Bill C-311 (Historical)

An Act to amend the Importation of Intoxicating Liquors Act (interprovincial importation of wine for personal use)

This enactment amends the Importation of Intoxicating Liquors Act to add an exception allowing individuals to import wine for their personal use to the provision that requires that all imports of intoxicating liquor be made by the province.

Importation of Intoxicating Liquors Act

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

moved that Bill C-311, An Act to amend the Importation of Intoxicating Liquors Act (interprovincial importation of wine for personal use), be read the second time and referred to a committee.

Madam Speaker, it is with a tremendous amount of pleasure that I rise in the House today to kick off the first hour of debate at second reading of Bill C-311, An Act to amend the Importation of Intoxicating Liquors Act (interprovincial importation of wine for personal use).

I would first like to recognize the work of my colleague from Kelowna—Lake Country. Members will know he has done a great deal to move this important issue forward and to help an important Canadian industry grow and prosper.

I would like to share with all members of the House why I believe this bill is important.

Twenty years ago in the province of British Columbia there were roughly 15 wineries. Today the number is closer to 200 growing close to 10,000 acres of grapes, with a crop yield in excess of $40 million annually. More importantly, this has created an industry that provides thousands of jobs, even spinoff industries, such as, barrel making, stainless steel tanks and fabrication, laboratories, bottle and label making, marketing, and agri-tourism.

The economic benefits of the wine industry are far reaching. It is a clean industry that does not pollute our skies or rivers and is something at which many families can prosper, including first nation communities. That is correct. In the riding of British Columbia Southern Interior is Canada's first aboriginal owned winery. It makes great wines. In my riding of Okanagan—Coquihalla, much like the ridings of Kelowna—Lake Country and British Columbia Southern Interior, we know first-hand the significant value and economic benefits of the wine industry.

Here is something very exciting. Nova Scotia is an emerging wine region. In fact, I have learned that Nova Scotia has discovered a great varietal called the l'Acadie grape which is well suited to the local climate and produces great wine. Today, as an emerging wine region, there are roughly 15 wineries in Nova Scotia, exactly where British Columbia was 20 years ago. Let us not forget that today B.C. has close to 200 wineries. That is great growth and prosperity for the B.C. wine industry and holds great potential for the province of Nova Scotia.

It does not end there. I have also learned that in the province of Quebec there are now five different wine regions and within those five regions are some 50 Quebec wineries that also produce some great wine. In Ontario the number grows to close to 140 wineries with roughly 16,000 acres planted in grapes. In fact, there is now a winery in every province of this great country. That is why we must not overlook the importance of supporting the Canadian wine industry, but there is a challenge.

Some 83 years ago during the prohibition era, a law was passed to make it illegal for everyday citizens to transport or ship wine across provincial borders. It is, for all intents and purposes, an interprovincial trade barrier, meaning that a winery in Quebec cannot legally send a bottle of wine to a customer in Alberta. Here is where it gets more redundant. That same Quebec winery that cannot legally send a bottle of wine to Alberta can send that exact same bottle of wine to Texas. Many small Canadian wineries can access markets outside our borders more easily than they can inside our own great country.

Canadians have proven that they can produce some of the best wine in the world and yet they cannot sell the wine directly to consumers in other Canadian provinces. We, as members of Parliament, have an opportunity to work together to change that by supporting Bill C-311.

Imagine if cars built in Ontario could not be sold in British Columbia. What if prized Nova Scotia lobster could not be sent directly to all households across Canada? This is the reality for many of the small Canadian wine producers. Those in the wine industry have been battling this unjust prohibition era legislation for many years, but collectively they have been the underdog. For a small family winery, as the vast majority of them are, without sufficient volume and financial resources, selling through large-scale provincial liquor distribution is very costly. That is why this prohibition era legislation is particularly harmful, because it restricts any marketplace alternative.

I am not a wine drinker, but I do appreciate that all across Canada from coast to coast we have families who work very hard to grow grapes. They invest their life savings into their vineyards and turn those grapes into a value-added commodity that helps drive our regional economies and puts people to work. However, an 83-year-old prohibition law essentially denies these same Canadian wine producers the ability to access the Canadian marketplace like every other Canadian producer can.

I will talk about how the bill hopes to rectify this situation, but first I will provide some background for the benefit of members.

The Importation of Intoxicating Liquors Act controls the importation of intoxicating liquors into Canada and between provinces. Ultimately, the Canada Revenue Agency is responsible for the Importation of Intoxicating Liquors Act, typically referred to as the IILA. At the border, this is administered by the Canada Border Services Agency. However, neither the CRA nor the CBSA administers or enforces the IILA in respect of interprovincial transactions.

Currently, the IILA dictates that all imports of wine from one province into another must be made solely by the provincial liquor board or a private corporation designated by that province. This prevents wine to be brought in or to be shipped by an individual from one province to another. This is why Canada Post and other shipping companies will not allow a citizen or a winery to directly send wine across a provincial territory. It is also why it is illegal for citizens to transport wine in person across provincial borders. That means if someone travels to Gatineau and purchases wine, the moment it is brought back to Ottawa, the person has broken a federal law according to the IILA.

Bill C-311 would amend the IILA to allow Canadians to purchase wine while visiting another province and then bring that wine back home into their own province. Bill C-311 would also amend the IILA to allow for domestic wineries to market and sell their products directly to consumers from other regions of the country.

To be clear, the purpose of the exemption is solely for personal use and not for commercial purposes. The personal exemption quantity limit is established individually by each province in question. To date, both Alberta and Ontario have developed a personal exemption policy for a provincial exemption definition. Other provinces have declined to develop a personal exemption on account of the IILA making the personal importation of wine illegal. That is why it is so important that we take action to create this personal exemption.

I would like to take a moment to share with the House that this proposal has generated a great deal of support from across Canada. In fact, even today I received a letter from Federal Express Canada in support of this bill. The Canadian Vintners Association and the Canadian Chamber of Commerce are in support of a personal exemption for the delivery of wine directly to consumers from outside their home province.

When reading the newspapers recently, I was pleased to learn that the Liberal finance and revenue critic, the member for Kings—Hants, supports the idea of reforming the IILA. The leader of the B.C. NDP agrees and last week stated that the B.C. NDP is advocating for an industry that employs a lot of people, is of huge value and is a cultural symbol in the Okanagan and a lot of other regions as well. I would also note that our NDP colleague, the member for British Columbia Southern Interior, has also made it clear to the Minister of Agriculture and Agri-Food via correspondence that he would like to see changes to the IILA on behalf of his constituents.

Before I close I would like to share with the House the reality of a small family-run winery in my riding.

A typical 15-acre vineyard can yield roughly 40 tonnes of grapes per year. Those 40 tonnes of grapes, all going well, would then produce just 2,500 cases of wine. To sell through the large-scale liquor distribution system is very costly for a small winery. In my province, a small family winery is potentially looking at costs of 60% to sell through the liquor distribution branch, LDB, bureaucracy. That means of the 2,500 cases of wine, the first 1,500 cases are sacrificed solely to pay for the overhead of selling through a government corporate structure. That leaves just 1,000 cases of wine for a small family winery to try to pay the bills, provide jobs, pay taxes and make a living.

The reality for small wineries is that they cannot afford those kinds of costs. That is why opening up the Canadian marketplace is of such critical importance to the wine industry.

This week a small winery owner told me that this IILA exemption could increase his business by a potential 10%. That means more capital would be available for him to invest into expanding his winery. When I asked the winery owner what he would do with that added revenue, he was very quick to respond. He needs to build another 2,500 square foot building. That new building would house some new stainless steel fermentation tanks that would also need to be purchased. That creates jobs and supports our economy.

I would like to thank my colleagues for listening to my comments today. I am hopeful they will join me in supporting this bill and the Canadian wine industry.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Madam Speaker, I would like to thank the hon. member for his speech.

I have a question for him about Bill C-311. Currently, certain governments that do not use an exemption collect revenue on wine imported from other provinces. I would like my colleague to give me some reassurance.

Could the member explain to me if this bill would prevent a provincial government from collecting revenue from a wine imported by an individual from another province? Basically, would the province that wishes to continue to get revenue from those be allowed to do that?

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Madam Speaker, there is no question that Bill C-311, if passed, would result in increased wine sales. Currently all of Canada's major wine-producing regions have the HST that is applicable on the sale of wine, regardless of where that wine is sold across Canada. Increased sales would mean more HST revenue both to the federal and respective provincial governments. There is also HST on shipping so, again, we would see a net taxation gain for many of the provinces that have these wineries.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, I rise with pleasure to assure the hon. member for Okanagan—Coquihalla of the complete support of the Green Party caucus for this long overdue reform. In Saanich—Gulf Islands, we also have numerous wineries. I could name them but it would seem to be pandering to my constituents who run the Muse Winery, the Garry Oaks Winery, the Church & State winery, Salt Spring Vineyards, and I could go on.

I commend the member for bringing this bill forward. I will do everything in my power to help it pass. I hope all members in this House will ensure this legislation passes.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Madam Speaker, I appreciate my colleague's support.

