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.