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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.

On the agenda

MPs speaking

Also speaking

Hanspeter Stutz  As an Individual
Ivonne Martinez  President, Alberta Liquor Store Association
Rowland Dunning  Executive Director, Canadian Association of Liquor Jurisdictions
Dan Paszkowski  President and Chief Executive Officer, Canadian Vintners Association
Harry McWatters  Time Estate Winery, Vintage Consulting Group Inc.
Janice Ruddock  Managing Director, Winery Association of Nova Scotia

4:25 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. McWatters.

We'll hear now from Ms. Ruddock, please.

March 27th, 2012 / 4:25 p.m.

Janice Ruddock Managing Director, Winery Association of Nova Scotia

Hello. My name is Janice Ruddock and I am the managing director of the Winery Association of Nova Scotia.

I want to thank the Standing Committee on Finance for the opportunity to attend this committee hearing in reference to Bill C-311, the bill to amend the Importation of Intoxicating Liquors Act.

Please allow me just a few minutes to introduce the wine industry in Nova Scotia. We have a 2020 vision: that in 2020 we will have 20 wineries and over 1,000 acres of grapes planted.

Currently there are 14 wineries, but I'm going to tell you that they have enough enthusiasm for 140 wineries. There are enormous dreams and plans in the Nova Scotia wine industry, and the core part of my job is finding the support to help these dreams come to life by promoting Nova Scotia wines wherever possible. Nova Scotians have one of the lowest per capita consumptions of wine in Canada, so obviously the opportunity to move into other regions of Canada is a very attractive possibility for the growth of the Nova Scotia wine industry.

The majority of our wineries are located in the scenic Annapolis Valley, which is one hour from Halifax and a tourist destination.

With a population of only 945,000—I'm not sure where Hanspeter got the other 55,000—who historically are not wine drinkers, we have to spend a considerable amount of resources just on educating people about wine—not Nova Scotia wine, but wine in general.

Our Nova Scotia signature grape is L'Acadie Blanc, and most wineries in Nova Scotia will produce a L'Acadie Blanc wine, which is the most wonderful accompaniment to our delicious seafood. If you want to, as Scott has mentioned, you will see that this evening. Nova Scotia is being recognized for its high-quality sparkling wines, plus our off-dry whites. We also make red wines and icewines as well.

With current 100% Nova Scotia wine not even filling the shelves of the 105 Nova Scotia Liquor Corporation stores, today our key priorities remain simply to increase the production of 100% Nova Scotia wines and to educate the consumers on Nova Scotia wines. We like to say, “Created under the same earth, sea, and sky, the wines and seafood of Nova Scotia are, quite simply, a match made in Nova Scotia heaven”. That is why our symbol is a wineglass and a lobster claw. This symbol is put on our wine that is produced with only 100% Nova Scotia grapes.

Nova Scotia has great wines. We've been recognized with international accolades. For example, Prestige Brut, from L'Acadie Vineyards, was the only entry from North America to win a medal in the ninth international competition for the world's best sparkling wines.

Nova Scotia wines are very hard to duplicate. They add diversity and uniqueness to the Canadian wine industry, and aren't diversity and uniqueness what Canada is all about?

Therefore, the ability to ship our unique wines across Canada will give Canadian consumers an opportunity to sample truly unique and truly Nova Scotian wines. This year, we are formally launching a Nova Scotia signature wine called Tidal Bay, which again is unique to Nova Scotia. Only 14 months ago, Nova Scotia saw our own wine regulations come into effect. We have been asked whether it's VQA Nova Scotia; it is not, at this point in time, but we certainly are investigating the opportunity.

More to the point on Bill C-311, as you can appreciate, as a growing wine industry in a province of 945,000, the Nova Scotia wine industry is always interested in developing new channels of distribution for our products. Therefore, the Nova Scotia wine industry would support the opportunity for individuals to order or transport Nova Scotia wines across Canadian provincial boundaries.

We have only one request, though—and keep in mind that I am here on behalf of the Nova Scotia wine industry—which is that Bill C-311 reflect or be adapted to incorporate “100% Canadian” in front of the word “wine”. The fledgling 100% Canadian wine industry lacks the awareness that imported wines to Canada have among wine drinkers. Imported wines to Canada increased by 8.8% for the 10-year period from 1996 to 2006. We are concerned that without the definition of “100% Canadian” in front of the word “wine” in Bill C-311, there will be an opportunity for wines of all countries to be moved across provincial borders.

Nova Scotians, being price-sensitive shoppers, will have the opportunity to order imported wines that are under a different business model from our Canadian wines, and there is also a high awareness of the country of origin among our fledgling wine drinkers. No doubt Nova Scotia wine consumers would be thrilled with this opportunity.

4:30 p.m.

Conservative

The Chair Conservative James Rajotte

Ms. Ruddock, could you conclude? You are over time.

4:30 p.m.

Managing Director, Winery Association of Nova Scotia

Janice Ruddock

I'll be really quick.