Many of the winery owners I have spoken to have suggested a sales volume increase in their business of at least 5% and close to 10% due to this change. In the case of every winery owner I have spoken with, increased revenues will be directly and immediately reinvested into the local economy, something I am sure the member's riding would be supportive of due to her riding's involvement in the industry.

[Mark Adler, Conservative, York Centre, ON]

Madam Speaker, I would like to congratulate my hon. friend for righting an age-old wrong and getting rid of an old anachronism that does not really apply in our time.

In 1988 we saw the opposition parties, both the Liberals and the NDP, oppose the Canada-U.S. free trade agreement. We have seen them oppose a number of free trade agreements. They are never supportive of releasing the barriers to trade and creating more opportunities for business.

Has it not been proven that once Canadians are allowed to compete on the world stage, we can prosper? The member's bill is a great example of allowing Canadians to act freely on the world stage.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Madam Speaker, there is no doubt that Canada is a trading nation and we benefit from trade. One of the reasons we will hopefully see all-party support for this bill is the fact that public opinion is far ahead of us. This is simply a catch-up to right a policy that is no longer held in public opinion as being a good one. We could allow those small family wineries to prosper and take control of their own destiny. I think that is something all members of this House want to see. We want to see jobs and growth in our ridings.

[Scott Brison, Liberal, Kings—Hants, NS]

Madam Speaker, I support this legislation wholeheartedly and intend to be one of the seconders of the legislation.

In my riding of Kings—Hants, we have seen tremendous growth in the wine industry. In fact, on our property we raise L'Acadie grapes ourselves. Those L'Acadie grapes resulted from research at the Kentville research station.

Does the member agree that the government must invest in regional local research in these research stations across Canada and that local research is fundamental to growing--

[The Deputy Speaker, NDP, Denise Savoie]

The hon. member for Okanagan—Coquihalla has 20 seconds to respond.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

I will be as quick as I can, Madam Speaker.

In my own riding we have the Pacific agri-research station. The Ambrosia apple came from that, so yes, I absolutely believe that we have a role to play in research and innovation. It helps our farmers to stay competitive internationally and provides jobs in the economy of the future, not just in traditional industries.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Madam Speaker, I rise today to say that I am in favour of sending this bill to be studied in committee. The question is not so much about governments losing revenue as it is about helping small business and small producers. My colleague was right to say that many provinces, Quebec included, have small wineries, and this bill would allow them to increase production as well as trade between provinces.

In this case, it should be made clear that the bill is specifically about individuals. It says:

...the importation of wine from a province by an individual, if the individual brings the wine or causes it to be brought into another province, in quantities and as permitted by the laws of the latter province, for his or her personal consumption, and not for resale or other commercial use.

It is important to examine this in committee in order to understand the potential repercussions of this bill in terms of loss of revenues for a government. Certain points need to be studied. For instance, since the Province of Quebec does not allow individuals to import wine and there is no exemption for this, that province could suffer losses. This risk exists for other provinces, too. On the other hand, this bill would stimulate the economy, which is good. It would help small businesses, especially at a time when economic uncertainty is at our door. This bill could really be beneficial for small businesses that really need help right now.

Thus, it is important to look at all aspects affected by this bill. I know many people support it, like my colleague. At first glance, we can see the benefits this bill could have in terms of job creation and assistance to small wine producers.

However, I would like to add that, at this stage, it is difficult to really assess its impact. One study said:

It is not possible to determine the impact of Bill C-311 on stakeholders, such as wine producers and provincial/territorial governments, in part due to differences among the provincial and territorial liquor-related statutes and exemptions contained in those statutes. In addition, prohibitions regarding the interprovincial/interterritorial importation of wine are not enforced consistently in respect of consumers and wine producers. Wine producers are unable to ship orders directly to individuals across provincial/territorial borders; however, individuals who transport wine from one province/territory to another on their person are rarely charged with an offence.

That is from a report submitted as part of the prebudget consultations for budget 2011.

The activity that would appear to be most affected by the bill would be the direct shipment of wine to individuals across provincial borders.

For wine producers, a beneficial effect of the bill would likely be an expanded market for Canadian wineries, resulting in higher sales, more jobs, and increased investment in winery equipment and infrastructure; the provinces would thereby benefit from additional income tax revenue.

There are obviously benefits in this regard. The bill would allow more production and more trade between the provinces. Wine lovers, especially individuals, would be able to go to another province and bring back wine to their province without necessarily breaking the law. However, what is important once again is to look at the limits imposed by the provinces. The report also states:

However, any increase in wine demand could be limited by any personal exemption provided by the provinces or territories, which for most is no more than 1.5 litres of wine.

There already are some restrictions and exemptions. For example, in Ontario, there is a nine-litre exemption. Thus, someone who buys wine outside the province can bring back up to nine litres.

For provinces and territories that have a personal consumption exemption, the effect of Bill C-311 on provincial/territorial revenues could be zero, assuming that individuals would not exceed the amounts allowed in the exemption. If individuals order amounts that exceed the personal consumption exemptions, then provincial/territorial liquor authorities would decide how to enforce the exemption amounts.

For provinces/territorial that do not have an exemption, the primary impact of the bill could be a decrease in provincial/territorial revenues in the event that individuals who would normally order wine from other provinces/territorial through their provincial/territorial liquor board, commission or corporation would perhaps instead order directly from the winery.

Some of the repercussions must be analyzed. Let us take a look at what happened in the United States.

A U.S.study examining interstate wine shipments found that, when a similar prohibition on interstate alcohol importations was lifted in the United States in 2005, interstate sales of wine increased by 11.5% between 2005 and 2008; however, wine sales that did not have tax deducted by either the shipping state or the receiving state, whether due to wine producers not charging taxes consistently or due to tax evasion by consumers, increased by 9.6% over the period.

These data could suggest that a loss of tax revenue might occur with increased accessibility to direct wine shipments in Canada. However, other sources have argued that wine sales directly to individuals in Canada represent an estimated 1% of the Vintners Quality Alliance 100% Canadian wine sales; thus, the bill's impact on liquor board, commission or corporation revenues could be limited.

That comes from the House of Commons Standing Committee on Finance pre-budget consultation in 2011.

The issue here is to really look at what the impacts are and what the benefit will be, obviously for the wine producers but also for all the other producers or makers who are related to wine as well. My colleague did mention that there are a lot of people involved in that industry, so it could be beneficial.

I think Canadians will strongly benefit from a greater selection of wine, especially from the smaller wineries across Canada. We need to really look at the options and what this will bring to the economy.

In terms of analyzing, as I mentioned before, it is really difficult for us to know exactly how loss will occur due to the loss of revenue for provincial governments. We should sit down and look at it. That is why it is important for the Standing Committee on Finance to look at all the options and all the benefits that would bring.

There are some issues with the bill, but when we look at the benefits, especially right now in terms of the economy, helping our wineries, especially the small wineries, could be very beneficial. It is something we have to look at.

[Scott Brison, Liberal, Kings—Hants, NS]

Madam Speaker, it is a pleasure to rise today to speak to Bill C-311, An Act to amend the Importation of Intoxicating Liquors Act (interprovincial importation of wine for personal use). As the law stands today, it is illegal to purchase wine from a winery in one province and then bring it home.

In Canada a consumer cannot purchase a bottle of wine in one province and then transport it across a provincial border. One cannot purchase wine online or have it sent by mail if the wine is coming from a different province. I use these examples because simply laying out the facts as the law stands now, it seems difficult for people to believe we have a law in place that is this nonsensical and anachronistic.

The reality is it is easier today for a consumer to import wine from another country than to import wine from another province. There are more trade barriers between New Brunswick and Nova Scotia than there are between Canada and Chile, as an example. This ridiculous situation needs to be addressed and this legislation is a big help in addressing it.

As an example, if people from New Brunswick make the very short trip to visit a winery in the Annapolis Valley of Nova Scotia, they cannot even bring wine home with them. It is against the law. There are both federal and provincial laws that make this activity illegal. Most of these rules date back to the prohibition era. They are outdated and they needlessly cost Canadian jobs. We need to get rid of them.

That is why I am proud not only to support but also to second Bill C-311. The bill would get rid of the federal rule against importing wine from one province to another as long as that wine would be for personal use and not for commercial purposes. It would amend Canada's Importation of Intoxicating Liquors Act to create an exception for personal use. I would argue that we ought to go further to include the restaurant industry and commercial use as well. That is a discussion for another day and also engagement with provincial governments.

The legislation would not get rid of the problem entirely. Most provinces will still not allow wine to be imported from another province, but Bill C-311 sends the right signal and provides some federal leadership by removing the federal obstacle. That is a step in the right direction.

Thankfully, the Province of Ontario is already moving in that direction on the provincial side. This past summer the LCBO changed its rules to allow individuals to bring with them up to nine litres of wine from another province. It makes me wonder why they would choose nine litres when wine comes in cases, of course. However, sometimes the bureaucracy does things that we cannot understand. It is like buying cars that never seem to take whole containers of antifreeze. Anyway, that is another discussion.

