Evidence of meeting #51 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was wineries.
A recording is available from Parliament.
Conservative
Dean Allison Conservative Niagara West—Glanbrook, ON
One of the things I find challenging is access to market. In talking to multiple winery owners, it's not like this is going to be a crazy.... I think your stats were 1% in the States.
What do you anticipate in Canada? Will it be a similar hit? Is it still going to be a very small percentage?
Conservative
Dean Allison Conservative Niagara West—Glanbrook, ON
Okay. Mr. Bosc, and then I'll come back to you because I have another question.
Mr. Bosc, did you have a comment?
President, Château des Charmes
Even if it is 2% of the total wine market in Canada, in my opinion the overwhelming majority of the trade is going to be 100% Canadian VQA premium and super-premium wine. On a national market share basis, the wines I just described have 6% of the national market. If 2% of the national market accrues to VQA, it's a significant impact on premium small producers, but on the broad national market it will only be up to 2%.
We were also talking about a reasonable limit. Not too long ago we had a pretty wealthy Hong Kong businessman, I assume, who ordered 20 cases of icewine in the boutique, at $18,000. Through what is called “a personal exemption”, all he had to do was satisfy the authorities back in Hong Kong that his intent was for personal use.
I understand that he did that because the wine got through. That transaction, which unfortunately is fairly rare—we don't see enough of them—generated more than $3,000 in retail taxes for the Province of Ontario and the federal government. It's extremely frustrating—and not only to Canadian wine producers—that we can do a transaction like that with a fellow in Hong Kong, but we can't do a transaction like that with a fellow Canadian.
I wear another hat in this industry. I'm the chairman of the Canadian Vintners Association, and I've talked to wine producers across the country on this issue—big guys, medium guys, and little guys. I have yet to run into a winery principal who doesn't feel that this needs to be addressed. In such a diverse national industry, it's hard to find that kind of unanimity of opinion on anything, and on this one we have it.
Conservative
Dean Allison Conservative Niagara West—Glanbrook, ON
Thank you. I apologize. There is not a lot of time and I want to get Ms. Zimmerman in.
You were talking about VQA and what it adds in terms of value. I know there's not a lot of capacity in B.C. I mean, all the grapes go to VQAs, as I understand it.
Talk to my colleagues a bit about Ontario. There's still more capacity. Could you talk about it?
Chief Executive Officer, Grape Growers of Ontario
Dean, I think you're well aware that the last time we had a serious oversupply in the province of Ontario was 2008, and we dropped 8,000 tonnes of grapes on the ground.
What we're trying to suggest today with the bill is that by going to 100% Canadian, we don't ever want to do that again. I think the reason we may be overcautious, and some may suggest we're a little sensitive, is that a number of vineyards we currently have obviously can't afford to go back to where we were in 2008. We can only look forward.
So yes, use their capacity and we don't want that capacity eaten into by the imports coming into Canada or into the province of Ontario. But I think, as both my colleagues have said, with the growth in our industry the opportunity is there. So with good caution we support this bill.
Conservative
The Chair Conservative James Rajotte
Thank you, Mr. Allison.
Mr. Giguère, you have five minutes, please.
NDP
Alain Giguère NDP Marc-Aurèle-Fortin, QC
Thank you very much, Mr. Chair.
My thanks to all the witnesses; my congratulations for having developed such a flourishing industry.
There is a problem, as I see it. It is not so much your industry as protecting your industry against international markets. My first question, given the complete lack of harmonized rules, is this.
Would you be opposed to the idea of a transition period that would allow provincial governments to harmonize their rules on what a reasonable quantity is?
NDP
Alain Giguère NDP Marc-Aurèle-Fortin, QC
You agree with the idea of giving provincial authorities the time to harmonize their regulations as to the definition of a reasonable quantity.
President, Château des Charmes
You never know with the government. If it is going to take 10, 15 or 20 years, we do not have the time. But, in principle, I would agree with something up to 18 months.
Vintage Law Group, Winelaw.ca
I think we've waited 80 years for the provinces to agree on reasonable limits and there's been no progress at all. I don't put much faith in the provinces coming to any agreement within any kind of reasonable time on that issue.
President, Wine Council of Ontario
I think the provinces have been discussing this when they meet at the Canadian Association of Liquor Jurisdictions. So I think they've had an opportunity to discuss this and to see if they can come to terms, and if what we've seen reflected in their policy is any indication, I don't think harmonization has been their goal. I would like to see things move along quickly.
Chief Executive Officer, Grape Growers of Ontario
I just wanted to add that the presentation by CALJ was here last week, so that would have been a perfect opportunity to get their opinion on it. I'm not sure whether that question was asked of them but it might be a good question to ask them.
Executive Director, British Columbia Wine Institute
I would agree with my colleagues. I think that trying to get harmony across the provinces is the great Canadian tradition, so I think there's been plenty of time to do that. As Mr. Hicken says, it's been 80 years, so I think now's the time to put our best foot forward.
President, Alliance of Canadian Wine Consumers
I think it's a wonderful idea that has no practical ability to be successful.
NDP
Alain Giguère NDP Marc-Aurèle-Fortin, QC
Fine, thank you very much.
Free trade is governed by a number of rules, including the mechanism called national treatment. If, under the national treatment rule, we provide an advantage to a Canadian producer, do you think that your members will have to provide foreign competitors with the same advantages? That is a big deal. I am thinking essentially about large quantities of very high-quality wine being imported from France or Italy. Have you considered the national treatment mechanism as a problem?
Vintage Law Group, Winelaw.ca
I'm sorry, I don't quite understand the question.
Conservative
President, Alliance of Canadian Wine Consumers
The national treatment is a fundamental principle of international trade agreements, and we're wise to make sure we adhere to the principle. The way the bill is worded right now, I believe it does meet that principle. And to address some of your concerns, using information that's available on the LCBO website, if you were to order a case of wine from Australia through the LCBO, they would charge $300 to ship that case of wine to Canada. I think the reality is that, while it would be available, it's highly unlikely that very many Canadians would be lining up to add $300 to their case of wine.