Montreal Gazette: While C2MTL innovates, government holds back business


Montreal’s annual C2MTL conference is quickly becoming a magnet for global innovators, bringing the hope and optimism of Silicon Valley to a city that has struggled to keep pace with the rest of the world.

That struggle brings out a certain irony. The success of C2MTL is due in part to massive government funding, yet the conference unintentionally exposes how government red tape is holding back Montreal and, indeed, Quebec as a whole.

Last year, for example, a marketing rep from the Absolut introduced Montrealers to its new effort to make vodka more personal. Absolut thought people should discover their local flavours, so they hired locals to set up small distilleries in four cities around the world. Branded as Our/Vodka, they use local water supplies and locally farmed grain to produce a vodka that is wholly “ours.” The concept is so popular that they plan on expanding rapidly into seven other cities. Sadly, Montreal is not one of them.

As it stands, Quebec distilleries can’t sell their own products to anyone but the SAQ. The success of Our/Vodka rests on the fact that people can tour the facilities, sit at a bar, taste the spirits, and then leave with a few bottles if they so choose. The distillers can also form partnerships with local businesses and sell to bars and restaurants. But Quebec’s archaic laws forbid this innocent and profitable idea.

The solution to this problem isn’t new, and it’s one the governing party is familiar with.

In 2013, Liberal MNA Stéphane Billette introduced Bill 395 while in opposition. After unanimous approval from the legislature to study the bill, it never moved further.

If brought back to life, Bill 395 would solve all the above problems. It would create a new class of permits for small-scale distilleries in Quebec. Distillers using raw materials grown in the province could sell directly to the public from their distillery. They could also sell their booze at farmer’s markets, to restaurants and even to grocery stores. They would also, of course, be able to sell their products at the SAQ.

Bringing back this piece of legislation would not only give more freedom to struggling entrepreneurs, but it would be a boon for local economies.

Case in point: C2MTL’s official alcohol sponsor this year is Pur Vodka. Having won countless worldwide medals for best vodka, this company proves that Quebec can produce world-class hooch, made with local Quebec corn and locally sourced water. The company’s CEO, Nicolas Duvernois, wants to open up a new distillery in Mile End to expand his production, yet he finds the cost hard to justify. In conversation, he told me that if the law changed tomorrow and he could sell directly from his distillery, he would secure a $3 million loan for the new location. But until the province acts, he feels the costs outweigh the benefits. That’s only one of many possible multimillion-dollar investments that could be brought on by Bill 395’s revival.

Quebec is not the only province held back by outdated regulation. Microdistillers in Ontario are also asking the government there to afford them the same freedom as the beer, cider and wine industries.

The C2MTL conference provides a perfect opportunity for the government to match its money with action. It’s not enough to fund a massive conference that inadvertently promotes unrealizable ideas. If Montreal is truly to innovate, it needs to let entrepreneurialism flourish. One easy and profitable step would be to bring back Bill 395.

Tom Kott is a consultant at HATLEY Strategy Advisors, a Montreal-based public affairs firm.



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