In any case, it is a step in the right direction. I commend the Ontario government for taking that step. We need every province to make these kinds of changes.

The member for York Centre referred to the Liberal Party's aversion to free trade. In fact, the Liberal Party, with the exception of one election in 1988, has always been the party of freer trade. In fact, if we look from an economic perspective, liberalized trade is something that is key to the Liberal Party and core to our beliefs on the economy.

In order to keep Canada's wine industry, including our wineries in Nova Scotia competitive, it is essential that we break down these barriers on the federal side and on the provincial side. In terms of Nova Scotia's wine industry, when I was first elected 14 years ago, there was one winery operating in my riding of Kings—Hants. As of 2010, there are now 17 farm wineries and 30 grape growers operating vineyards. It is a $10 million a year industry.

The hon. member referred to the fact that today the Annapolis Valley in Nova Scotia is perhaps where the B.C. industry in the Okanagan Valley was 20 years ago. That is quite right. It would be helpful for us to look at what lessons we can learn from what has occurred in the Okanagan Valley and in the Niagara region. We should also look at the genesis of the wine industry in the Napa Valley, the Sonomo Valley and central coast. We should be looking at these and determining best practice on a local level.

In any case, the success of these wineries in my riding has created huge spinoffs for restaurants and tourism, and the whole foodie-type tourism which is growing. It is a remarkably valuable resource and an enhancement to the quality of life for people who live in the Annapolis Valley of Nova Scotia.

In my riding of Kings--Hants we can now boast nine wineries: L'Acadie Vineyards in Gaspereau, operated by Bruce Ewert; Avondale Sky Winery in Newport Landing, operated by Ben Swetnam; Benjamin Bridge Vineyards in Gaspereau, operated by Gerry McConnell and his family; Blomidon Estate Winery in Canning, managed by Greg Benjamin; Domaine De Grand Pré in Grand Pré, managed by Hanspeter Stutz, winemaker Jurg Stutz; Gaspereau Vineyards in Gaspereau, managed by Dan Burns, winemaker, Gina Haverstock; Luckett Vineyards in Wolfville, operated by that great Nova Scotian entrepreneur Pete Luckett; Muir Murray Estate Winery outside of Wolfville, operated by Dr. Jonathan Murray; and Sainte-Famille Wines in Falmouth, operated by Suzanne Corkum.

In terms of recognition, people are taking notice of the wines in Nova Scotia. Many of these wineries are now winning awards. As an example, at last year's Canadian Wine Awards, Bruce Ewert of L'Acadie Vineyards received a gold medal for his 2007 Prestige Brut. Nova Scotia is excited to host this year's awards in November 2011.

A recent Globe and Mail article on Benjamin Bridge Brut Reserve was titled, “Surprise! One of Canada's best wines is from Nova Scotia”.

It said:

I’ll say it straight. One of the best Canadian wines I’ve tasted comes from Nova Scotia. I’m only surprised that it didn’t come from the Champagne region of France. It’s called Benjamin Bridge Brut Reserve...

The sparkling wine industry is evolving successfully in Nova Scotia as well as the ice wine industry. The success is also enhancing our orchard industry and value-added industry related to the orchards and the emerging cider industry. There are a lot of spinoffs.

This is probably a bad sign for any industry, when politicians start to enter it, but a couple of years ago we planted a vineyard on our property on the shores of the Minas Basin. We have a wonderful south-facing slope on the shores of the Minas Basin. We planted L'Acadie vines and we are intending on expanding that this year. In my line of work, it is always good to have a backup plan.

The wineries in our region are drawing tourists from throughout the country and around the world. Tourists are touring the wineries, eating at our restaurants, staying at the inns, the bed and breakfasts, and hotels, supporting the local economy.

What is really crazy is that in many cases people from other parts of Canada, after sampling the excellent local wines, cannot buy a case to take it home with them. That is nuts.

I remember in the 1990s, I lived in New York and travelled throughout the U.S. doing business. I remember spending a weekend in Napa Valley. We bought cases of wine and had them shipped back to us in New York. It was great. That is the way it should be. It is not only good for the local economy, but it is civilized.

The idea that we cannot transport wine across a provincial border is so nonsensical and damaging to the development and the evolution of businesses, wineries and restaurants. It makes no sense whatsoever.

In terms of the future growth of Nova Scotia wine, more and more Nova Scotians are discovering and supporting local wineries. In fact, last year the Nova Scotia Liquor Commission sold $109 million of worth of wine. Of that, almost 6% of that was local wine from Nova Scotia.

Even in terms of our own province, it is growing. The key, the way to grow our markets, is to actually expand so that we can sell wine across Canada.

Nova Scotia has a population of less than a million people, so our market is too small to sustain the kind of growth that we are able to achieve in our industry. We need to remove these needless interprovincial trade barriers and open up our markets so that local businesses can create jobs and grow the economy.

I know I am delving into areas of provincial jurisdiction which is always a mistake for a federal politician, but nevertheless.

I am a citizen of Nova Scotia. I did not relinquish my citizenship to become a federal politician. As such, I do have opinions and one of those opinions is that neither the provincial liquor commission in Nova Scotia nor the provincial government need be in the liquor business to begin with. Last year the liquor commission made $230 million and was run by bureaucrats. Imagine how much it would be worth if it were run by retailers who understood the markets. We could privatize that and take $3 billion or $4 billion off the provincial debt.

[Scott Reid, Conservative, Lanark—Frontenac—Lennox and Addington, ON]

Madam Speaker, I agree with much of what is being said today, particularly by the sponsor of the bill, the member for Okanagan—Coquihalla. He is a well informed advocate on behalf of the wine producers of his region as is the member for Kelowna—Lake Country, who was the sponsor of this legislation in the last Parliament.

I am supporting this bill in part because of what it would do for the wine industry and also because of what it potentially would do as a model for all of our value-added agricultural products, for which wine is the template model.

We have an agricultural industry which ultimately goes in one of two directions. It can either produce on a mass scale some kind of modified product, and there is nothing wrong with doing that and doing it effectively, but that naturally assumes economies of scale and the end of the family-operated farm or agricultural producer, or it can produce a value-added quality product which has a clear line of sight between the producer and the consumer, so that the consumer can identify that he or she really likes a certain product and then chooses to seek out that product either through a retailer or through direct purchase from the producer.

That is what we are trying to cause to happen with this legislation, to allow individuals to visit a winery in whatever province it happens to be, find a product they like, and arrange to have it shipped back to them. This is something which I have done myself within my own province.

A few years back my wife and I visited the Niagara Peninsula and arranged to have a couple of bottles of wine every month sent from Andrew Peller Estates to our house in Lanark County. That is possible because they are both in the same province. If there were an intervening provincial boundary, we would be out of luck and the winery would be out of luck, and that potential relationship would be severed. Again, we are not commodity consumers of wine my wife and I. We are not volume consumers, but we are willing to spend more to get a better product to make our evenings and meals more enjoyable.

I think that reflects many consumers of wine and of other products that are of a similar nature, such as cider, craft root beer, various maple products, various types of cheese, and so on. All of these can follow potentially the model that is presented by wine, and which if we think about it, is an agricultural product. It is nothing more than grape juice that has been fermented a certain way. The grapes are certainly fermented a certain way, preserved a certain way either in oak barrels or in bottles, and then sent off to the consumer. As a result of the magic that happens in between, it becomes a potentially valuable product and it allows the creation of a robust, rural economy.

Many links have already been pointed out. Agri-tourism results from a prosperous wine growing region. I am an enthusiastic agri-tourist myself, and particularly the various wine trails. I am just going to give a small and partial list of some of the wine trails I have been on to make the point because they are models of what can happen when producers can establish that link with consumers and start shipping products to those who like what they taste.

I have been on the wine trail and have visited vineyards in, among other places, California, New York State, and Massachusetts of all places. I was on a tour in New Zealand along with several other MPs and we went to some of the wineries there. I have also been to five different Australian states, every Australian state except Queensland, which is too warm to grow a decent wine. I could go on.

I have visited wineries in a number of provinces, but I have never been able to legally import that wine. I was on the wine trail in the Saint-Jean region of Quebec. I was on the wine trail from Nova Scotia back to Ontario. I inadvertently, and unknowingly illegally, brought back some Quebec wine. I did not know there was Quebec wine until I went to language training in Saint-Jean and discovered SAQ, bought a bunch of it, brought it back, again breaking the law unknowingly. I am no longer in contravention of the law because the wine is now gone. That should not have happened.

Had I actually known that I was doing this and said that I liked this stuff and wanted to buy some more, they would have told me I could not do that. That is a problem that should be corrected. One of the reasons why it should be corrected and why this rule change is beneficial in Canada in a way that would not conflict with jurisdictions is that our wine industry is not based on the kind of mass production in some other jurisdictions. In parts of South America such as Chile, Argentina or in Spain there are entire landscapes which have rows and rows as far as the eye can see of grapevines producing massive quantities of what is largely a commodity product.

