We both are. We'll start with me.
Thank you very much, Mr. Chairman. The Winery and Grower Alliance of Ontario would like to thank the Standing Committee on Agriculture and Agri-Food for the opportunity today to speak about the wine and grape industry in Canada and specifically in Ontario.
My name is Patrick Gedge, and I am the president and CEO of the Winery & Grower Alliance of Ontario, or WGAO. I am accompanied by Murray Marshall, who is the president and CEO of Diamond Estates Wines & Spirits Ltd. and a director of the WGAO.
As a background to our organization, the WGAO is the leading industry trade association in Ontario, with its members representing over 85% of the wine produced in the province. You may know us more by brand names such as Jackson-Triggs, Trius, Inniskillin, Peller Estates, Colio Estate Wines, Magnotta Winery, Lakeview Cellars, and others.
Our members include both wineries and grape growers in the province, as we believe the continued success of the industry is best guaranteed by both groups working seamlessly together. In fact, to demonstrate that interdependence, our wineries purchase over 85% of the wine grape crop produced each year by independent growers in Ontario.
This presentation is extremely timely. An independent study has just been unveiled that sums up the economic impact of the industry in Canada, and in the provinces of Ontario, British Columbia, Quebec, and Nova Scotia, the major domestic wine-producing regions. The study was carried out by Frank, Rimerman and Company, which has conducted similar research studies for the U.S. industry as a whole, and some 20 individual states.
Highlights of the analysis include:
Canadian wine production has an annual national economic impact of $6.8 billion. Specifically, for every bottle of wine produced in Canada, there is $31 of domestic economic impact generated in the country. For Ontario, the total impact is $3.3 billion, and $40 per bottle.
The wine and grape industry is responsible for more than 31,000 jobs in Canada, and in Ontario, 14,000 jobs.
Wine-related tourism welcomes more than three million visitors each year, generating more than $1.2 billion annually in tourism revenue and employment. In Ontario, that represents 1.9 million visitors and some $644 million.
Finally, and not least, the wine industry generates some $1.2 billion in federal and provincial tax revenue and liquor board markups. In Ontario, that represents some $602 million.
In the past, quite naturally, we've often been thought of as a fairly small, quaint, and local industry. Today the industry is a significant and growing economic contributor—nationally, regionally, and locally—as evidenced by the results of this study. The value chain in our industry is one of the most interdependent of any sector. The foundation of our industry rests with highly productive and market-driven grape growers who produce high-quality grapes for all price points in the market. They work very closely with the wineries and winemakers who purchase the grapes and ensure that we produce bottles of quality wine capable of competing successfully against imports. We have, for example, premium Vintners Quality Alliance, VQA, wines over $10.00 and value-based International Canadian Blend, ICB, wines under $10.00.
In addition to being highly integrated, our industry has a significant impact in multiple sectors: agriculture, food processing, manufacturing—wineries are in fact in the manufacturing category—services, and, not least, tourism. Our economic reach supports educational and commercial research institutions like Brock University in St. Catharines, the Cool Climate Oenology and Viticulture Institute, and Niagara College Canada. The tourism component is significant, complementing world famous Niagara Falls, and it creates local employment through accommodations, restaurants, and services.
During the past number of years we have seen many sectors in the economy suffer. We should recognize and celebrate the fact that the Canadian wine and grape industry continues to be more and more successful each year in terms of farm gate value, manufacturing productivity, product innovation, and sales growth.
We are helping grow the wine category in Canada. In 1995, wine represented 18.8% of all alcoholic sales in Canada, and this grew to 30.2% in 2011, an increase of 11.4%. During the same time, beer and spirits dropped 8.1% and 3.4% respectively. The growth potential of Canadian wine products and their economic impact continues to be enormous.
In spite of this success, the wine and grape industry operates on very thin margins and is highly capital intensive at both the farm and winery level. We need to ensure that the industry is sustainable and fully competitive over the long term.
With that, let me pass it over to Murray Marshall.