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.

[Dan Paszkowski, President and Chief Executive Officer, Canadian Vintners Association]

Thank you, Mr. Chair.

The Canadian wine industry is a $9-billion industry that manages 31,000 acres of vineyards, produces 85 million litres of wine, employs 37,000 Canadians and pays $1.7 billion in annual wages. In addition, Canada's wine sector attracts roughly four million tourists every year.

As as result, the national economic impact of a bottle of 100% Canadian wine is $90, or six times more than a bottle of imported wine sold in Canada. This poses an opportunity and a challenge: an opportunity because Canada is the wine market with the second-fastest sales growth in the world, and a challenge because we're the world's sixth-largest wine importer, with 91% of wine imports entering Canada tariff-free.

In our pre-budget 2019 submission, the CVA has proposed two recommendations.

The first is the immediate need for the federal government to prioritize the removal of interprovincial barriers for both personal transport and direct-to-consumer delivery of alcohol across Canada. Significant attention is rightly paid to international trade agreements, but we cannot forget to lead by example at home. Barriers to alcohol trade are long-standing, unjustifiable and costly trade irritants that must be resolved. Vulcanizing our already small domestic market and making it harder for Canadian wineries to grow and realize the economies of scale and other efficiency attributes of larger international competitors must be eliminated. This would benefit all Canadians through greater interprovincial commerce.

More than six years have passed since the historic passage of Bill C-311, yet only three provinces, representing 19% of the Canadian population, have amended their laws to allow for personal transport and interprovincial winery-to-consumer delivery. As such, it was a positive signal that the new Minister of Internal Trade's mandate letter outlined the importance of collaborating with provinces and territories and eliminating barriers to create a stronger, more integrated Canadian economy while fully exercising federal jurisdiction as outlined by section 91.2 of the Constitution Act and Supreme Court decisions on the regulation of trade and commerce.

When the first ministers conference takes place this fall, it is critical that the federal government lead by example and take every measure possible to allow Canadian wineries to enter the 21st century by supporting the implementation of interprovincial winery-to-consumer delivery across Canada.

Our second recommendation calls on the federal government to amend the Excise Tax Act and to eliminate the legislated annual inflation indexation of the excise duty on wine. Canada already has among the highest wine excise duty rates of any wine-producing country in the world, and inflation indexation will continue to negatively impact Canada's wine value chain. This is too rigid a tax policy.

Not only do economic circumstances vary across all regions of Canada, but Canadian wine producers risk losing market share to much larger global players if we pass the increased excise duty cost on to consumers. Canadian wines compete against thousands of wine brands, with imports representing the majority share of both value and premium-priced wines. It is important to reflect upon the size of our industry, considering that each of the top eight wine companies in the United States produces more wine than the entire Canadian wine industry. With a 33% market sales share in Canada, we lack pricing power, and as a result the unintended consequence is a government-imposed producer tax, placing business revenues, wages, taxes and jobs at risk.

Today, the Canadian excise duty on wine is double the rate of our largest trading partner, the United States. To make matters worse, effective January of this year, the U.S. government reduced its excise duty from 37¢ per litre to as low as 2.4¢ per litre by way of an excise tax credit, with full excise paid only beyond 2.35 million litres of wine.

The impact of inflation indexation and changes to a competitive tax policy is why parliamentarians should have the final say on all tax increases. Given the broad economic implications of legislated excise duty indexation on the entire wine value chain from producer to restauranteur, the CVA recommends that the government amend the Excise Tax Act to remove the legislated annual excise duty inflation adjustment.

Thank you very much.

[Dan Paszkowski]

Thank you. That is an excellent starting point.

For the Canadian wine industry to succeed internationally, we have to remove what I view as a non-tariff barrier within our own country, which is the ability to ship a case of wine to a Canadian consumer in another province, which isn't the case, with the exception of three jurisdictions, namely, British Columbia, Manitoba, and Nova Scotia. We are hopeful that will take place.

As you know, five years ago, Bill C-311 was passed. Both the House of Commons and the Senate approved an amendment to the federal Importation of Intoxicating Liquors Act to allow wine at that time, but it now includes beer, to be shipped across provincial borders for personal consumption. However, it was up to the provinces to make amendments to their own laws, which has not taken place. We are now at the point where it might take a Supreme Court ruling or the goodwill of the federal and provincial governments over the course of the next 12 months, beginning July 1, to come to an agreement on how we might be able to allow Canadian wine to be shipped from one province to another without fear of a significant financial penalty, or after three infractions, a significant time in jail, which is what the law says in the provinces that currently disallow trade across interprovincial borders.

Canada-European Union Comprehensive Economic and Trade Agreement Implementation Act

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Madame Speaker, I welcome the question.

Simply put, my bill, Bill C-311, opened up free trade of wine between Canadian provinces at the federal level. The federal government of the day later, in budget 2014, supported the same kind of treatment for Canadian beer and Canadian spirits. The previous government made huge leaps in that area, which not only helped that particular value-added sector, it also helped our farmers who feed into the inputs of that.

Again, the former minister of industry, Mr. James Moore, spearheaded an initiative for which the Liberals like to claim total credit, to have a new agreement on internal trade. We know that deals like CETA, which were supported by every single province and territory after extensive consultation by the previous government to get there, allowed for a good process of which we are bearing the fruits today.

Unfortunately, it is the same government that has not led collaboration with the provinces to the point where it would allow for beers, spirits, and alcohol to flow freely. We had a chance with the Comeau case in New Brunswick, where we could have elevated it to the Supreme Court to get that constitutional clarity. That member voted against it.

On this side of the House, we are always proposing ideas on which we can get pan-Canadian agreement and consensus. It is that member and his party who voted that down, and it is that member and his party who now support a carbon tax, which again is at odds. The Liberals say they want to work with provinces, but yet they impose mandatory carbon taxes that make our Canadian businesses less competitive internationally.

Opposition Motion—Internal Trade

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, in the last Parliament I appreciated the member's support for my Bill C-311. However, it also should be stated that the previous government had worked on the AIT, the agreement on internal trade, to add more classes to interprovincial mobility of labour. As well, in addition to wine, the government later adopted beer and spirits to have the same treatment as per my bill.

In regard to the member's question, we have left this to be very open. Again, if the case can be referred directly to the Supreme Court, we are very supportive of that. That is, if a reference can be made drawing upon the evidence of the Comeau case because Judge LeBlanc said that the evidence he had heard about section 121 was actually new evidence supplied. That is the reason we are suggesting this new evidence would allow the Supreme Court to revisit an issue that it issued a result for in the Gold Seal case in 1921. That narrowed the application of section 121. This is the new evidence showing that particular application is incorrect, and again, gives us the unique opportunity today to free up our economy by freeing the beer.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

moved:

That the House: (a) recognize that it is a constitutional right for Canadians to trade with Canadians; (b) re-affirm that the Fathers of Confederation expressed this constitutional right in Section 121 of the Constitution Act, 1867 which reads: "All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces”; (c) recognize that the recent Comeau decision in New Brunswick creates a unique opportunity to seek constitutional clarity on Section 121 from the Supreme Court of Canada; and that therefore, the House call on the government to refer the Comeau decision and its evidence to the Supreme Court for constitutional clarification of Section 121.