Canada's wine production is based on microproduction, microclimates, and small areas. In Quebec, for example, the wine areas were located and identified largely by Swiss investors who were familiar with growing on south-facing hillsides in their own country and identified using satellite images of soil temperature, areas that would successfully have microclimates. When there is a microclimate in a small area to work with, there has to be a certain type of production which is all about quality rather than quantity.

That means it is linked into agri-tourism, visiting people from other provinces, people who are going to establish a taste for the wine which is already a premium product and arrange to ship it back. That is the kind of market that naturally will benefit from a widespread market, a market that is thin in terms of the number of people in any given part of the country who like the product, but broad in terms of the coverage.

Speaking of another illegal wine drinking experience I had at one point, some friends went to Nova Scotia, brought back sparkling wine my colleague talked about a minute ago from Jost. We enjoyed it together in Ontario illegally and unknowingly. I could not go to the Jost website to order some for my personal consumption. I could visit Nova Scotia, but realistically developing a market through the Internet is not an option that is available to me as it would be, ironically, if I were returning home from Nova Scotia to my home in the State of Maine. That definitely is a particular aspect that needs to be emphasized.

We are trying to get rid for the sake of prosperity of various trade barriers. On the international level we are doing a better and better job as a country. We established the North American Free Trade Agreement. We have negotiated trade agreements with countries as small and remote as Colombia and Jordan, and with various European countries. We are now working on removing trade barriers with the EU as a whole, also India. There are a lot of exciting things going on and some of the provinces, to their credit, are trying to get rid of their own trade barriers. British Columbia and Alberta negotiated a trade agreement which was called TILMA and I think Saskatchewan has joined in, and that is good.

This, however, through an artifact of history, is a federally created trade barrier. This is a step we as federal politicians, federal statesmen let us say, can take to get rid of an unnecessary impediment to the prosperity of our rural areas, to the cultural well-being of our consumers, and to the general betterment of the kind of rural areas that people like me represent.

In my riding we have two wineries at this point. Again, most of the riding is far too cold, but on the north shore of Lake Ontario in Lennox Addington County there is an area where it is possible to grow wine in small quantities, but it is very good wine. Two wineries, Bergeron and 33 Vines, are in many respects typical of the kinds of vineyards that are across the country in many provinces that deserve to have the ability to sell across provincial lines to the willing and enthusiastic customers who are out there hoping to sample their excellent product.

[Randall Garrison, NDP, Esquimalt—Juan de Fuca, BC]

Madam Speaker, I am very happy to rise to speak in favour of Bill C-311, An Act to amend the Importation of Intoxicating Liquors Act (interprovincial importation of wine for personal use), an act from 1928.

As a bit of a digression, there was a time in 1928 when these kinds of prohibitions created some opportunities in the area in which I live. The ship named Malahat was built in Victoria in 1917. It was a five-masted schooner nearly 80 metres long, which carried 60,000 cases of rum down to California. It would sit in international waters and then have small boats run through the American prohibition. We are talking about a law that dates from an era that is obviously a long time ago and a very different situation, a law which no longer serves a useful purpose and in fact inhibits the development of many small wineries around the country.

On Vancouver Island there are now 26 wineries operating. In order for those wineries to operate, they buy lots of things locally. They buy all of their agricultural equipment, fertilizers and marketing goods and they employ people to build websites. It is a very important link to a lot of small businesses in my riding in particular and around Vancouver Island.

It is also very important, as many have mentioned, to the tourism industry. People who come to visit my riding could start at Starling Lane Winery on West Saanich Road, cross over to Salt Spring Island, as my friend from Saanich—Gulf Islands said, cross back to Cherry Point Vineyards in Cobble Hill, Yellowpoint Vineyard in Ladysmith, Blue Grouse Vineyards & Winery in Duncan and come to the largest winery on Vancouver Island, Averill Creek Vineyards in Duncan. All of these are family-owned enterprises and small businesses.

As many have already mentioned, the peculiar thing is if people from British Columbia have a designated driver and sample the wines at each of the vineyards, they can take a case with them or order one shipped to their homes. However, people from Alberta or Quebec cannot have wine shipped to them or take it with them as they drive across the country. This is completely non-productive, which is the nicest word I can think of to use, for economic growth and development in all of these regions, particularly for small businesses that face the challenge of high costs these days.

One thing that is particularly difficult for wineries on Vancouver Island and in the Okanagan are the increasing land costs. When a small winery is established, wants to expand and buy more land, it is very difficult, so it needs to make use of whatever revenue sources it can to develop its business further. If wineries were able to run online businesses and ship across the country, it would be important revenue generation, which would add very little in terms of costs to their operations. It might be the difference between wineries being able to survive as a family-supporting business and not being able to survive in the future. The damage the existence of this law has done is quite serious for small businesses and may become more serious as time goes on.

In contrast to the hon. member for Okanagan—Coquihalla who is not a wine drinker, I will join the others who have confessed to being wine drinkers. My partner and I like to go on wine tours in the Okanagan. We have done it on several occasions, taking turns being the designated driver each day and stuffing the car full of bottles when we drive home. However, if we lived in Alberta, we could not stuff the car full of bottles.

On our last tour, some people I know who run a winery, one of my favourites, Road 13 in Oliver, asked me if they could ship me a case. I replied that as a newly-elected MP I would love to have a case shipped to me so I could entertain members with fine B.C. wine. They said that I could not do that. They said that they could not sell it to me, I could not advertise for them or promote the industry because of the existing very archaic law.

We drove across the country this summer through the Okanagan. If we had managed to stuff wine under the seats of our car, or put a few in the back seat next to the dogs and delivered it here, I would be unable to invite members for a drink later for two reasons: first, there might not be any left; and second, I would not have done that because it would be illegal for me to do so.

I make light of this because it is an absurd situation we are in, where small businesses that are doing very well in developing very high quality wines cannot market those to other Canadians in other provinces.

I look forward to this going to committee. I look forward to the debate on it. I look forward to the day when I can invite members around to my office to sample some of the great wines from British Columbia, but that will not be tonight.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Madam Speaker, it is with a great deal of pleasure that I rise in the House today to speak to Bill C-311, an act to amend the Importation of Intoxicating Liquors Act (interprovincial importation of wine for personal use).

I will begin by recognizing the work of my colleague from Kelowna—Lake Country on this file and congratulate him on his very important work. Members will know he has done a great deal to move this file forward and I am sure we will continue to work together to address this issue in order to help Canadians improve their ability to have greater control over the wine they choose and help an important Canadian industry to grow and prosper.

As background, for the benefit of all members, the Importation of Intoxicating Liquors Act, or the IILA, controls the importation of intoxicating liquors into Canada and between provinces, as we have been discussing. The Canada Revenue Agency is responsible for the IILA, as it interacts with the Excise Act and the Excise Act 2001. Canada Border Services Agency administers the IILA at the border. However, neither agency administers or enforces the IILA in respect of interprovincial transactions.

Since 1928, the act has legally restricted the movement of wine across provincial borders. While this may have responded to the needs of the day, Canada did not even have a wine industry at the time. However, today fantastic wineries can be found in provinces from coast to coast. Vineyards are a fast growing and increasingly important part of our agricultural sector and they could be growing even faster.

Many of Canada's innovative vintners have earned worldwide recognition for their outstanding products. Indeed, Canadian wines are frequently the recipients of international prizes. These award-winning wines are in demand around the world.

Despite this progress and success, Canadian wineries find themselves in contravention of federal law if they respond to requests for their products from consumers in neighbouring provinces. That is because the IILA makes it a crime for consumers to purchase wine directly from vintners beyond their provincial borders.

Not only does the legislation penalize consumers by limiting choice and their access to Canadian wine products, it also hurts the culinary and wine tourism industry, an important sector of our economy in my home province of Ontario and in beautiful British Columbia due to the increasingly popular tourist wine regions in these areas. Wine tasting tours in areas like the Niagara region of Ontario and the Okanagan or Fraser Valley in the B.C. Interior are tremendously popular with domestic tourists and visitors from around the globe.

More important, this outdated aspect of the legislation limits wineries' sales of their products across Canada. This is particularly the case for small and medium-sized wineries that are just getting their business off the ground. Many wineries complain that the process of applying to provincial liquor boards to have their products put on the store shelves can be lengthy and costly. The last thing these vintners need is 83-year-old legislation that hinders job creation and stifles economic growth.

[The Deputy Speaker, NDP, Denise Savoie]

Order. The hon. member will have approximately four minutes when the bill returns on the agenda.

The time provided for the consideration of private members' business has now expired, and the order is dropped to the bottom of the order of precedence on the order paper.

The House resumed from October 20 consideration of the motion that Bill C-311, An Act to amend the Importation of Intoxicating Liquors Act (interprovincial importation of wine for personal use), be read the second time and referred to a committee.

[The Acting Speaker, Conservative, Bruce Stanton]

When the question was last before the House, the hon. member for Kitchener—Waterloo had four and a half minutes remaining in his speech.

The hon. member for Kitchener—Waterloo.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Mr. Speaker, I am very pleased to have the opportunity to continue to speak to Bill C-311, brought forward by my colleague from the riding of Okanagan—Coquihalla who is doing great work serving his constituents.

