Agriculture Committee on April 28th, 2015

[The Chair, Conservative, Bev Shipley]

Could we have a short answer, please?

[Marc Godin]

I will try to give you an example —

[The Chair, Conservative, Bev Shipley]

I think what we might do is allow you to have the time, and we'll come back to another question.

[Marc Godin]

Thank you. I appreciate that.

[The Chair, Conservative, Bev Shipley]

Now I'll go to Mr. Keddy for five minutes. Because we have a video conference, please identify where the questions are going.

Thank you very much.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman.

I welcome our witnesses.

Mr. Godin, you talked about your relationship with the microbreweries and the CFIA. You had some concerns that you've flagged on the present rules. I think your statement was that you didn't want to see the rules change without consultation. Has that been a difficulty in the past?

Does your association of microbreweries not have some regular dialogue once a year or sit down with the regulatory board, provincial or federal, and try to see if there are changes coming or being gazetted?

[Marc Godin]

I believe that we haven't been invited, or involved, or proactive in doing this enough.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

If regulatory changes are coming your way, are they federal changes or provincial ones? It's incumbent upon governments at every level to be proactive when their regulatory changes are being made and to make sure that industry—in this case, the microbreweries—understands that these changes are coming and the reasons why they're being implemented.

[Marc Godin]

Yes. Currently the review of the beer definition was initiated by

the Canadian Food Inspection Agency

They are proposing a redefinition, but we are realizing that different provinces and different players in the industry wish to have a different definition and already have different definitions here and there in their legislation. We're concerned that if we don't take the time to sit down with all the players to agree on a common definition, it might create some problems in putting the policies and the regulations into practice—

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Okay.

[Marc Godin]

—especially if you start doing interprovincial trade.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Yes, absolutely: one regulatory regime and one definition for every product.

At Halloween, for example, a lot of microbreweries will make a pumpkin beer. It is a bit sweeter and it has a bit of a different taste. It's still beer and it's still made like beer, but it has some different ingredients in it. I want to zero in on what your main concern is. If you're making that product and you want to ship that product to Toronto, let's say, any regulatory changes and the way it's treated in Ontario could be slightly different from how Quebec does it, and you would not be able to ship that beer into Ontario.

I'm not saying that's the issue, but maybe there are issues like that. It's helpful for us if you can give us specific examples of cases you've already had that prevent interprovincial trade.

[Marc Godin]

To be honest with you, I am not prepared to go into the details. We are in the process of documenting our own position and our own recommendations regarding this.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

That's perfect.

[Marc Godin]

Unfortunately, today I am not yet capable of discussing the details.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

That is not a problem, Mr. Godin. If you could follow up, that would be helpful to the committee.

[Marc Godin]

Yes, we will.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Do I have a little time left?

[The Chair, Conservative, Bev Shipley]

Make it very short.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

I wanted to ask the grape producers about this.

You folks mention in your submission the excise tax on blended wines. Apparently, if it's an appellation, if it's 100% Ontario wine, you can avoid the excise tax. If it's a blended wine and you have some grapes in there from other areas—I am assuming other areas in Canada, or perhaps the States—you can't avoid the excise tax. Do they not have a formula that would allow you to work that on a percentage basis?

[Patrick Gedge]

No. Unfortunately, that does not exist. When the changes were made years ago, the excise tax exemption applied only to bottles of wine that were made from 100% Canadian grapes. It did not take into account the fact that you have Canadian grapes going into blended wine.

Our objective is really simple. It's to treat every Canadian grape in the same manner from an excise tax basis, so that regardless of whether it goes into a 100% product or is part of a blended wine, the Canadian grapes get exempted from excise tax. That way, you are basically incentivizing the entire industry to continue to buy Canadian and, in our case, Ontario grapes.

[The Chair, Conservative, Bev Shipley]

Thank you very much.

Thank you, Mr. Keddy.

I will go to Mr. Eyking for five minutes, please.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Mr. Chair.

Thank you, guests, for coming.

My first question is for the wine producers.

When you're in Europe, whether you're in the Bordeaux area or the Rhine River areas, you see way more loyalty with regard to people drinking their local wines. There is more knowledge and there is more loyalty. You see it in all the restaurants. You see it everywhere.

You mentioned that big gap: that we could be selling local wines in our regions. Look at the Niagara area. It's only 100 kilometres or so away from Toronto. You would think that if we were doing it right, that whole area, the Toronto area, would be drinking half the Niagara wine, but that's not the case. How do you get that loyalty, whether it is in restaurants or in markets? How do you make that happen?

[Patrick Gedge]

It's a great question. I don't think there's one silver bullet in order to achieve that. I think it's a whole mixture of a range of activities.

Over the last number of years, we have certainly enhanced all of our marketing activities within Ontario, B.C., and even Nova Scotia. You have to keep top of mind in front of consumers the type and quality of wine that we are able to produce within this country. Often what happens, frankly, in any consumer marketing, is that people are operating with perceptions from 10, 15, or 20 years ago in terms of what you are able to produce.

We find that the best way to ultimately sell more Ontario wine is to get people who haven't tasted it, or who have tasted it a long time ago, to taste it now, and then we'll start to work on the conversion. Out of personal experience, they will start to appreciate it and, as consumers, start to demand more Ontario wine or Canadian wine. The result is that this demand will then start to affect what restaurants carry, as an example.

Del?

[Del Rollo]

There's one other point I would mention, because we are competing with the rest of the world. I'll use the European Union as an example. They have a budget of over a billion dollars to market their wines around the world. Canada has a target on it—specifically Ontario—as one of the best markets to sell wine to.

When we look at our industry and what we're spending to market our wine, in comparison to what the big foreign companies are spending in coming in from France, from Italy, and from the European Union as one of the largest areas, it's a real challenge for us to compete from a domestic wine standpoint.