Mr. Speaker, it is certainly an honour to kick off our opposition day motion on a subject that is near and dear to me, which is the subject of interprovincial trade in this great country.

Let me first take a moment to provide some background on the subject and why this is an important debate for Canadians. First, let me take members back to 1867 and our Canadian Constitution. In our Canadian Constitution, section 121 states:

All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.

To the credit of our country's founders, they not only had the foresight to understand the critical importance of internal trade to our Canadian economy, but even put it, in plain language, I might add, directly into our Constitution.

Unfortunately, over the years since 1867, many provinces, through regulatory regimes, and in some cases outright protectionism, have created barriers that hinder internal trade. In fact, it is easier for winemakers in Nova Scotia or British Columbia to sell their wine to Asia than to sell it to Ontario. This is in spite of the fact, as I often pointed out during the debate on my wine bill in the last Parliament, Bill C-311, that seven out of every 10 bottles of wine consumed in Canada are made outside of Canada. Yet provinces like Ontario refuse to get on board and support the free trade of Canadian wine.

Over time our federal predecessors realized that internal trade barriers were limiting our economic prosperity in terms of both jobs and gross domestic product growth. That is why, in 1995, which was in the era of Prime Minister Chrétien, Canada's first ministers, working with the federal government, signed the first agreement on internal trade. The stated purpose of this new agreement on internal trade was, “to foster improved interprovincial trade by addressing obstacles to the free movement of persons, goods, services and investments within Canada”.

It was a historic, groundbreaking agreement for that time, and I will rightly credit the Liberals for the agreement occurring under their watch. I should take a step back to say that it was the Canada-U.S. agreement on free trade that caused these concerns to arise in the first place.

For the history buffs out there, of which I am one, some of the provincial premiers of the era who supported this agreement were Ralph Klein, Mike Harcourt, Gary Filmon, Frank McKenna, Clyde Wells, Jacques Parizeau, Roy Romano, and, as that was an election year in Ontario, both Bob Rae and Mike Harris.

These are prominent names, and these premiers represented the entire political spectrum, from the New Democratic Party to the Progressive Conservatives of the day.

From my work on internal trade, starting with Bill C-311 in 2011, I can say that internal trade is a very different subject for Canadians than international trade. While international trade deals are often divided between left and right on the political spectrum, when it comes to internal trade, it really comes down to right and wrong. From my experience, Canadians are hugely supportive of increased internal trade and think it is wrong that many Canadian producers can more easily access the markets of other countries than the markets of other Canadian provinces.

Let me provide an example of this that does not involve Canadian wine.

For the province of Saskatchewan, canola oil has become a significant driver of the export economy. Canola oil, which basically is a vegetable-based oil that has become an alternative for dairy products, has become known as Saskatchewan's other oil boom. Canola is considered to be the most profitable legal cash crop in our country and is part of a $15 billion a year industry in Canada. There is only one problem. In Quebec, the government decided to place restrictions on the sale of certain types of canola-oil-based products, things as common as margarine, for example.

The Quebec government of the time imposed trade barriers that were considered by many to be protectionist, given that over 40% of Canada's dairy industry is supplied by Quebec producers. Ultimately, this is where the Agreement on Internal Trade comes in. Saskatchewan challenged Quebec through the Agreement on Internal Trade process back in 2013, and in 2015, after two years of very expensive legal proceedings in Saskatchewan, it finally won the case.

I think most would agree that in today's fast-moving economy, two years in regulatory limbo is a long time. Critics of the Agreement on Internal Trade frequently reference this process as far too slow moving and extremely expensive.

Here is the good news. Everyone, including all of the provinces that first signed on to the original Agreement on Internal Trade, also agree that this now 20-year-old agreement needs to be replaced. In fact, at the Council of the Federation conference in Prince Edward Island in August 2014, the premiers not only announced that they would conclude a new agreement on internal trade but announced a deadline of March 2016 to do so.

Why did they do so? They did so because Canada's premiers recognized that internal trade is valued at $366 billion a year. That is roughly 20% of Canada's gross domestic product. These are huge numbers, and the best part is that eliminating interprovincial trade barriers would not add tons of new debt, nor would it increase the deficit budgets of governments. In fact, it is probably the most cost-effective way to increase jobs and help grow our Canadian economy. This is a point we all in this place can agree on.

What happened? We have to look to the deadline month of March 2016, the month when Canadian premiers, working with the federal government, should have been concluding an agreement on internal trade to see what happened.

We know that in March 2016, the new agreement on internal trade was derailed. We know that the Prime Minister summoned the premiers to a conference in Vancouver that month. We also know that this Vancouver meeting was not about internal trade but rather was the Prime Minister's attempt to force a national carbon pricing strategy on the premiers. That effort failed. Instead of a national agreement on a carbon pricing strategy, the only agreement we witnessed was an agreement to disagree and talk again at a future summit down the road.

Where does that leave a new agreement on internal trade? Frankly, here in this place, we do not know. We have been told that we will see something possibly in July, but already details are leaking out that a new agreement on internal trade will have all kinds of exemptions, alcohol, again, being one of them. No doubt, in today's debate, the government will use a potential new agreement on internal trade as a reason to oppose this motion, and that is not good enough to give our Canadian economy the kick-start it needs.

Fortunately, there is another way. First, let us recognize why we have so many internal trade barriers to begin with. The reality is that in many cases, over time, various interest groups have effectively lobbied successive governments of all political stripes. The purpose of this lobbying was to enact regulatory red tape that would stifle competition, limit market access, and in some cases, create monopolies. In other situations, provincial governments have directly intervened in certain industries, largely for self-serving political considerations. I know that this is a shocking revelation.

Instead of it being a political debate, which is often influenced by lobbyists, what if this were strictly a legal question? What is the constitutional right of Canadian producers to access Canadians in other provincial markets? Ultimately, I contend that this is the question we should be asking, and that is why debating this motion today is so important for this place and for our national economy.

If we can convince the government to elevate the Comeau ruling to the Supreme Court for clarification, we will be creating an opportunity to grow our economy and create jobs through increased internal trade, because it would be a constitutional right instead of a political backroom deal. If we think about it, that is what we are debating today.

What is the Comeau decision for those who may be unfamiliar? In New Brunswick, a local resident, Mr. Gerard Comeau was charged for personally importing beer and some spirits across a provincial border from Quebec. Fortunately, a New Brunswick judge, after hearing evidence regarding the original intent of section 121, the free trade provision of our constitution that I mentioned earlier, found Mr. Comeau was not guilty. Sadly, the Province of New Brunswick has decided to file an appeal.

It is for that reason we created the “free the beer” campaign. We had some fun with our “free the beer” campaign, which has been widely supported by Canadians, but let us not lose sight of what “free the beer” really means. It means asking the Liberal government to elevate the Comeau case to the Supreme Court for constitutional clarification, and to do that now, rather than waiting on further delays.

This not only has the potential to free the beer and other forms of alcohol for Canadians, but more importantly, it would open up our internal economy for all Canadian producers of a whole host of different products. This obviously includes farmers and other agricultural producers.

Imagine if buying Canadian truly meant buying from all Canadian producers in all provinces, something that in many cases we cannot do now. I submit that needs to change.