The amendment contained in Bill C-311 is clearly long overdue. There are also clear advantages to adopting it. For example, this progressive amendment to the legislation would reduce red tape by lowering the regulatory burden on the wine industry. This is a priority for our government. We are determined to help businesses and entrepreneurs succeed, keeping taxes low, investing in projects of national importance, and maintaining Canada's brand as one of the best places in the world to invest.

Consistent with our government's commitments, this long-awaited reform would reduce barriers to internal trade. This anachronistic aspect of the Importation of Intoxicating Liquors Act is out of step with global trends to liberalize internal trade. Once adopted, this amendment would remove an irritating federal obstacle to trade.

Bill C-311 sends a strong signal that Ottawa is getting out of the way on an issue that is squarely within provincial jurisdiction. The federal government does not have the authority or means to stop the interprovincial movement of goods at provincial borders. The IILA merely serves as an umbrella under which the provinces and territories exercise their authority to control the importation of wine products into their jurisdictions.

Provincial and territorial governments administer a system of licences and permits to distribute, transport, detail and use alcohol products. They would be free to develop or amend their own legislation, should they so choose, to enhance or expand the interprovincial trade in wine. For instance, some provinces and territories designate communities as being dry or impose community-controlled restrictions on the purchase of alcohol. Nothing in Bill C-311 precludes them from continuing to do so.

Most crucial, this legislation would respond to the needs of the business community in an industry currently being held back from achieving its full potential. Individual wineries, most particularly those in British Columbia and in my home province of Ontario, along with the Canadian Vintners Association, have repeatedly requested permission for more liberalized domestic access to their products. As one example, according to local media reports, Vineland Estates in Ontario receives at least 100 requests for its products from consumers in other provinces every month, a need it is currently unable to satisfy because to do so is illegal. Being free to sell wine directly to consumers would enable Canada's winemakers to expand their operations and create jobs in local communities. Bill C-311 takes us closer to making this happen.

Canadians have been calling for an exemption to the IILA to remove the federal obstacle for individuals to purchase wine directly from wineries anywhere in Canada for their personal consumption. They should be able to buy a favourite wine made in a neighbouring province without worrying about breaking the law. These calls have the backing of numerous municipal and provincial chambers of commerce in wine producing regions across the country as well as the Canadian Chamber of Commerce because they know the impact this could have on jobs and economic growth. Members of the opposition have also endorsed these necessary amendments, no doubt because their own constituents are also telling them it is time to act.

In an era when it is possible to buy products from just about anywhere on the planet, via the Internet, and have them shipped in a matter of days to people's homes, it is almost unbelievable that Canadian consumers are currently contravening federal laws if they attempt to purchase wine from their favourite out of province winery. We can take an important step toward putting an end to this restrictive practice by voting today to adopt the amendment contained in Bill C-311.

I strongly encourage—

[The Deputy Speaker, NDP, Denise Savoie]

Order. Resuming debate. The hon. member for British Columbia Southern Interior.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Madam Speaker, I am pleased to speak today in support of Bill C-311, An Act to amend the Importation of Intoxicating Liquors Act (interprovincial importation of wine for personal use).

Over the past years, as our former agriculture critic, I have been working with the Canadian Vintners Association, CVA, on behalf of wineries in my riding and right across the country to get some movement on this important issue.

At the request of local vineyards and the CVA, I have written a number of letters to the Minister of Agriculture and Agri-Food on this issue. For example, on September 21, 2010, I wrote the following letter to the minister:

Please find attached copies of letters that I have received from Mr. Tim Martiniuk, General Manager of Stoneboat Vineyards in Oliver, BC and Mr. Dan Pazkowski, President of the Canadian Vintners Association. These letters outline the need to modify the Importation of Intoxicating Liquors Act (IILA) to allow Canadian consumers more flexibility when purchasing wine at local wineries.

I concluded my letter by saying:

On behalf of our BC wineries I would like to thank you for the efforts you have already undertaken with the Provinces to improve the accessibility of our excellent wine among Canadians. I encourage you to explore other federal options that will facilitate a workable solution. Please be assured that you can count on my support on any initiatives that will advance this issue.

Yesterday I met with Mr. Pazkowski, as well as with Mr. Luke Harford, vice-president of the CVA, on another important matter that concerns our Canadian wine industry, that of the 21.2% excise duty that is paid on all wines sold in Canada that do not come under the VQA or Canadian-grown label. What this means is that Canadian blended wine producers pay an extra 10.78¢ per litre of excise duty which is hurting their industry. I will be following up with the minister on this issue.

As a result of yesterday's meeting, Mr. Pazkowski, at my request, has sent me the Canadian Vintners Association talking points on Bill C-311, hot off the press, which I would like to share with the House in the time remaining.

The first question that is often asked is:

Why is this important to Canadian producers?

According to the association, and I agree, this change would:

Facilitate better choice for Canadian consumers so that more Canadians can enjoy the full range of great Canadian wines.

Ensure that Canadians who have visited wine producing areas and tasted the products can continue to get the products they have enjoyed as tourists if the wine is not available at local liquor boards.

Help Canadian producers increase their market share at a time when imported wine products are increasing their portion of the market and dominating liquor board listings.

Will this undermine the current system of provincial liquor authorities?

A personal exemption is NOT intended to undermine or destroy the current system of liquor boards. Despite the best of intentions and the support of liquor boards in producing jurisdictions for the Canadian wine industry, liquor boards are not able to carry the full range of Canadian wines, due to supply requirements, space restrictions, etc.

Allowing a limited amount of 100% Canadian wines to be supplied directly to Canadian consumers from wine producers or to transport wine across provincial borders would represent a very small percentage of total wine sales. A personal exemption of 12-24 cases per year per adult consumer is not going to undermine the liquor board system.

For small wineries, these sales could represent an important revenue and profit stream they would not otherwise receive. The products likely to be traded are small volume but higher value wines which are not available in liquor boards and are of interest to premium wine consumers. Higher profits by wineries are shared with governments in the form of higher taxes.

Who would participate in an electronic direct delivery of wine across provincial borders if a personal exemption was put into place?

Such a system would respond to the desires of a “select group” of wine connoisseurs/consumers who want variety, quality and regional wines. This select consumer group has a shopping strategy and is willing to:

pay the transportation fee

order a set minimum quantity (e.g., 6-12 bottles)

order more expensive wines at a price point of at least $15 per bottle

consider both online and retail purchases

Yet another question that is often asked is:

How much 100% Canadian wines would be sold under such a system?

It is difficult to accurately measure the volume of wine sales from wineries that would be sold to tourists and wine enthusiasts. We anticipate that Canadian tourists are currently purchasing wine while on vacation at wineries and transporting this wine across provincial boundaries, without knowing they are violating the IILA.

US data shows that Direct Sales represents approximately 2% of total production in the US, of which approximately 1% is DCT shipments (tasting room delivery, internet, phone, wine club).

Based on the US model, approximately 1% of total 100% Canadian wine sales would take advantage of direct sales which could represent approximately 27,500 cases per year and would be drawn from wines that are not available at a local liquor stores via tasting room deliveries, internet, phone or winery wine club purchases.

This would also stimulate greater interest in retail sales at both wineries and liquor boards, resulting in greater market access across Canada and greater tax revenues and sales for both wineries and liquor boards.

The next question that is asked is:

Do Liquor Boards have a Meaningful Minimum Personal Exemption

According to the Vintners Association:

Liquor Boards have steadfastly opposed any amendments to the IILA to facilitate interprovincial trade in Canadian wine, even though total 100% Canadian wine sales across Canada represent a mere 6% of total wine sales.

With growing consumer pressure, liquor boards have further attempted to circumvent proposed amendments to the IILA by recently introducing small volume personal exemption limits.

For example, in Ontario the LCBO Board of Directors recently adopted a policy permitting Ontario residents of legal drinking age to transport 9 Litres of wine (equivalent to one case of 12 bottles) on their person from another Canadian province or territories, as long as it is for personal consumption. Other provinces have lower personal exemption limits [for example] Newfoundland (1.14 Litres) and PEI (2 litres) etc.

The Vintners Association would like to make two important points:

(1) Provincial personal exemptions are restricted to wine transported on your person, and do not permit the use of winery wine clubs, internet, phone, etc. This restricts the use of modern technology and limits the opportunity for Canadian consumers to access wines unless they travel to BC, Nova Scotia [or other provinces] which does not happen often in a country the size of Canada. Alternatively, you have the option to use the slow and expensive liquor board private order program.

(2) Provincial personal exemptions (e.g., the LCBO policy) are technically illegal since it contravenes IILA Section 3(1) that all alcohol entering a province be purchased by or on behalf of the Crown and Section (5) that anyone who contravenes the IILA is liable to penalties on summary conviction.

To ensure that liquor boards treat the issue seriously, it is important that Bill C-311 include a reasonable quantity. Industry fears that leaving the quantity to the provinces will provide limited benefits to Canadian consumers and would fail to address the spirit of Bill C-311.