I want the committee to remember what my job is today. It's to speak on behalf of the Nova Scotia wine industry; it is not to discuss free trade agreements or the ramifications of using protected language in our bills. That's the key point. I know we're not able to put “100% Canadian” on it, but that is what we request.

To summarize, Bill C-311 is a step towards having more Canadians enjoy more Canadian wine if the spirit and the wording of the bill is to support the Canadian wine industry. We, as the Nova Scotia wine industry, are trusting it is.

Thank you for the opportunity, and I apologize; I just get so passionate about our Nova Scotia wines.

4:35 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you very much for your presentation, and for your passion.

We will start members' questions with Mr. Julian, please.

4:35 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

I don't know about you, Mr. Chair, but all this talk of fine quality Canadian wines is making me mighty thirsty.

It's a good thing you don't have samples of your product here today.

I'll be splitting my time with Mr. Chisholm. I thank all the witnesses for coming here today.

I'd like to direct two questions to Ms. Martinez, Mr. Dunning, and Mr. Paszkowski. The first is on the issue of sales that are already occurring.

Mr. Dunning, you mentioned that currently Canadians can ship directly to their homes through their provincial liquor boards. Could you give us a sense of the extent to which that's happening now? What percentage of overall sales are involved?

The second question is around the issue of trade that's been flagged in a number of presentations. In the United States, they're bound by the same trade agreements that we've signed. We have 39 or 40 American states that now have similar legislation in place. When the same thing is happening in the United States, to your knowledge, has that triggered any sorts of trade challenges?

4:35 p.m.

Executive Director, Canadian Association of Liquor Jurisdictions

Rowland Dunning

I can give you an example from Ontario on how the private ordering system works. They have a program they're rolling out in all of their stores for customers and consumers to order through the private ordering program. Last year alone, I know they had 240 private orders totalling 8,300 cases, and I believe the value of that was something close to $300 million or more.

4:35 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

What percentage of sales overall would that be in Ontario?

4:35 p.m.

Executive Director, Canadian Association of Liquor Jurisdictions

Rowland Dunning

I don't have a direct answer to that, but I do have someone in the room from Ontario who might have those specific numbers.

4:35 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Perhaps you could give it to committee later on, if you have a chance.

4:35 p.m.

Executive Director, Canadian Association of Liquor Jurisdictions

Rowland Dunning

Sure. I can do that.

4:35 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Next was the issue of trade challenges.

4:35 p.m.

Executive Director, Canadian Association of Liquor Jurisdictions

Rowland Dunning

I'm not aware of any trade challenges into the U.S. market. Going back into the eighties, when I used to work at the LCBO and was part of the trade discussions, the EU, for many, many years, seemed to focus a lot more on Canada for some reason. We're a small market compared to the U.S., but for years the U.S. wasn't really dominated by any significant amount of wines from Italy or France, except for maybe the premium end. More recently, they have—

4:35 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

I'm sorry; I'm going to interrupt you because I want Ms. Martinez and Mr. Paszkowski to answer that question as well.

4:35 p.m.

President, Alberta Liquor Store Association

Ivonne Martinez

I'm sorry. On the trade issue?

4:35 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Yes.

4:35 p.m.

President, Alberta Liquor Store Association

Ivonne Martinez

Again, I'm not aware of any issue. In the 1980s case, Canada actually lost the EU case, and we feel this would add to it and possibly cause other challenges to come forward.

4:35 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

However, you're not aware of any challenges with similar legislation that's in place in the United States.

4:35 p.m.

President, Alberta Liquor Store Association

Ivonne Martinez

I don't believe there are.

4:35 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Mr. Paszkowski, would you comment?

4:35 p.m.

President and Chief Executive Officer, Canadian Vintners Association

Dan Paszkowski

With respect to the private order program, there are private order programs available through most liquor boards. It does take a significant amount of time for the wine to arrive. I think the websites rank it anywhere from three to six months. You require a one-case minimum, and typically not a mixed-case lot.

There are examples that I know of in which a consumer in Ontario, for example, wants a specific wine from British Columbia, but there is an agent in Ontario, so they cannot use the private order program; they're turned over to that winery's agent. The amount of paperwork that agent has to do to get that wine through the liquor board system is not worth his or her while, so it doesn't happen.

Yes, a private order program is there. Is it perfect? No, it's not perfect. Can it be improved? Yes, it can be improved. It can be improved to the point where many consumers will use it. That's no reason not to amend this bill and allow consumers to order directly from a winery.

With respect to trade laws, since 2005 the United States has been implementing a system of direct consumer delivery. They have not been challenged. I have spoken to the United States industry. I've spoken to the European industry as to whether Bill C-311 is open to challenge. As long as it meets national treatment obligations, there is no reason and no case for any country to challenge the outcome of passing this piece of legislation.

4:40 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Thank you.

I think I've used up Mr. Chisholm's time too, so I'll have to—

4:40 p.m.

Conservative

The Chair Conservative James Rajotte

Yes, you have, unfortunately, but Mr. Chisholm will have a round, for sure.

4:40 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Yes.

4:40 p.m.

Conservative

The Chair Conservative James Rajotte

We'll go to Mr. Jean, please.