I would like to share a few quotes from the chief executive officer of Moosehead Breweries Limited. Moosehead, as some will know, is Canada's oldest independent brewery and is located in New Brunswick. When asked by the CBC on how elevating the Comeau decision to the Supreme Court would benefit the industry, the Moosehead CEO was crystal clear in response. He said:

“The sooner there's some kind of decision, the better for everyone involved,”....

He said Moosehead can compete in an open market if both tax and non-tax barriers to trade are eliminated by all provinces.

“We sell beer in all 50 states in the United States with pretty open borders and hopefully we'll get to that point in Canada soon.”

I like that last part, “hopefully we'll get to that point in Canada soon”. I hope so, as well.

How soon? Today, our Liberal government could vote yes on the motion. If it does, it would send a message that the Liberal government is committed to eliminating trade barriers and wants to help grow our Canadian economy. If the House supports the motion, members will be sending a message that growing our economy through increased internal trade is something they support.

I know the Liberal government, in particular our Minister of Finance, loves to use the talking point “grow the economy”. In fact, I found over 100 references to “grow the economy” from the finance minister alone. The motion would present an opportunity for the Liberal government to do exactly that, grow the economy through increased internal trade.

The best part is that there is little to no cost to taxpayers to remove interprovincial trade barriers, meaning the Liberals' second favourite talking point, “adding debt”, or what the Minister of Finance refers to as “investing”, is not required here. How about that? It is a debt-free way to help grow our Canadian economy. What do folks think about that?

Earlier today, the Standing Committee on Banking, Trade and Commerce from the other place issued a report on the very subject of interprovincial trade. In fact, it is called “Tear Down These Walls: Dismantling Canada's Internal Trade Barriers”.

Among other findings, this report concluded that internal trade barriers reduce Canada's gross domestic product by between $50 billion and $130 billion annually. Let us think about that for a moment. That is why among other recommendations this report also supports that the federal government pursue, through the Governor in Council, a reference of section 121 of the Constitution Act, 1867, to the Supreme Court of Canada.

The only question that remains is timing. When do we take action? Do we continue to wait for a new agreement on internal trade, as we have been anticipating, or do we recognize that the Comeau decision has created a unique opportunity to do so now. I think most would agree we need to take action now.

Canada could be a stronger country economically and it could be more prosperous, if we can truly harmonize our regulations to eliminate interprovincial trade barriers. Again, let us not forget that this need not be a political battle. This could well be a constitutional right for Canadians if only we dare ask.

With Canada soon celebrating our 150th birthday, the anniversary of Confederation, I can think of few better ways to celebrate from an economic perspective than strengthening our internal economy to create more access for Canadian producers.

Before I close, I would like to add a few points. Sometimes in this place motions are done for political or ideological reasons. Some motions are even crafted to appeal directly to certain interest groups or demographics. In this case, I believe that every member of this chamber has producers in their home ridings, be they farmers, small business owners, manufacturers, whoever. All of these people can benefit through supporting the motion before us.

In my view, anything we can do to help increase the accessibility of the Canadian marketplace to Canadian producers is not only helping to grow our Canadian economy, but it is also helping to grow a stronger, more united country. The Fathers of Confederation did not intend Canada to only be a political union. They intended and put it in section 121 that it is meant to be an economic union as well, yet for some reason, there are those who fear competition and increased consumer choice between provinces.

Internal trade barriers not only harm our Canadian economy, but they also stifle innovation and often give competitors outside our borders market access advantage because of our collective inaction. While we all support the notion of Canadians buying from Canadians, let us not forget that we must first remove the barriers so that Canadian-produced goods, products, and services can reach our local marketplace.

I ask all members of the House to support buying Canadian by supporting this motion to ensure we can remove barriers that stand in the way of Canadian producers. It is an opportunity that is before us. Let us grasp it together.

[Debbie Zimmerman, Chief Executive Officer, Grape Growers of Ontario]

Thank you for the opportunity to present the views of the Grape Growers of Ontario on, hopefully, promoting growth and reducing interprovincial barriers.

My comments today are on behalf of the Grape Growers of Ontario, which represents more than 500 growers on 17,000 acres of vineyards in three different designated viticultural areas in Ontario.

Our association works as an advocate for all processing grape growers in the province and works on their behalf to ensure their needs are met. Our vision is to see that the markets for Ontario grapes and wines expand domestically and internationally on a continuous basis. We're always working on finding new markets for our products.

Ontario-grown grape products, hopefully, in the future will be demanded at home and internationally recognized for many of the great wines we produce.

I'll give you a quick snapshot of where we are despite the cold weather. In 2013, Ontario had one of the largest grape harvests. It was recorded at over 80,000 tonnes. Our farm gate, just at the farm level, was $100 million. Ninety-six per cent of the grapes grown in Ontario are vinifera and hybrid wine grapes. However, due to the extreme cold last year, our grape harvest was much smaller at about 52,000 tonnes and valued at just over $62 million.

From our perspective, we know that grape growers in Ontario have a collective legacy of about $684 million of investment in the land, which contributes to the community's landscape. Obviously, that intrinsic value dividend can't really be measured, but we know the economic value of the wine regions in this country would not exist without our growers.

In 2013, Ontario grape growers contributed over $100 million directly and indirectly to Ontario's gross domestic product. As for labour income, over $40 million was paid to labour related to grape growing in the province.

What we know is, and I'm sure you've heard this already from CVA, that 60% of the wines sold in Canada are imported. The other 30% is comprised of 100% VQA and what we call international-Canadian blend wine, which is made up of domestic and, in part, imported bulk product. Canada has to own 50% of its market share in the future, which is considerably low even compared to other competing international wine regions which hold shares upwards of 70% in their domestic market. Australia is 90%. California is 63%. New Zealand is 57%.

A 2012 report that CVA produced also talks about how countries like Australia, the United States, New Zealand, France, and Italy are financially supported by their national and regional governments for both export and domestic markets to encourage wine sales. Grape growers in this country should not have to compete with the treasuries of foreign countries.

In 2013, Ontario's wineries brought home over 214 medals from international competitions. We have an excellent reputation. I think most people know that. The problem is we're not buying our wine in Canada; we're buying wine from other countries, and that is a huge concern.

It should not be easier to ship from a winery in Ontario to Memphis in the United States than it is to Montreal. Market access in Canada is one of the main impediments to domestic growth.

I need to pause here.

We did not agree explicitly with Bill C-311, because we had hoped that would have applied only to Canadian wines to be able to travel freely among the provinces. We have accepted the fact that Canadians themselves are not buying a lot of Canadian wine. We know wine consumption in Canada has increased 30% over the last five years; therefore, it's not surprising that Canada was the sixth largest importer of wine in 2014. We know that exporters have prioritized Canada's competitive pricing growth and prospects as a great target market.

We know that in 2014 alone, total importation of table wine into Canada increased by 3.9% to 291 million litres. We know that Canada's national grape and wine industry is fragmented and faces numerous challenges, including the current legislation, but we're not happy with the fact that Bill C-311 did not apply to domestic. We thought that was a good place to start and we had hoped the liquor boards would have bought into that concept. However, the bill has passed and now also applies to foreign wine to be able to travel freely among the provinces.

