Thank you, Mr. Chair.
Some 83 years ago, during the Prohibition era, the Importation of Intoxicating Liquors Act, known as the IILA, was passed, making it illegal for everyday citizens to transport or ship wine across provincial boundaries. It is for all intents and purposes an interprovincial trade barrier, meaning a winery in Quebec cannot legally sell a bottle of wine to a customer in Alberta.
Now, here's where it gets more redundant. That same Quebec winery that cannot legally send a bottle of wine to Alberta can send that same bottle of wine to a customer in Texas. Many small Canadian wineries can more easily access markets outside of Canada than they can within our own great country.
Canadians have proven that they can produce some of the best wines in the world, yet they cannot sell that wine directly to consumers in other Canadian provinces. We as members of Parliament have the opportunity to work together and change this by supporting Bill C-311.
Let's imagine if cars built in Ontario could not be sold in British Columbia. What if prize Nova Scotia lobster could not be sent directly to households across Canada? This is the reality for our small Canadian wine producers.
The wine industry has been battling this unjust Prohibition-era legislation for many years. Now it's time to open up the Canadian marketplace to support the hard-working families who run small wineries in provinces like Quebec, Nova Scotia, Ontario, and British Columbia.
How do we best eliminate the 80-year-old trade barrier, put an end to wine prohibition in Canada, and open up the Canadian marketplace? I would like to share the intent and direction of my proposed amendment to the IILA legislation. I would also like to add that I worked very closely with Minister Shea, parliamentary secretary Cathy McLeod, and their staff for the duration of this process. I would like to publicly thank them for their efforts and support in helping move this bill forward.
Essentially, Bill C-311 proposes an amendment that would allow private citizens to directly transport, or cause to be transported, wine that is purchased from one province to another province, provided it is for personal use and the personal exemption policy of the latter province allows it.
Let's be clear on a few points. Yes, this amendment supports Canadians being able to directly purchase wine online from a winery in British Columbia, Nova Scotia, Ontario, or Quebec and have that wine shipped back to a province such as Alberta. This action would no longer be in contravention of the IILA legislation.
Let's also be clear that this amendment will ultimately clarify that it is indeed the provinces that can set up their own personal importation policy as they see fit. In essence, my amendment proposes to take Ottawa and this trade barrier out of the way and let the provinces set policy that they feel is appropriate.
There are some interests that would like to propose an amendment to the language of my bill, an amendment that in my view would potentially be more restrictive on the ability of the provinces to set importation policy. An example is inserting the word “reasonable”. Now, who would decide “reasonable”, and what mechanism is there to address that definition?
For the record, I do not support efforts to amend the language of Bill C-311 in any way that might restrict the ability of the provinces to set their own personal importation policy. As much as we all support interprovincial trade, we must also recognize that liquor distribution is a provincial responsibility, and provinces and territories must be free to set their policies accordingly.
Again, I point out that ultimately my goal here is to remove the federal government and the IILA as a trade barrier. I shall also note that some provinces have already taken a leadership role in setting their own personal importation policy. In fact, I would suspect that you will hear from the Canadian Association of Liquor Jurisdictions, which will mention this as one of the reasons they are not likely to support the amendment.
However, provincial policy should not conflict with federal legislation. The fact that a federal law exists to prevent this practice does raise the obvious question of a potential conflict with provincial policy. In other words, how can a province essentially say it's okay to personally import wine while the IILA legislation is clear that this is a criminal act? That, of course, leads to another reason that this amendment in Bill C-311 is badly needed.
I would also add that not all provinces have a personal importation policy. In fact, one province has stated that it will not consider such a policy until the IILA legislation is amended, which is precisely what we are trying to do here.
The final discussion I expect you to hear is one of revenue. Will the amendment create a loss of revenue for liquor distribution monopolies?
I have a few thoughts on the subject. In my riding, many of the smaller wineries do not sell through provincial liquor distribution models. They simply do not have the volume and cannot afford the hefty fees. One small winery owner tells me that it costs him roughly 60% to sell through the liquor distribution branch, and he simply does not have the volume to absorb those kinds of costs. To maximize his income, he depends on the ability to sell directly. Unfortunately, for many of the vacationing Albertans who visit his winery every year, even though Alberta does have a consumer-friendly personal importation policy, IILA still makes it illegal for wine to be taken home by his customers, and shipping remains illegal.
I'd like to take a moment and illustrate another reason that Bill C-311 is not only good for the wine industry but also for the shipping industry. Today, major shipping companies will not ship wine precisely because of the IILA. I have had a few major shipping companies that wanted to be here in person to show their support for Bill C-311 and illustrate how this will be a positive economic policy for the Canadian shipping industry.
I'll get back to my small winery example. In this case, many small wineries currently do not sell through the provincial liquor distribution system. It is difficult to suggest or assess that there would be a loss of revenue, as many of these wineries are already engaged in direct sales. Bill C-311 simply looks to rightfully expand that marketplace across Canada.
We must also recognize that when wine is sold, it is fully subject to HST or PST and GST, depending on the jurisdiction. In other words, increased wine sales resulting from Bill C-311 would continue to benefit government revenues, just not solely directly through liquor distribution monopolies. I'd also like to add that there is GST on shipping as well, so any increased shipping activity as a result of this amendment would also increase GST revenues to both levels of government, not to mention all of the economic spinoffs that go along with it.
Who pays for all of this? Well, it is the consumer. That is also an important point to consider in this discussion. Wine as a commodity is fragile and heavy. As a result, this will be very costly to ship. Shipping an individual bottle can range upwards of $20, while shipping a case of wine can be in the $50 to $70 range. Why do I mention that? Ultimately, there is no cost savings to consumers in directly purchasing out-of-province wine. Consumers are not in support of this bill as part of an effort to avoid purchasing from a government-run liquor store; this bill is about consumer choice and opening up the market to small Canadian producers so that they can sell to Canadians.
Over the past six months, I have heard support from all across Canada, and I know that many of you have likely heard from your constituents on this bill as well. This is a small but important step for a Canadian industry that provides jobs and supports our local economies. In my region, the spinoff industries are considerable. I know that both Nova Scotia and Quebec are also emerging wine regions, while Ontario has become Canada's largest producer. We have an opportunity to take a small step that will eliminate a Prohibition-era trade barrier and legitimately help an industry grow and prosper.
I appreciate the time the committee will spend reviewing this bill. I certainly welcome your questions or comments.
Thank you, Mr. Chair, for your consideration today.