I will continue with another question that is posed in this document, which is:

Are Provincial Private Order Programs effective?

The answer is:

Many liquor boards have introduced private ordering programs for wines that are not available at their provincial stores. This system requires consumers to request that liquor boards facilitate their communication with wineries, pay a premium for this service, and wait as much as 12 times longer for receipt.

In conclusion, I think Bill C-311 is a reasonable compromise. I would like to thank my colleague from Okanagan—Coquihalla for introducing this bill.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Madam Speaker, I am pleased to be part of the debate on this private member's bill, Bill C-311.

I wish to congratulate my colleague from Okanagan—Coquihalla, a riding in the beautiful province of British Columbia, on this very sensible bill. I am pleased that all the parties in the House seem to agree that it is a good thing to do.

I also want to congratulate my colleague from Kings—Hants for being the seconder of this bill and having spoken on behalf of the Liberal Party in support of it.

I represent a riding in British Columbia that has a large wine industry.

The wine industry is of growing importance in my province.

We have heard from members who have spoken to this bill that the current law makes no sense. We are dealing with a law that dates from 1928, the Importation of Intoxicating Liquors Act, which was passed more than 80 years ago. This law was brought into force following the lifting of prohibition on alcohol. Some of the elements of the law at that time were overly restrictive because there was no clarity as to how the use and sale of alcohol would proceed following the period of prohibition.

What happens under that law established 80 years ago is that people visiting a vineyard in the province of British Columbia who come from another province in Canada would be able to taste wine, buy a bottle or two and consume it in B.C. However, they would not be able to take any home or order any to have sent home. This makes no sense from many perspectives, one of which is the trade barrier that it implies.

We are one nation. We are a united nation. We are a nation of Canadians who are united in many ways. One way to unify us is to reduce barriers to trade, to increase the prosperity of small businesses and their workforces. When there is a trade barrier that does nothing to protect people, it is important that we look at those laws, update them and change them. That is exactly what Bill C-311 is all about. It is time to change that law.

The changes proposed are widely supported. I know some of my colleagues have been speaking about that. It is a change that is supported by Canadian consumers who enjoy agri-tourism, visiting vineyards and going on wine tours. For example, the circle tours which have been developed in British Columbia are an important tourist product. People from other countries and provinces are invited. Some drive through the interior of British Columbia, one of the most spectacular parts of Canada, and through the Okanagan. They stop at wineries, enjoy high-quality meals, see the magnificent art on the walls, go on tours to see how wine is made and enjoy the products. It makes no sense whatsoever that if tourists visiting a winery come from south of the border, for example, they are able to have wine shipped to them, but if they come from Alberta, Nova Scotia or Quebec, they are not able to do that without breaking the law.

The law is actually quite strict. There is a $200 maximum penalty for a first offence. For a second offence, the penalty is between $200 and $1,000 or imprisonment of three to six months for the default of payment. I know some in the House might think that more and longer prison sentences are a good thing, but we all agree that for bringing wine from one province to another, it is completely ridiculous. This penalty actually goes up to between 6 and 12 months for each offence after the second offence. This a very out-of-date law.

Some concerns have been raised about the provinces' responsibilities in that regard. Will the federal government be acting in an area of provincial jurisdiction? I would like to say that that is not the case will Bill C-311, because it allows the provinces to set their own limits regarding the quantity of alcohol and bottles of wine that can be transported between provinces. This means that if a province does not want to import any wine and wants to stop all such imports, it can set the maximum amount at zero. Thus, the quantity or existence of this interprovincial exchange remains in the hands of the provinces.

Who is for this? It is very strongly supported by the vintners, of course, as well as the business community and even the provinces. I note that the solicitor general of British Columbia was publicly considering taking steps to reduce the effects of this antiquated law that made it an offence to take wine across a provincial boundary.

According to the vintners, the proposed amendments are widely supported by the Canadian wine industry. They are pleased to be able to facilitate consumer choice in wine. It is good for small business, for tourism and for people who love to sample wine from other parts of the country and bring it back to share with their families, friends and neighbours.

Having recently been on an economic tour of the interior of British Columbia, I noted that some of the rural communities that were struggling to develop their economies after a downturn in their logging industry. The local provision of jobs through logging are turning to agri-tourism. The vineyards and wineries are a high quality example of agri-tourism in British Columbia. In fact, our wineries are among the best in the world. We have a solid reputation for award winning wines. We want people to not only come and travel throughout British Columbia and bring their tourist dollars and leave them with the small businesses, the hotels, the restaurants and wineries, but we want them to be able to take some of that product home with them, or order that product.

Small and medium-sized businesses are the bulk of the wine industry. Almost all of Canada's wineries are small businesses. This is a very important part of rural economy and it is growing. The number of Canadian grape wineries has increased by roughly 300% to more than 400 wineries. British Columbia, of course, is one of Canada's wine centres and gives the other provinces a run for their money in terms of awards and recognition.

These are small businesses and our small and medium-sized business sector in Canada is incredibly important in terms of job creation, innovation and recycling money in the Canadian economy. Small and medium-sized enterprises employ two-thirds of the private sector workforce, overall. The wineries are an important segment of this.

In British Columbia, the B.C. wineries are happy to see this bill brought forward, so are wine lovers across Canada who can continue to appreciate and share with their friends the bounty that our vineyards produce.

[Cathy McLeod, Conservative, Parliamentary Secretary to the Minister of National Revenue]

Madam Speaker, I would like to take a moment to congratulate my colleague from Okanagan—Coquihalla for his excellent work on this legislation. He has certainly been a strong advocate for his riding and the many excellent wineries and vineyards of which his constituents are so proud.

I would also like to take time to acknowledge the contributions and the hard work of the member for Kelowna—Lake Country, whose efforts have been essential to the strong progress of the bill.

As other speakers have already noted, there are many compelling reasons to support my hon. colleague's private member's bill.

I would first like to start with a short story. I am a member from British Columbia. My parents lived in Ontario and they would come out for a visit every summer. As part of their treat, and part of what they did during the summer, they explored some of the wonderful wineries around our province. We found a sparkling wine that was of particular joy to our palates. For many years during their visits, this wine helped us celebrate births, different activities and celebrations. When they were in British Columbia, we always enjoyed this sparkling white wine.

I thought it would be nice to have this sparkling white wine when it came time to celebrate their 50th anniversary in Ontario. I did not know at the time about the Importation of Intoxicating Liquors Act. It turned out to be an absolutely impossible task to provide the sparkling white wine for this festive event. I was quite surprised to learn that.

Why was that such a challenge? It really goes back to the Importation of Intoxicating Liquors Act that dates back to the days of the temperance movement.

Unfortunately, the outdated provisions of the IILA have serious consequences for Canadian consumers and businesses. We are lagging behind our major trading partners on this important issue. The United States struck down barriers to direct consumer sales back in 2005. As long as certain provisions of the IILA stay in place, Canadian consumers will remain at a distinct disadvantage by not having access to wines from across Canada. Furthermore, this legislation intrudes into areas of provincial responsibility, an area where this government has no desire to be and does not belong. Our preference is simply to get out of the way and let the provinces go about their business in areas of their jurisdiction.

That is why the amendment only deals with the federal aspects of the prohibition-era law, which restricts the movement of wine across provincial boundaries.

Bill C-311 would ensure that provinces would maintain the ability to set policy regarding provincial exemptions on wine importation. They would be free to enhance or expand the interprovincial trade in wine as they saw fit.

There are also practical considerations related to this bill. For instance, although the IILA provides penalties for non-compliance, the law is challenging for the federal government to enforce. The proposed changes will make the IILA more relevant to the current travel practices of Canadians and will remove an unenforced section of law.

More to the point, our government's goal is to reduce, not create or maintain, barriers to provincial trade. We are working closely with our provincial and territorial counterparts to advance this goal.

However, the bill is not solely about governments' rights and responsibilities. It is fundamentally about giving consumers greater choice.

Currently, Canadians do not have easy access to made in Canada wines, which are internationally recognized as being the best in the world. Even though Canadian wines win awards around the globe, they are often not available outside the provinces in which they are produced. Liquor boards have limited space shelf and have tried to expand choice through private order programs, but they can be slow and costly. As in the case I was relaying earlier, it was just so cumbersome and burdensome that it was not worth the time and effort.

These costs are also a deterrent to the wine industry, especially small and medium-sized businesses trying to get a foothold in the marketplace. The wine industry is growing all across Canada beyond the well-known locations such as British Columbia and Ontario. Nova Scotia, Quebec, New Brunswick and Prince Edward Island are all involved in the wine-making business as they diversify their economies. These fledgling firms need our support, not government interference. Of all the arguments in favour of Bill C-311, few matter more to business people than the potential economic spinoffs of this legislation. This is particularly true in British Columbia, one of the most important wine regions in Canada.

To appreciate the importance of the sector to the provincial economy, let me provide a broad overview of the industry and members will see how much is at stake.