Vinexpo recently released its 12th study of the world wine and spirits market with an outlook into 2018, and quite frankly, if you're a wine exporter, particularly to Canada, you have a lot to celebrate. As I have already stated, this is not good news for Canadian wineries.

We think that we need to do a couple of things. We know the industry contributes $6.8 billion in total economic impact to the country. That has been proven over and over again, and I don't think I need to repeat these statistics. I've appeared before the Standing Committee on Agriculture and Agri-Food many times and talked about the economic value of a bottle of wine that is grown in Canada compared to a bottle of wine imported into Canada. We believe we have a great opportunity to grow, but we need Canadians to understand that there is an opportunity to buy Canadian wine.

The Canadian Vintners Association, in a 2013 presentation to this committee, noted that for every $1 million increase in Canadian wine sales, it leads to a $3.1 million increase in gross output: revenues, taxes, jobs, and wages—the value chain. It's a good investment for our economy.

With regard to Canada's domestic grape and wine industry, our industry alone generates $1.2 billion nationally in tax revenue and markups across the wine-growing provinces. We need a reinvestment of some of these moneys into the domestic market across Canada to build an awareness of Canadian wine.

We certainly support the idea that every wine region in the world has support from its home market first. Our country would benefit from policies that promote Canadian-grown wine, everything from putting wine on our national airlines, to promotion through any events that the Canadian tourism associations hold. It's pretty basic stuff. We need long-term, dedicated market funding from the federal government, hopefully to support marketing initiatives that grow the domestic market for Canadian products.

The Grape Growers of Ontario are fully in support of reducing interprovincial trade barriers and retaining the role of the provincial liquor boards. We want to see, though, that support 100% Canadian-grown wine. We think that is important for everybody across Canada. But we need the federal government's support to expand cultivation and the use of Canadian wine grapes through marketing initiatives. We need the government to help us build consumer demand at home. If we had just another 2% of consumer demand at home, we would certainly have a continuing growing region in Ontario, B.C., Quebec, and Nova Scotia. We think that's the best value for our wineries and our grape growers.

We want to build on that consumer awareness, and we want to build our domestic market, which is dismal, at 30%, to at least 50%.

I look forward to any of your questions. Thank you.

[Dan Paszkowski, President and Chief Executive Officer, Canadian Vintners Association]

Good afternoon, everybody.

Thank you for the invitation to provide the Canadian wine industry’s perspective on ways to promote growth and boost competitiveness by reducing interprovincial barriers. The CVA is the national voice of the Canadian wine industry. Our membership represents more than 90% of the wine produced and sold in Canadian and international markets. Our industry is made up of 500 grape wineries and 1,300 independent grape growers, contributing $6.8 billion to the national economy. We produce two types of products: premium 100% Canadian wines, representing a $3.7 billion economic impact, and value-priced international-Canadian blended, better known as ICB, wines made from imported and domestic content, representing a $3.1 billion contribution.

Grapes and wine are a prime example of success for Canada’s value-added agrifood industry. From vineyard development and grape cultivation to winemaking and bottling, our compounded impact extends well beyond cellar door sales and employment, with strong linkages to tourism, retail sales, bars and restaurants across Canada. As a result, the domestic wine industry helps support more than 31,000 jobs and is motivation for more than three million tourists to visit Canadian wineries each year.

The authority to operate provincial liquor boards is based on the federal Importation of Intoxicating Liquors Act, IILA, which requires that all liquor be purchased by, or on behalf of, the provincial government. Until recently, this federal law banned all shipments of wine, beer, and distilled spirits across provincial borders unless the importation was authorized by the receiving province's liquor board.

June 28, 2012 marked the first time in 84 years that the IILA was amended, following royal assent being given to Dan Albas’ Bill C-311, which received unanimous support in both the House of Commons and the Senate. The federal amendments exempt consumers from having to consign wine to the provincial liquor authority when bringing wine, or causing wine to be brought into the province for personal consumption. The exemption did not diminish a province’s control over wine within its jurisdictional borders; it simply provided the province with the right to permit a consumer to bring wine into the province for personal use. The amended legislation removed the federal government's barrier to shipping wine directly to consumers who reside out of province. As a result, most provinces and provincial liquor boards have elected to do the bare minimum. Today, 32 months after Bill C-311 was passed, interprovincial barriers to trade continue to impede the Canadian wine industry’s ability to grow and fully benefit from wine country tourism.

Since the passage of Bill C-311 the following provincial actions have been taken: Manitoba and British Columbia immediately opened their borders and allowed for the interprovincial shipment of wine for personal use. Nova Scotia announced that it will adopt regulations in 2015 to allow interprovincial winery-to-consumer sales. Saskatchewan, Ontario, Quebec, Nova Scotia, and P.E.I. bypassed the spirit of Bill C-311 by making regulatory or policy amendments to avoid direct delivery, allowing their respective residents to transport one case of wine per trip as long as the wine is transported on their person. New Brunswick and Newfoundland continue to restrict residents from bringing wine into the province with an existing exemption of one bottle for New Brunswick and 1.14 litres for Newfoundland and Labrador, which isn't even a wine container's worth. Recently, New Brunswick announced that it is going to make some changes which, we believe, means it will join the above provinces in allowing one case of wine to be directly delivered into the province on one's person.

In February 2014, we were disappointed to learn that Alberta had amended its laws to eliminate courier delivery of wine from another province, while allowing its residents to continue to transport unrestricted volumes on their person, thus invalidating the foundation of direct-to-consumer delivery.

In May 2014, FedEx was charged under the Newfoundland Liquor Control Act for allegedly transporting a case of wine ordered by a local consumer from a British Columbia winery. This so-called contraband liquor case will be heard in provincial court in June 2015.

Most recently, Saskatchewan and British Columbia launched discussions on a bilateral reciprocity agreement that will support the interprovincial direct delivery of locally produced wine and spirits between residents of those two jurisdictions.

Thus, despite widespread support for expanding consumer choice in wine, most consumers across Canada are prohibited from purchasing the wines they desire directly from an out-of-province winery.

At the CVA, we recognize the frustration of an industry that wants to grow and has the capacity to do so, but faces so many obstacles. The Canadian wine industry accounts for just 30% of annual wine sales volume, the lowest market share of any wine-producing country in the world. We have set a strategic goal of commanding 50% of the domestic market by 2020; however, to achieve this goal, we must secure additional opportunities for wineries to access Canadian consumers across the country.

Over the past decade, 300 new wineries have opened across Canada, stimulating more than $1 billion in capital investment. These wineries are predominantly small businesses focused on premium wines, and each year a greater volume of high-quality wine is produced, yet our premium VQA wines represent a mere 6% market sales share across Canada.

Provincial liquor boards are under no obligation to carry Canadian wines, yet our industry continues to work hard to grow sales within the established retail system, with limited success. Only two provinces have a VQA market sales share greater than 10%. The remaining eight provinces have a VQA market sales share of less than 4%. Of these, three provinces have a VQA market sales share below 1%, which is unacceptable.

Direct delivery provides consumers with an alternative to access our award-winning Canadian wineries, which can also relieve the mounting pressure on brick-and-mortar liquor boards with limited shelf space. We know from the experience in the U.S., Manitoba, and British Columbia that the amount of wine that will be shipped through interprovincial direct sales is limited. With a shipping cost of $3 to $4 per bottle, consumers will first check the availability of a sought-after Canadian wine in their home province or local retail outlet before ordering from a winery.

