Thank you very much.
The Grape Growers of Ontario support Bill C-311. We welcome the all-party support for expanding the cultivation and use of Canadian wine grapes. The legislation is well-intentioned, and if properly implemented, could be very helpful to our members. The excellent reputation of Canadian wines is spreading around the world. All Canadians should be able, legally, to enjoy our wonderful Ontario wines. It should not be easier to ship from a winery in Ontario to Memphis than to Montreal.
While we certainly do not want to stand in the way of this exciting initiative, we must ensure that the modifications proposed in Bill C-311 are the best or the safest way to achieve the goal. We believe that the initiative should apply—and we join with our partners in Nova Scotia—only to wines containing 100% Canadian grapes. However, we understand that the WTO rules require that equivalent competitive opportunity must be provided to all wines from all WTO members. Would Canadian wine blenders and bottlers of imported wine be far behind? Could Costco, offer their Juila Cellier—bottled in Quebec, foreign-origin—wines across the country? Our members are concerned that Bill C-311 could be much more beneficial to imported wine than to 100% Canadian. Could we lose more than we gain?
The Importation of Intoxicating Liquors Act is the basis for the liquor boards' right of first receipt. Amending this law could attract attention from NAFTA and the WTO. Should Canada be challenged about the way, or any way, or all provinces, or prominent provinces implement Bill C-311? Other, indeed, all liquor board practices based on the IILA could be challenged.
There were two challenges of liquor board practices under GATT in the late 1980s and the early 1990s, and Canada lost both. There was another EU challenge under the WTO a few years ago, and this was settled by more concessions than were made. These decisions were not only about markup. They also condemned Canadian practices on point-of-sale and direct delivery, which are at issue here.
Last week you asked whether U.S. practices had been challenged. In fact, Canada did challenge the U.S. on a wide range of their practices related to wine and beer. Canada won. That report was adopted by GATT in June 1992. Several practices linked to use of local grapes or local fruit wine were condemned. Earlier GATT and WTO challenges were settled on a negotiated and/or compromised basis. The WTO is more logistical than the GATT. Relitigating could result in great cost to Canadian wineries and grape growers.
I would say that hoping the changes pursuant to Bill C-311 will not be noticed or challenged is not sound business practice. Indeed, we know Mr. Dunning's testimony at the EU is closely being monitored.
We agree with Bill C-311. It is no doubt more politically attractive and would be popular—we realize that—but there are potential risks and downsides that need to be carefully examined to ensure that we're not opening a Pandora's box.
Thank you.