The wine industry in British Columbia is one of the fastest growing agri-food sectors. In 1988, B.C. was home to just 14 wineries. Today it boasts almost 200 wineries, 710 vineyards, producing 60 different varieties of grapes.

Or put another way, British Columbia now has 9,100 acres under vine, up from just 1,000 acres planted in 1989. People will find crops in all five wine growing regions of the province including the Okanagan, Similkameen and Fraser Valley as well as Vancouver Island and the Gulf Islands. In fact, I am proud to say that the wine industry is also of growing importance in my riding of Kamloops—Thompson—Cariboo.

Tourism across the province greatly benefits from the promotion of B.C.'s wine sector and it provides added value to visitors from around the world. Events such as Sun Peaks winter wine festival serve to cross promote our excellent regional wine as well as other attractions available in the region.

To translate these numbers into production volumes, one-third of Canada's grapes are grown in the province. The value of these crops is $40 million annually.

Let us extrapolate those to jobs in the province. The swelling ranks of people employed in both growing and harvesting the crops, hosting festivals and visitors and other related industries is extensive. Everything from festival planning to wine barrel production revolve around B.C. wineries.

Along with the growth in the sector has come exceptional skill. In 2010, B.C.'s maturing wine industry won over 1,600 medals in competitions around the globe. The province is especially recognized for its outstanding dessert wines.

This success is attracting global attention. According to Sotheby's International Realty Canada, people are coming from all over the world to see B.C.'s wine success story for themselves. It cites the examples of the Okanagan Valley, which is increasingly attracting international visits to its growing wine tourism region as well as its spectacular lake and scenery. It is worth noting that the Okanagan Valley has been named a Frommer's Top Travel Destination, a prestigious global ranking.

In addition to boutique wineries, tours and festivals, upscale restaurants, championship golf courses and luxury hotels, all cater to wine tourists. Many of these individuals fall in love with the idea of having their own vineyard. As a reflection of this interest, Sotheby's has created a distinct Vineyard Collection to market wine-related properties, drawing prospective buyers from as far afield as China, Italy and Germany.

A further spinoff of this interest and attention is a growing export market. Demand for high quality B.C. wines internationally has led to a nearly 300% increase in exports to Asia since 2008. Similarly, Canadians are free to purchase imported wines from other countries. How ironic that we cannot have access to these quality products grown right in our own backyard.

Even if Canadians buy wines on site when visiting wineries in other provinces, they are not permitted by the IILA to bring those purchases back home with them. Yet they can bring foreign wines through the border when they travel outside the country.

Consumers of domestic wines should not be shortchanged by the outdated Importation of Intoxicating Liquors Act, a problem that this private member's bill will finally address. For the first time in nearly a century, it will be possible for wine producers to sell their products openly and freely into other provinces in keeping with provincial laws. Unlike the 1920s, they have access to modern technologies like the Internet that make such sales simple and cost-effective. At the click of a mouse, even the most discerning wine palate could be satisfied with an award winning wine produced by Canadian vintners.

I call on all members to lend their support to this worthy and long overdue legislative change. Canada's wine makers are counting on it.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Madam Speaker, I too am very pleased to rise in this House and add my support to Bill C-311.

When the member for Brossard—La Prairie rose to speak on behalf of the New Democrats to kick off this debate, he indicated that we were supportive of the legislation and that we would be pleased to discuss it at committee and perhaps enhance the bill to make it even better for the wineries in Canada.

We are talking about Bill C-311, An Act to amend the Importation of Intoxicating Liquors Act (interprovincial importation of wine for personal use). The proposal is to amend the Importation of Intoxicating Liquors Act by providing a new exemption to the prohibition on the interprovincial importation of intoxicating liquors. This would allow the importation of wine from one province to another by individuals who bring wine or cause wine to be brought into another province for personal consumption. We are talking about a minor change to the legislation, but an important change.

Many other members have very ably outlined some of the technical aspects of the bill, but I want to take this conversation down to the local level to talk about why wine importation is so important in our individual communities.

In my riding of Nanaimo—Cowichan, I am very blessed to live in a rich agricultural area. We have many wineries in the Cowichan Valley. I want to talk about a recent festival because it highlights the rich diversity of Nanaimo—Cowichan. Many other members share this kind of riding, but I think it is important to highlight what this means to our local wineries, restaurants and farmers.

We just had a Cowichan wine culinary festival. The festival ran from Wednesday, September 14, to Sunday, September 18. When the invitation was sent out, all wine and culinary aficionados were invited to our wineries, farms and restaurants. The invitation talked about the range and variety of activities that would happen in the Cowichan Valley:

“Our community has rallied around our vintners, farmers, food producers and chefs who have created tasting or tour activities and events showcasing the best of Cowichan,” commented Mike Hanson, Festival Director, 2011 Cowichan Wine & Culinary Festival. “Together we are offering a truly memorable cultural destination experience”.

That is an important aspect of this. We are not just talking about growing grapes, but about making wine and incorporating it into a total experience. Of course, the Cowichan Valley is becoming quite well known for its winery tours, which incorporate visits to some of the restaurants.

The festival also offered an assortment of the region's best wines and ciders, tours and tastings, unique farm-fresh epicurean delights from organic farmers and food producers, live entertainment, green earth seminars, hand-blown glassware and your favourite bottles of wine over lunch.

Unfortunately, I was here in Ottawa during that period of time, so was not able to take part, but I know from speaking to people, despite the rain, that people came out in droves.

There was also an article on September 15 in the Times Colonist that said, “Duncan: an arbiter of good taste”. The columnist, Jack Knox, talked about the fact that we had the downtown Duncan grape stomp, which was literally where people gathered in downtown Duncan. There were a number of participants. The big barrels were set up, and people got in the barrels and stomped the grapes. The columnist suggested that perhaps this was a good anger management technique, but it really highlighted the kind of involvement that the Cowichan Valley has in supporting our local grape growers.

In the same article, the Times Colonist columnist pointed out that what has happened with Canadian wineries is that they are now focusing on quality, not necessarily price, and as other speakers have rightly pointed out, in British Columbia we have some very fine wineries that have taken awards all over the world. Over the past generation, the Cowichan Valley now has more than 20 wineries operating, and they are very fine wineries.

The columnist went on to say that because of their growth in wineries:

“With that came a degree of sophistication,” says Hilary Abbott, owner of Hilary's Cheese Co. in Cowichan Bay.

There is now also a site in Victoria, Madam Speaker, which I am sure you will be very interested in. It continued:

People who like well crafted wine like well crafted food. The Cowichan Valley really caught the Go Local bug, perhaps due to the growing conditions that have already made it a Vancouver Island breadbasket. Even Barber, the Canadian guru of fresh, good food, spent the last years of his life in this valley. “He liked to say this was the Provence of Canada,” says Abbott.

Cowichan Bay was a great example of the change. Languishing a bit in the 1990s, it saw a rebirth with the arrival of True Grain Bread, the nucleus around which other boutique food shops grew. “As a cheese company, we hitchhiked on their success,” Abbott says. The transition culminated in 2009 when Cowichan Bay became North America's first CittaSlow community, making it officially hip. “We like to think we're a culinary destination.”

For listeners who do not know what CittaSlow is, it is part of the whole international slow food movement that encourages us to slow down and enjoy our local food and the preparation of it. Little Cowichan Bay has become a leader in the CittaSlow movement in British Columbia.

People from British Columbia are very familiar with food expert Don Genova. In a blog he again talks about Cowichan Bay, but he expanded on the fact that we have Hilary's Cheese and True Grain bakeries. He also talked about the Cowichan Bay Seafood and Udder Guy's Ice Cream, which makes wonderful natural ice cream. People can tour down through Cowichan Bay and have our fine wines and fine local foods. It is the kind of rich diversity that this kind of grape growing has added to our community.

It is very important to bring that kind of reality to this kind of technical piece of legislation that we are talking about right now. In March a well-known B.C. broadcaster, Terry David Mulligan, publicly lugged 12 bottles from B.C., Washington State and Ontario, as well as some B.C. beer, across the Alberta boundary to draw attention to what he says was an antiquated law. The host of the Tasting Room Radio show was ignored by B.C.

Further on in this article, one of my colleagues was quoted as saying, “...changes to the law are supported by B.C. wineries, who say they want to be able to grow their business by allowing residents other than British Columbians to directly buy from them, and by members of a national vintners group”.

I certainly am hearing some widespread support from our local wineries for this piece of legislation and I know many people in this House would benefit if I were able to bring a bottle of wine here to Ottawa and share it with my colleagues. They would be able to understand the fine wines that we produce in the Cowichan Valley. I am sure they would be ordering them online as quickly as they could.

In his speech, the member for Brossard—La Prairie quoted some stakeholders who were in support of the piece of legislation but who also raised some cautions around it. As responsible lawmakers, it is always important that we consider a bill and review the potential impacts. However, in one quote he made in a pre-budget submission, he said:

It is not possible to determine the impact of Bill C-311 on stakeholders, such as wine producers and provincial/territorial governments, in part due to differences among the provincial and territorial liquor-related statutes and exemptions contained in those statutes. In addition, prohibitions regarding the interprovincial/interterritorial importation of wine are not enforced consistently in respect of consumers and wine producers. Wine producers are unable to ship orders directly to individuals across provincial/territorial borders; however, individuals who transport wine from one province/territory to another on their person are rarely charged with an offence.