The reality is that wine is becoming the beverage of choice in Canada and presently accounts for 30% of the beverage alcohol market, up from 18% in 1995, making Canada among the fastest growing wine markets in the world. All major wine-producing countries are investing tens of millions of dollars into Canada to build their brand presence and sales opportunities. Combined with the reduction and elimination of import tariffs, wine imports have garnished 80% of total wine sales growth in Canada over the past decade.

Canadian wineries believe that direct delivery will stimulate more wine sales, drive tourism, and support greater investment and job creation in wine regions across Canada. This is good for Canada, as we know that every $1 increase in Canadian wine sales stimulates a $3 increase in gross output along the value chain.

The removal of internal barriers to wine trade would ensure that consumers have increased choice with access to a wider range of Canadian wine products; that wineries will maintain and expand market opportunities and build relationships, awareness, and consumer loyalty; and that provincial governments will continue to earn taxes, levies, and related costs based on services provided.

Since 2006 Canada has concluded free trade agreements with nine countries. Competition from imports is growing, and import tariff relief provided to the U.S., Chile, the EU, and soon to the Trans-Pacific Partnership countries has created and will create new competitive challenges, which demands that we secure free trade in our own market. This is the most important catalyst for growth both at home and abroad.

To achieve our goal of growing the Canadian wine industry from a $6.8-billion sector to a $10-billion sector over the next five years, we recommend the following: enhance federal engagement with provincial governments to remove interprovincial barriers to wine trade; create an expert intergovernmental working group to facilitate an interprovincial direct-to-consumer alternative for Canadian consumers; implement a priority pilot project to remove interprovincial barriers to wine trade under the auspices of the Agreement on Internal Trade; and establish a multi-year federal funding program for Canadian domestic wine market development to grow wine country tourism and domestic market share for Canadian wines.

Once again, thank you for your ongoing support of the Canadian wine industry and for your efforts to remove internal barriers to trade.

Red Tape Reduction Act

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

Mr. Speaker, what I would start with first is I think it behooves this country and all Canadians to have a process in place to take advantage, the best advantage for everyone, of the estimated $650 billion of potential investment that can come through responsible resource development.

We need to have a process to separate the wheat from the chaff so that we know what projects can go ahead that are safe for Canadians and safe for the environment.

I have heard from people in my riding, some who advocate for the pipeline, some who advocate for its denial. Ultimately, we want to see jobs and the economy grow. When I talked to Mayor Litke at Penticton City Hall, he spoke of the need for infrastructure. Councillor Jakubeit has said that small businesses need to have a strong environment for them to grow.

The Red Tape Reduction Commission that travelled all across this country, 15 cities, 200 people, all those round tables, actually heard from British Columbia that we need to see interprovincial barriers to wine removed. Bill C-311 actually opened up that interprovincial transit of wine. This comes back to our strong steps on regulatory red tape.

We are supporting Canadians. We are making sure that good things happen for Canadian businesses.

Motions in Amendment

[Gerald Keddy, Conservative, Parliamentary Secretary to the Minister of National Revenue and for the Atlantic Canada Opportunities Agency]

Mr. Speaker, it is certainly a pleasure to rise tonight and debate Bill C-31, the economic action plan 2014, act no. 1.

I will not go into a huge amount of detail on all the various parts of the budget. There is a lot in the budget that is good for Canadians. I will zero in on a couple of points. I want to explain those points so Canadians thoroughly understand them. Anyone listening to the debate tonight would have a very difficult job separating fact from fiction on the opposition side. Those members make outlandish and wild accusations with absolutely no proof or credibility to back it up.

Year after year, budget after budget, our government has created the fiscal and policy conditions that help Canadian businesses prosper. Canadian citizens benefit from a high standard of living. That is a sentiment shared by many. Globally recognized authorities, from the Organisation of Economic Cooperation and Development to the International Monetary Fund, have ranked Canada as one of the best countries in the world in which to do business. In fact, they expect Canada to be among the fastest growing and strongest economies in the G7 over this year and next.

I bring that up for a very simple reason. If anyone is listening to the rhetoric in this place tonight, that is fact. That is not fiction. That is not made up. That is reality. If we stick to reality, we could actually have a good, solid discussion about the budget, but if the opposition members only want to engage in fiction, then we cannot have a proper debate over the budget. The reason is simple: facts speak for themselves. Over one million more Canadians are working today than during the worst part of the recession. That is the best job creation record of any G7 country during this period.

Of course, there is ongoing uncertainty in the global economic environment. That is why we must continue to encourage job creation and economic growth, the twin pillars of our economic action plan since its inception in 2009. It is also the reason why we must keep our sights firmly set on the goal of balancing the federal budget by 2015.

In economic action plan 2014, our government renewed its commitment to returning to balanced budgets, fostering jobs and economic growth, and supporting families and communities across Canada. Economic action plan 2014 act, no. 1 contains important measures that build on these three key priorities.

Today, I would like to highlight two measures in particular: the search and rescue volunteers tax credit and important amendments to the Importation of Intoxicating Liquors Act.

Since 2006, our government has put in place a number of tax relief measures to support hard-working Canadians and their families: the first-time home buyers' tax credit, registered disability savings plan, the family caregiver tax credit, pension income splitting and many more.

In Economic action plan 2014, we announced a new tax credit for ground, air and marine search and rescue volunteers. We are proud to publicly recognize the important role these brave men and women play and the difference they make in their communities. The non-refundable search and rescue volunteers tax credit is similar to the volunteer firefighters tax credit, which our government proudly introduced in 2011. Eligible search and rescue volunteers could claim it for 2014 and subsequent tax years.

Search and rescue volunteers are an integral part of Canada's emergency response network, supporting the Canadian Coast Guard, police, and other such agencies. Often working in dangerous conditions, they put their own welfare at risk time and again to ensure the safety and security of their fellow citizens.

To qualify for the new tax credit, an individual must perform at least 200 hours of volunteer search and rescue services in a tax year, for one or more eligible search and rescue organizations. Eligible search and rescue organizations include those that are members of the Search and Rescue Volunteer Association of Canada, the Civil Air Search and Rescue Association, the Canadian Coast Guard Auxiliary, and search and rescue organizations whose status as such is recognized by a provincial, municipal or public authority.

Search and rescue volunteers who perform at least 200 hours of eligible service during a year can begin to claim the new non-refundable credit on their personal income tax and benefit returns starting next year, on their 2014 tax return. Eligible service includes responding to and being on call for search and rescue and related emergency calls, attending meetings, and participating in required training related to search and rescue services, all of these activities taking place on a volunteer basis, of course. The credit will be calculated by multiplying the lowest personal income tax rate for the year by $3,000. For 2014, the credit will be 15% of $3,000, or $450.

It should be noted that the hours volunteered for eligible search and rescue along with firefighter services can be combined. However, only one credit for the year can be claimed, either the volunteer firefighters tax credit or the search and rescue volunteers tax credit. Volunteers with at least 200 hours of combined eligible search and rescue and volunteer firefighting services in a year will be able to choose between the two tax credits. Individuals who receive honoraria for their duties as emergency service volunteers will also be able to choose between the new search and rescue volunteers tax credit and the existing tax exemption of up to $1,000 for honoraria.

