Evidence of meeting #50 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was wines.
A recording is available from Parliament.
5:05 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Do you believe that there would be any problem if we had the 100% Canadian wine amendment in terms of trade?
5:05 p.m.
President and Chief Executive Officer, Canadian Vintners Association
There is a discussion of 100% Canadian wine. The 100% Canadian wines typically sell at a higher price point than Canadian blended wine products, to which I believe my colleagues from Nova Scotia are referring.
Blended wine products typically sell below $10 per bottle. The transportation charges for a bottle of wine are $3-$4. The consumer group that you're looking at that is interested in purchasing wine from a winery in another province are typically connoisseurs and know something about wine. They're looking at wines that are about $15 or higher. I don't think the 100% Canadian wines are what we're talking about, but I don't believe they have to be mentioned in the legislation.
5:05 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
My question was more regarding trade agreements and the fact that it was transferred from one.... If we put in the amendment that it's 100% Canadian wine that goes from one province to another one, is there any trade agreement that we would go against?
5:05 p.m.
President and Chief Executive Officer, Canadian Vintners Association
No, because you still have to meet national treatment obligations for any foreign wines coming into the country.
5:05 p.m.
Executive Director, Canadian Association of Liquor Jurisdictions
I'd just like to comment that at a large Canadian wine symposium in Niagara just last month, international trade experts said that direct sales could very likely result in a trade challenge and the loss of numerous existing advantages to the Canadian wine industry.
5:05 p.m.
NDP
Hoang Mai NDP Brossard—La Prairie, QC
Ms. Martinez raised the point of the 18-year-old. Is there someone who can counter that argument and say that it will be covered, that we won't have any problems with minors being able to buy wine online?
5:05 p.m.
Conservative
The Chair Conservative James Rajotte
Would someone like to respond to that? Mr. Paszkowski, would you like to comment?
5:05 p.m.
President and Chief Executive Officer, Canadian Vintners Association
There are currently examples within Ontario and British Columbia, where for the past ten years you have been able to order wine online within the province. As an Ontario consumer, you can order wine directly from a winery, and there haven't been any issues.
The United States has a long list of measures in place to ensure that there is no underage consumption, including the requirement for the courier to get an adult signature and for the boxes to be labelled as containing alcohol. Also, in the United States significant studies have been done to show that wine is not the choice beverage for underage consumers, nor will most teenagers wait a week or two to have delivery when their parents aren't home to receive that case of wine.
If you take a look at the price elasticity of wine, you see that a 10% increase in price to youth would switch their consumption of wine down by about 18%. There isn't an incentive there.
5:10 p.m.
Conservative
The Chair Conservative James Rajotte
Okay, thank you.
Unfortunately, we are over time, Ms. Martinez, but maybe I'll give you a chance to respond in a later round.
We'll go to Ms. McLeod, please.
5:10 p.m.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Thank you, Mr. Chair.
I have one very quick question, and then I have a longer question. My first question is to Mr. Paszkowski.
Do you have any quick comments on including the 100% Canadian requirement and on the free trade issue that's been discussed?
5:10 p.m.
President and Chief Executive Officer, Canadian Vintners Association
I don't think it's necessary to put the 100% Canadian requirement into the bill, primarily because the wines we're talking about, the ones that will participate in a direct-to-consumer delivery model, would be 100% Canadian wines, based on the price points at which they sell.
5:10 p.m.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Thank you.
I'm going to ask Mr. Dunning and Mr. Paszkowski to respond to my next question.
We've heard that wine is a bit of a story. My colleague from Manitoba is biking the Kettle Valley Railway trail. She has a credit card, but of course not a lot of capacity to take bottles of wine with her. If she runs across a particular wine in one of the vineyards that's $16 a bottle, I would like you to track through how she gets it to her house with the current system in place. Mr. Dunning can talk about that.
What could be done under this new system if we have provincial agreements that buy into it? Can you follow that $16 bottle of wine, plus added fees? What process is she going to have to follow to get it back to her house currently, and then with this legislation?
Who wants to go first?
5:10 p.m.
Executive Director, Canadian Association of Liquor Jurisdictions
First, she could put it in her suitcase and bring it home.
5:10 p.m.
Conservative
5:10 p.m.
Executive Director, Canadian Association of Liquor Jurisdictions
She's on a bicycle. Okay—
5:10 p.m.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
—and with a credit card. She would like to buy six bottles of this particular—
5:10 p.m.
Executive Director, Canadian Association of Liquor Jurisdictions
Currently, the only way she could do it would be to write down the name of the product, and then when she gets back to her home province, order it through the liquor board and have it delivered to her house.
5:10 p.m.
Executive Director, Canadian Association of Liquor Jurisdictions
Well, we're actually moving to case weights, and a lot of bottles are now packed in six-bottle cartons, as they are in Europe.
5:10 p.m.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Okay, so she would just have to write it down and go home.
5:10 p.m.
Executive Director, Canadian Association of Liquor Jurisdictions
She'd go home and order it, yes.
5:10 p.m.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
What fees would be added to the $16 as it goes through this process?
5:10 p.m.
Executive Director, Canadian Association of Liquor Jurisdictions
The liquor board would order it from the winery at their wholesale price, so the $16 wouldn't be $16; it would probably be less than that. Then the liquor board would add their markups on top of that. It could bring it back to the $16 level or slightly more, depending on the cost of getting that product back across the country. Because liquor boards, depending on the province she's in, order a vast amount of wines, the wines would be consolidated within the existing shipment and probably wouldn't cost her that much more.
5:10 p.m.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Okay, and then she'd pay Manitoba tax, in her case.
Mr. Paszkowski, could you talk about how things would change on her bike trip?
5:10 p.m.
President and Chief Executive Officer, Canadian Vintners Association
The way things would change on her bike trip is that she'd arrive at the winery, identify the wine she wanted, purchase it, and then ask the winery to deliver it to her home. The job would be done, and the winery would receive full retail price for that wine, as opposed to a lower f.o.b. price that would apply if she went back home and ordered it through her home liquor board with all the markups attached to it, plus the transportation charges. In other words, it would be retail price plus transportation charges to get it home, and it would be at her home within a couple of days.