This pre-budget submission cautions us that we need to take a look at what the different provincial rules and regulations are to ensure we are not having an unintended consequence. That is always a responsible action on our part.

The other piece that some people have raised is that when we are looking at this exemption, we should consider whether the wineries are producing their wines from grapes that are all grown in Canada. There have been some issues. Some wineries have indicated their wine was made in Canada when, in fact, the grapes are imported largely from the United States and then processed here in Canada. There have been some concerns raised about that. The member for British Columbia Southern Interior, in particular, has always spoken in favour of labelling laws so that Canadians know exactly what they are getting.

I think this is a very positive move forward. I look forward to members in this House and other Canadians being able to take advantage of the fine wines in the Cowichan Valley and I urge all members to support this bill.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Madam Speaker, it is a pleasure to speak to Bill C-311 and support my colleague from Okanagan—Coquihalla and the other speakers throughout B.C. and across this nation who have already spoken to this bill, which is similar to Motion No. 601 that I introduced in November 2010 and that helped move this team effort to the stage that it is today. It is great that the spirit of Christmas is alive and well. The unity and camaraderie is great to see within the House of Commons. It is something that we can all embrace.

As was mentioned, we are a country of unity, a family, and this is something that has been identified as an archaic piece of legislation, the Importation of Intoxicating Liquor Act, which was initiated in 1928, post-prohibition. The federal government of the day thought it would be good to give the provinces the ability to control the distribution of wine, beer and spirits and receive a little of the tax revenue. It did not anticipate something called the Internet back then. Fast forward to 2011 and what we have is something that, as I mentioned, is an archaic piece of legislation.

We want to encourage Canadians to enjoy internationally award winning wines that are produced in all parts of this country. There are actually over 400 wineries now across the nation. Over 200 in British Columbia, many of them right in my riding of Kelowna—Lake Country, have received international awards. I had the opportunity to host the agriculture committee last year. It was quite interesting. Members tried to make me be the mule to illegally bring back some of this fine vintage that they could not find in the liquor stores here in Ontario, for example.

I applaud the initiatives some of the provinces have taken to date, some baby steps. The Ontario Liquor Board says that we can purchase from its private purchase program. The reality is that it often takes over a month or two to purchase that and at a significant markup.

Many of these wineries are boutique wineries, the mom and dads small operations that produce maybe 3,000 or 4,000 cases a year. That is not enough to supply the liquor board, so they are really captive in their own province. In order to expand their market share across Canada, we need to break down the interprovincial trade barriers. It is good for the economy. It is good for jobs. It is good for agriculture. It is good for tourism. It is a win-win for everybody.

I know there have been some concerns expressed by some of the provincial liquor boards of a loss of revenue.

I have had the opportunity to speak with the Canadian Vintners Association and consultants who have looked at this in the U.S. A number of states have analyzed this and now over 35 states have gone directly to the consumer with a minimal, they are saying 1% to 2%, loss in revenue for the liquor board. However, overall, the macro prospective, if we look at the agricultural support and at the tourism initiatives, is that it is a benefit all across the country.

I had to laugh when I was approached by Shirley-Ann George about a year and a half ago. I had met her on one of the trade committees that I had been working on for five and a half years. Our country is working on over 50 trade agreements internationally. She came to B.C. and visited one of the wineries in the Okanagan. When she came back to Ontario, she was very disappointed that she was not able to find her vintners quality assurance, VQA, that blend produced in the Okanagan. After she retired, she decided to take it upon herself to start an organization called Free My Grapes. The website is active. She has had all kinds of people contacting her saying, “What is this? This is ludicrous”.

The allowing of a personal exemption is something that we are encouraging the provinces to look at, whether it is 12 cases a year or something through a wine club or directly through vintners, something that is reasonable. We have been having discussions among all parties and we are basically in agreement here. We now have provincial parties across the country, even opposition parties, that have contacted me within the province of B.C. saying that they support this.

I think the time has come now to move forward, and bring this legislation into the 21st century. It will help, I think, demystify everything. As my hon. colleague from the Island just commented about Terry David Mulligan, I talked to him earlier today on how he had to host a tasting room show. I am not, by all means, a wine connoisseur, a sommelier. I just know a bad policy when I see one.

The fact is that this bill will take time to move through the process and many people do not understand that. We have democracy and we are working through the House. It will go through after Christmas, hopefully, and the committee will have 30 days to review the bill. It will come back to the House and then go the Senate. On May 8 Canadian vintners have their annual lobby day on the Hill. That is sort of the target date, we hope, when we can all raise our glasses and cheer the fact that we have broken this interprovincial trade barrier.

As we approach the Christmas season, I know people are engaged in festivities. I would ask that we all be responsible to one another, drink responsibly, and do not drink and drive. If people enjoy the beverages of Canada from coast to coast to coast, we can have a stronger community, a stronger agri-tourism sector and, most of all, support our small vintners by moving this bill by my colleague from Okanagan—Coquihalla through the House.

[Malcolm Allen, NDP, Welland, ON]

Madam Speaker, let me first thank the member for Okanagan—Coquihalla for bringing this bill forward. I would also like to thank the member for Kelowna—Lake Country, with whom I sat on the international trade committee in the last Parliament. We are in absolute agreement, except for one small discrepancy, which is that Niagara makes the best wine this country has seen.

Let me give credit to one of the vineyards. We will all hoist a glass with Niagara Grape if it gets a good VQA. It is actually 100% Niagara grapes, all grown in Niagara, and eventually put in a bottle.

Let me thank a gentleman by the name of Don Ziraldo. There was a time, unfortunately, in this country when the wine was not that good. Don Ziraldo said that it could be made better. He formed Inniskillin Wines many years ago with a partner and produced quality wines that eventually led to all of the small vintners who now make, with a vinifera grape quality, fabulous wines from coast to coast to coast. There are some now in Prince Edward County, Nova Scotia and the Okanagan Valley, which I had the great opportunity to visit last year and sampled wines up and down the valley.

I encourage folks to come to Niagara and the Welland riding. The Welland Canal is synonymous with the Welland riding. There are two fabulous wineries in my riding. Henry of Pelham and Hernder Estates are fabulous places to visit.

It is the right step to make. The bill will go to committee, where I am sure we can improve it and make it better. I would encourage folks to move this along because I want my friends to have wine made from Niagara grapes sent to the Okanagan Valley so people can have a great festive season next year.

[The Deputy Speaker, NDP, Denise Savoie]

I recognize the hon. member for Okanagan--Coquilla for the sponsor's right of reply.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Madam Speaker, I will begin by thanking the members of the House tonight for supporting Bill C-311. Many good questions have been asked and comments received. For me, it has been extremely heartening to hear from members from all sides of the House who also believe that having trade barriers within our own country because of an 80-year-old prohibition era law needs to come to an end.

When I set out to introduce the bill, it was out of concern for the many small family-run wineries in my riding and in the nearby ridings of Kelowna Lake Country and Southern Interior, wineries that are too small and cannot afford to sell to the large-scale liquor distribution monopolies.

I did not know then that Nova Scotia was an emerging wine region. I thank the member for Kings--Hants for his passionate and dedicated support for the wine producers of his region.

I also did not know that the province of Quebec is fast becoming a major wine producing province, with 5 wine producing regions and over 50 wineries.

I thank the member for Brossard—La Prairie for his support of this bill, and also the member for Saanich—Gulf Islands for speaking in support of this bill reminding us that there are great wines in her region of British Columbia as well. Of course, special thanks goes to all my colleagues in caucus, many of whom represent the great wine producing regions of Ontario and elsewhere in Nova Scotia and British Columbia.

Before I close, I will clarify a few points on my bill. I want to make it clear that my bill only proposes to remove a federal trade barrier that currently restricts a winery's ability to sell its wine directly to customers across Canada for non-commercial purposes. While the bill would remove the federal trade barrier, it also makes it very clear that it is ultimately up to the provincial governments to set personal exemption limits as they see fit. Already, some provinces have taken a lead on this, and I commend those provinces. However, other provinces have cited the IILA legislation as a reason for not taking action.

I would also like to make it clear that my bill deals only with the inter-provincial movement of wine. My bill proposes no changes to how wine is imported into Canada, nor does it amend the Excise Act.

To summarize, my bill would make it easier for Canadian wineries to sell to Canadians.

There is much that we have disagreed on so far in this 41st session of Parliament. It gives me great pleasure to know that when it comes time to removing trade barriers that prevent Canadians from selling to fellow Canadians across this great country that our House can come together and be united on behalf of our constituents.

Again I would like to thank all members of the House for their support for Bill C-311.

[The Deputy Speaker, NDP, Denise Savoie]

It being 5:30 p.m., the time provided for debate has expired. The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Deputy Speaker, NDP, Denise Savoie]

(Motion agreed to, bill read the second time and referred to a committee)