Our government is proud to add the search and rescue tax credit to the long list of tax relief measures we have already introduced for Canadians.

With my remaining time, I want to discuss our government's plan to modernize legislation left over from the prohibition days. The Importation of Intoxicating Liquors Act is a federal statute governing the interprovincial transportation and international importation of intoxicating liquors. It was enacted in 1928 at the request of the provinces after the repeal of their liquor prohibition laws. This legislation controls and restricts the movement of liquor from one province to another, as well as its importation into Canada.

Currently, the Importation of Intoxicating Liquors Act prohibits Canadians from taking beer or spirits across provincial boundaries. In Bill C-311, which was sponsored by my colleague from Okanagan-Coquihalla and received royal assent in June 2012, we updated some of the archaic provisions of the act by removing the federal barrier on transporting wine from one province to another for personal use. Bill C-31, the legislation we are debating two years later, contains the next logical step in the process of modernization.

The amendment we have proposed removes the federal barrier that prohibits individuals from moving spirits and beer from one province to another when it is for their personal use.

Our government is taking action within its jurisdiction to strengthen internal trade by removing barriers to the movement of goods within Canada. It is important to note that there is no change to the province's authority to set limits on personal importations of spirits and beer and that change to provincial liquor laws may also be required to allow the interprovincial movement.

I am proud of our government's record of achievement and our sound fiscal policies. We have invested in job creation and training, supported trade and innovation, and improved the quality of life for families and communities from coast to coast to coast. At the same time, we brought the overall tax burden to its lowest level of tax in 50 years. We have introduced measures that will keep us on track to a balanced budget in 2015-16.

I will conclude by simply saying that I am honoured to do my part to advance economic action plan 2014. I sincerely hope all members will join me in giving Bill C-31 their full support.

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

Thank you, Mr. Chair.

I find it helpful that the NDP are going to be supporting this because I think there are some things we can all agree on, regardless of party stripe. However, I would like to take issue with the point of consultation. If Mr. Mai were to read, as presented by Mr. Cotler, other than the parliamentary process there is no talk about consultation outside of Parliament. By supporting this amendment, you are saying that parliamentarians should conduct those consultations, which was done through this process. So, Mr. Chair, I would say by their support of this particular amendment, they are supporting the consultation process we've had with Canadians through consulting with the Minister of Justice, different stakeholders, victims' groups. I would simply point out that by voting for this he's affirming this is a good process to go through.

I have to say, through you, Mr. Chair, I enjoy working with Mr. Mai.

I have just one other point, Mr. Chair. We also have had legislation come forward—for example, Bill S-209, that was on the prize fighting provisions—and again that particular...dates back to 1903. So I think it's helpful from time to time, and as Ms. May will probably attest even on my Bill C-311, governments should review their legislation to ensure it is timely, up to date, and giving the best service to Canadians.

Thank you.

Concurrence in Vote 1—The Senate

[Rathika Sitsabaiesan, NDP, Scarborough—Rouge River, ON]

Mr. Speaker, I am pleased to rise this evening to participate in the debate on this important concurrence motion.

It is a belief of mine, as it is of the rest of my colleagues and many Canadians across the country, that the funding of $58,169,816 under the Senate program expenditures in the main estimates allocated for the funding of the Senate under vote 1 should cease to be provided to the Senate.

We are in the midst of a democratic crisis in this country, and Canadians across the country agree that there is no place for an unelected, unaccountable Senate in our democracy.

The origins of the Senate date back to Confederation. The members of the red chamber were asked to review and scrutinize legislation passed by the House of Commons. It was intended to ensure the representation of minorities and of provinces and regions in the federal legislative process.

As the member for Timmins—James Bay clearly articulated earlier, at the time that the Senate was created, these minorities were the wealthy people of this country. They were concerned that the interests of the wealthy few in this country might not be represented sufficiently in the elected House of Commons and wanted to make sure that people were appointed to represent the interests of the wealthy.

It was also intended to be less partisan. However, the Senate has never really played this role, as senators vote according to the party they represent rather than according to the interests of the regions they are supposed to be representing.

In the past few months, information has come to light about certain Liberal and Conservative senators that raises many questions and concerns about the use of public funds granted to those senators. Constituents and Canadians across the country are wondering about Mike Duffy and his $90,000. Fortunately, we have the Leader of the Opposition asking all the right questions, and Canadians are looking for real answers from the government.

Canadians deserve to know the details surrounding the $90,000 loan from former PMO chief of staff Nigel Wright to Mr. Duffy to repay housing allowances he falsely claimed. Despite his permanent residence being clearly in Ontario, Mr. Duffy declared that he lives in Prince Edward Island, where he owns a cottage. The $90,000 loan allowed Mr. Duffy to repay Canadians, and he now no longer participates in the audit. Mr. Duffy left the Conservative caucus, and on May 19 Nigel Wright also resigned for his actions. This transaction between Mr. Wright and Senator Duffy is now with the Ethics Commissioner to evaluate whether there was a violation of the Conflict of Interest Act. The RCMP is also investigating Mike Duffy's expenses.

Then we have Ms. Pamela Wallin, who is supposedly a representative from Saskatchewan, yet primarily resides in Toronto. Since 2010 Senator Wallin has claimed $300,000 worth of travel expenses not related to travel to her province of origin and has been seen at numerous Conservative fundraising events. The senator left the Conservative caucus and chose to sit as an independent as of May 17 of this year.

Then we have Mr. Patrick Brazeau, an even bigger embarrassment, who found himself in the middle of many controversies, including repeated absences from the Senate, an allegation of abuse of his housing allowance and charges of sexual assault. In 2012 Mr. Patrick Brazeau declared that his primary residence was in in Maniwaki, Quebec, which enabled him to receive a housing allowance for a secondary residence in the national capital region. However, we have all learned that media reports indicate the Maniwaki residence is actually the home of Patrick Brazeau's father. On May 9, Deloitte's audit and the report of the Senate committee on the internal economy ordered Patrick Brazeau to repay $48,000 in unjustifiable claims. The senator resigned from the Conservative caucus. We are seeing a trend here.

Abuse of privileges does not rest only with the Conservative caucus but with Liberal senators as well.

These are only some of the abuses of power that we are aware of at the moment. We do not know what else is to come. While we certainly need an independent audit of residency requirements, housing allowances and travel expenses in order to find out whether certain senators are abusing public funds, at the end of the day we need to abolish an institution that no longer serves Canadians.

In any other Canadian workplace, this type of behaviour and lack of responsibility and accountability would result in disciplinary action and, quite possibly, the cessation of the employment relationship, but here what we see are senators stepping away from caucus while maintaining all of their other privileges.

It is outrageous that according to Conservatives, senators are presumed innocent, but unemployed Canadians are guilty by default. It is clear that the Senate is incapable of rectifying its own problems.

While the Senate asked Deloitte to review the expenses of former Conservative Senator Mike Duffy, former Conservative Senator Pamela Wallin, Liberal Senator Mac Harb and former Conservative Senator Patrick Brazeau, the firm is still in the process of completing its audit.

