate based on less-than-full information about the number of stores expected to open and their locations. Cannabis accessibility will undoubtedly increase substantially in 2019 and 2020.