The leader of the government in the Senate has stated that the Senate would make the audit public, but we know there is no guarantee that this will actually happen. Moreover, the Senate committee on internal economy removed paragraphs in its report that criticized Mike Duffy because he had reimbursed the amount he owed. It clear that all public funding for this institution must end.

In 2005, the current Prime Minister campaigned on a promise to reform the Senate, to make it the three Es, equal, elected and effective. He went on to table several bills on Senate reform on behalf of this so-called commitment from his government for change, yet the bills went nowhere. They never rose to the top of the priority list. Even further, the Prime Minister broke his promise not to appoint senators and in fact appointed a whopping 59 senators.

The Senate is a fundamentally undemocratic institution, used by both the Liberals and Conservatives to thank their friends, defeated candidates and donors. They are appointed not because of merit, but as a reward for loyal service to the party in power. The Prime Minister's so-called Senate reform is without a doubt, a complete failure. Like the Liberals, the Conservatives are only part of the problem.

It was not until February 1, that the Prime Minister referred the issue to the Supreme Court of Canada. The court will give its legal opinion on the processes to follow under the constitution to limit the terms of senators, elect senators, eliminate the requirements for senators to have a residence in the province that they represent and, of course, the abolishment of the Senate. The Supreme Court decision may take years to come, but Canadians want and Canadians deserve action today.

While the Conservatives and Liberals rise in their places to defend the status quo and their senators, the NDP is proud to stand up for Canadians and their tax dollars.

The Senate is outdated and fundamentally anti-democratic. We have senators who abuse the public purse. Also, that place is supposed to be the place of sober second thought. However, in fact, it is allowing partisan lines, as well as blocking legislation that is passed in the House of Commons a number of times, such as the NDP bill, Bill C-311, which would have ensured responsibility and action from Canada to prevent climate change. It passed the House of Commons, but the Senate stopped it.

Premiers, including Saskatchewan's Brad Wall, and many Canadians across the country, agree with us. It costs $92.5 million a year to run the Senate, over $90 million a year to cover the costs of salaries and travel for political organizers and people responsible for raising funds for the Liberals and the Conservatives. This is outrageous. The Senate is an archaic institution with appointed senators, some of whom, as we know, abuse their privileges and do not represent the interests or values of Canadians.

I know in my riding of Scarborough—Rouge River, this is a lot of money that could be put to much better use, yet it will take the annual taxes of over 8,000 average families to pay the Senate's tab. Senator Duffy will be collecting another $1.3 million in salary, while Patrick Brazeau will be collecting $7 million over the course of the remainder of his appointment.

There are many residents of Scarborough—Rouge River struggling to provide for themselves and their families. There are much more important uses for our taxpayer money. Youth unemployment in the GTA is double that of the national average. Where is the real job creation strategy? Canadians across the country are in need of affordable housing. Investments in housing are what Canadians are looking for. In my riding, greater investment for the crumbling infrastructure and investment in public transit services are needed. This $90 million could go very far in investment in public transit in Scarborough.

Neither the Conservatives, nor the Liberals, are taking this issue seriously.

On one hand, we have the Conservatives' so-called reform that is going nowhere. On the other hand, the Liberals are supporting the status quo. Fortunately—

[Terry David Mulligan]

It's fantastic. I'm heading to Edmonton on Friday and the first place I'll go is to my local wine store because, first of all, I see brands there that I would never see anywhere else. It's astonishing how robust the wine shops are in Alberta. I applaud them wholeheartedly. It's the way B.C. should be. I think we'll all get there at some point—maybe not Ontario. But the fact remains that it's a great example of what you can do with an industry. That's why I cannot believe the Alberta government is saying no, that they won't honour Bill C-311. It's stupefying. We still haven't come up with an answer as to why they have done that.

I would like to congratulate the restaurants in Montreal, by the way, who are pouring more and more B.C. wines. It's a great combination, really good wine and really good food.

[Terry David Mulligan, As an Individual]

Thank you so much for including me in this discussion.

I doubt I'll need 10 minutes.

My take on this is different from all the other folks you've heard from, except for Shirley-Ann. I'm not a corporate type of person, but I do have information that I think would be of interest to you.

I've been hosting Tasting Room Radio, a weekly one-hour food and wine-driven show that started in the Okanagan. It's heard province-wide in Alberta, throughout the Okanagan, and in Vancouver, Victoria, and Vancouver Island.

Not only do I conduct the interviews with the winemakers, growers, and principals of the wineries, but I also edit the interviews. As a result, I listen to them over and over again, shortening them down to a proper size. The information that comes from listening to their saying what they have to say is information that I want to impart to you today.

Two years ago, as a media observer, I attended a meeting at the very beginning of the Vancouver International Wine Festival. I was stunned when I listened to the conversations in the room. The top winemakers, small and large, along with some of the principals and owners, were all having the same conversation they'd had for years. They asked, "How do we get our wines across Canada, how do we work with the liquor boards, and how do we not live under the dark cloud that is the threat of the liquor boards?" This was simply because none of them could stand up and challenge the liquor boards across the country because their products would mysteriously disappear from the shelves.

I realized that they were in a bind, that they wanted to say something, and that they wanted to change the liquor laws that were written in 1928 during Prohibition. Because I had no affiliation with any winery, I stood up and I said, "I'll go".

Then along came the Banff Food and Wine Festival, and I went to the border. I wrote to the liquor control board offices in Victoria as well as to their headquarters in Edmonton and said, "This is what I'm doing and why". I had lunch with the RCMP—they bought—and then I went to the border. The only people who met me there were the media, God bless them. They got the story out and it started things rolling. Shirley-Ann then picked up on it and we ended down the way, in my small part, with Bill C-311.

To my astonishment, after the bill had been unanimously passed in both houses, Alberta refused to honour it. The Liberal B.C. government said, "We'd love to see Ontario wines in British Columbia", and they opened the doors. Ontario said, "Nah, we don't want to see B.C. wines here on a regular basis; we're not quite there yet". It just caused a lot of anger.

Strangely enough, Alberta is the best customer that we have outside of British Columbia. We buy a lot of our own wines. My show is heard in Alberta and I'm constantly getting feedback from Alberta customers and clients saying, "Why are we always being put in the situation where we don't know if we're breaking the law by bringing wines from the Okanagan back into Alberta". It's ironic because we see Tourism of B.C. saying, "Yeah, come on in, this is wine country, come on in", and then when customers get here, they say, "But, you can't take your wines back".

If you can help in any small way, to work with your provincial counterparts to clear up these hurdles, you will have done a great thing for this country.

We have bottlenecks all over the place; look no further than Alberta and Ontario. One or two things that would help would be to embrace the idea of having free trade within Canada, not just with the United Stated, and, additionally, to open up wine sales to the Internet, which everybody is talking about.

For every small winery out there, the wineries that make 3,000 to 5,000 cases of wine, every dollar is accounted for. They need one wine to pay the bills while the other wines are progressing. Usually it's a Sauvignon Blanc or a Pinot Gris, or whatever, but that's the wine they need help with. If we could recognize that, they could pay their bills while all the reds are growing. It would be a wonderful thing if we could target one wine within the portfolio of a small winery and say we're going to support that wine as hard as we can to help the winery pay the bills while it gets the rest of the bottles ready for market.

On the Canadian embassy, I just want to say that Janet Dorozynski is a wonderful supporter of the wine industry, and I applaud her work with the embassies across the world.

Also, on Bill C-311, let's honour it as best we can. That's what it was written for.

I was going to say that no one since 1928 has been charged under the Importation of Intoxicating Liquors Act, but there was one poor schmuck who tried to come across the U.S.-Canada border many years ago. But the threat is always there. The threat is always over top of the wineries, that “We will charge you; we will make your life very uncomfortable”. The liquor boards are seen as bullies. I wish I could say nicer things about them, but they don't like the spotlight; not now and not two years ago.

I'm far more interested in your questions that you have for us here, and that's why I came today.

Thank you.

[Shirley-Ann George]

Unfortunately, Bill C-311 contains the following phrase: “in quantities and as permitted by the laws of the latter province”. So it affects the receiving provinces. Unfortunately, we were not able to convince Parliament to take that out and insist that the province allow reasonable quantities.

So unless Parliament is willing to have some discussions on amending the amendment, if the provinces won't work within the spirit of the law, which you might revisit, there isn't another piece of legislation we're aware of besides the IILA under which we would be able to move forward.

[Shirley-Ann George, President, Alliance of Canadian Wine Consumers]

Thank you.

Good morning, and thank you for the invitation to be here today.

The Alliance of Canadian Wine Consumers, better known as FreeMyGrapes, is a grassroots volunteer organization. Our goal is to make it legal to buy and ship Canadian wine across provincial borders for personal use. Today, I'll provide you with a brief update of what has happened since Bill C-311, the amendment to the IILA , was passed last year, as well as what else still needs to be done.

First, a big thank you to your colleague Dan Albas, the MP for Okanagan—Coquihalla. We are very proud to have been associated with Dan in the unanimous support he was able to garner from Parliament and from Senate. And unanimous support these days on the Hill is almost an oxymoron. We do appreciate all the efforts from both sides, from all the parties, in support of Bill C-311.

Why do we want interprovincial wine shipments? Let's start with the reality that there is overwhelming support from Canadians for this notion. In 2012, Harris/Decima research showed that, nationally, 78% of people said that these interprovincial barriers are unreasonable.

This is largely a North American problem. Imagine telling somebody in Paris they couldn't order a case of wine from Burgundy. If you told Italians they couldn't order their own product and that they could indeed incur a fine of up to $100,000 and jail time for ordering Italian wine, they would look at you as if you had grown a second head. This is the reality in Canada. It's largely going away in the United States. Today, 40 U.S. states are open, with Montana coming on board last week.

Our wineries can ship to 90% of the U.S. market, and small wineries that make up only 5% of U.S. production have been able to garner 50% of the direct-to-consumer market. This is an example where you would think that Canadian governments would want to support Canadian small businesses, especially small rural businesses, and when they had the overwhelming support of Canadians to do so, they would be able to move forward.

You may have some witnesses who will come in and say that provinces can't do this because it's unaffordable. We look at the U.S. numbers and respond that's nonsense. In the U.S., less than 1% of U.S.-produced wine is shipped across state lines. It is indeed a very affordable measure.

Bill C-311 passed on June 28 last year, almost a year ago. What has happened? Manitoba, a province with very little wine production, immediately said its borders were open. Kudos to Manitoba. Within two weeks, B.C. announced its borders were also open, and it continues to be the most forward-looking. It has in fact named a wine envoy, whose job it is to go to the other provinces and try to get them to open up their borders for B.C. wine.

Nova Scotia passed enabling legislation on December 6, and the minister's comments on this legislation are very encouraging, but the officials in the liquor boards prior to the minister's comments were not very encouraging. So we need to wait and see what the regulation actually says, but Nova Scotia is marked as hopeful.

Recent changes that allow one case of wine per trip on your person—so it has to physically accompany you—have been enabled in P.E.I. and Saskatchewan. If you live in P.E.I., you probably make it out to B.C. once or twice in your lifetime, on average. It's probably during the summer when you're not about to put a case of wine in your trunk and drive it across Saskatchewan in the heat of the summer. So this little measure that has been passed is not something that we see as progress at all.

Both provinces have also said they're not going to do any more, although neither one has come up with any answer to the question about how in the world they're going to enforce it.

Unfortunately, Alberta gets the booby prize. According to reports by outside counsel, Alberta law clearly states it is legal to ship into the province. Section 89 of their law says that “an adult may import from another province liquor for the adult's personal use or consumption”. It can't get more clear than that, but the Alberta government's position is that “import” means only on your person. So in free-enterprise, free-trade Alberta, we face a huge disappointment, and more work is needed there.

The Ontario law is actually silent on the importation or possession of wine from another province, but the LCBO's position is that you can only bring in one case on your person per trip.

There was a private member's bill by MPP Rob Milligan in 2012, but we lost that when the legislature was prorogued. He has that said he's going to reintroduce the bill, but unfortunately this Ontario government has a very poor record on opposition bills ever even making it to committee, never mind into law.

So while Ontario is clearly benefiting by shipping their wine to other provinces, they haven't opened their borders. To say that's ridiculous is an understatement.

In Quebec a petition was recently tabled in the legislature with over 3,000 signatures supporting people's ability to buy wine across provincial borders. Quebec has yet to respond to this petition, but the government has tabled enabling legislation, which if they wished, could include regulation that would allow reasonable quantities of wine to be shipped directly from a winery to Quebeckers. Unfortunately, we've been told that the intent of this legislation and the regulation that's currently being written is only to allow it on your person. So there's a real opportunity for movement in Quebec, but the effort needs to be considerable and quick.

So clearly the job is not done, although Canadians truly believed that with the passage of Bill C-311, the work was done. A significant number of them are ordering wine across provincial borders, and wineries—because it's now a possession issue and no longer a shipment issue—are largely willing to ship across provincial borders. The reality is that it's not legal and that there is a significant risk to anybody who does so.

We will continue to make our efforts, but we need some help with this huge loophole that is being used by too many provinces.

First, on behalf of the thousands, and thousands, and thousands of Canadian wine-lovers, we encourage you to continue Parliament's good work in tearing down these obsolete, ineffective, Prohibition-era, job-killing, interprovincial wine barriers.

Second, every time you see one of your provincial counterparts—and I really do encourage this for those members who come from Alberta—ask them to respond to the desire of 82% of Canadians who believe that we should be able to access wine through online purchasing. It is bizarre when you think about it that if you're an Albertan, you can go into B.C., literally load up a tractor-trailer full of wine, get in the passenger seat, drive across the Alberta border, and as long as it's for your personal consumption, that's perfectly legal. But if you order one bottle of wine and have it delivered to your home, you've broken the law.

Third, we encourage you to use all possible vehicles to promote this issue. There is a Conservative meeting happening actually on June 28, the one-year anniversary of the passage of Bill C-311. We encourage you to make sure it is filled with Canadian wine from outside the province, and that you make this public. We encourage you to find all federal-provincial opportunities to drive home the message that it is time to free our grapes. It is only together, by working in concert with consumers, the industry, and parliamentarians, that we'll finish the job.

Thank you.