Evidence of meeting #90 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Luke Harford  President, Beer Canada
Murray Souter  Board Member, Canadian Vintners Association
Carl Sparkes  President and Chief Executive Officer, Devonian Coast Wineries
Joyce Reynolds  Executive Vice-President, Government Affairs, Restaurants Canada
Jan Westcott  President and Chief Executive Officer, Spirits Canada
Frank Rider  Chairman of the Board, Canadian Association of Mutual Insurance Companies
Normand Lafrenière  President, Canadian Association of Mutual Insurance Companies
Nicholas Rivers  Associate Professor, University of Ottawa, As an Individual
Marc André Way  President, Canadian Taxi Association
François Pepin  President of the Council, Transport 2000 Québec
Maëlle Plouganou  Secretary of the Board, Transport 2000 Québec
Louis Marcotte  Director General, International Business Development, Investment and Innovation, Department of Foreign Affairs, Trade and Development
Roger Ermuth  Assistant Comptroller General, Financial Management Sector, Office of the Comptroller General, Treasury Board Secretariat

5 p.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Is that your number? Is it 5¢?

5 p.m.

Board Member, Canadian Vintners Association

Murray Souter

When it gets to the price, right?

5 p.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Yes.

5 p.m.

Board Member, Canadian Vintners Association

Murray Souter

If the price is $9.95, I can't go to $10. The LCBO will not allow me to, so I have to absorb it or become uncompetitive. In an industry where we're now doing well, we'd become uncompetitive by pricing ourselves up in these markets that are not going up in price.

5 p.m.

President and Chief Executive Officer, Devonian Coast Wineries

Carl Sparkes

If I may add—

5 p.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Isn't it a level playing field? Isn't everybody going to get that increase? Where are you—

5 p.m.

Board Member, Canadian Vintners Association

Murray Souter

Our competitors in France will absorb that. They won't even notice it. They're billion-dollar companies. I'm a $30-million company, including all of my business. It would just absolutely destroy our industry. We have small producers who are generating 5,000, 6,000, or 7,000 cases and $150,000 to $250,000 worth of revenue. They can't afford to lose a sale, and they can't afford to absorb the increased costs. You heard earlier that it's $40,000, for example, on Devonian.

5 p.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Those producers would not be VQA producers.

5 p.m.

Board Member, Canadian Vintners Association

Murray Souter

It would be a combination of both. It would be both VQA and ICB.

5 p.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

The VQA producers are exempt.

5 p.m.

Board Member, Canadian Vintners Association

Murray Souter

Exempt, but they—

5 p.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

What percentage would be exempt?

5 p.m.

Board Member, Canadian Vintners Association

Murray Souter

Of the total wine sales? Less than 10%.

5 p.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Less than 10% would be exempt. Okay.

Did you want to add to that, Carl?

5 p.m.

Board Member, Canadian Vintners Association

Murray Souter

Yes, so—

5 p.m.

Liberal

The Chair Liberal Wayne Easter

You both want in.

Go ahead, Mr. Sparkes.

5 p.m.

President and Chief Executive Officer, Devonian Coast Wineries

Carl Sparkes

There is a huge differential between liquor jurisdictions. In Ontario, for example, that 63¢ per litre excise tax becomes manifest, and it will be 90¢ by the time it's sold through the LCBO.... It's a much higher number by the time it's absorbed by the licensees, by the restaurants. In Atlantic Canada, and in Nova Scotia in particular, the markup that the individual liquor board takes on that 63¢ as it flows through the system means 90¢ in Ontario and $2.30 in Nova Scotia. That's a huge, huge tax on our business.

May 15th, 2017 / 5 p.m.

Liberal

The Chair Liberal Wayne Easter

Mr. Harford.

5 p.m.

President, Beer Canada

Luke Harford

I don't get to ask the questions, but I'm going to answer your question with a question if that's okay.

We hear this time and again when we're meeting with Finance officials and we're trying to tell them why this is a big deal. They say it's just 5¢ a case. If it's not such a big deal, if it's just a little number, why do it? Why is the government going to risk putting this into the cost structure of small Canadian producers when we have NAFTA challenges, Trump issues, and all kinds of things going on? Why do it? Why now?

5 p.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Whenever I go outside of Canada, I find that I always want to bring ice wine with me. I want to ask about the ice wine. Would ice wine all be a domestic product? It would be for export, so if they are looking at exporting that product, that would be completely exempt from any of these taxes. Is that correct?

5 p.m.

Board Member, Canadian Vintners Association

Murray Souter

Yes. Ice wine is a very small proportion of the industry in Canada. Domestic consumption of ice wine is very small.

To Mr. Harford's comment, this tax, although it's not much—it's $1.8 million worth of revenue to the government—jeopardizes a $9 billion industry.

5 p.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

What do you—

5 p.m.

Liberal

The Chair Liberal Wayne Easter

Peter, you can have one quick one, because we are over time. We have other witnesses. I know this is one of the most controversial areas. That's why I'm letting this go a little longer.

5 p.m.

Liberal

Peter Fonseca Liberal Mississauga East—Cooksville, ON

Have you done an economic impact study? What would that mean, if this measure is put in place, to the industry in terms of a drop in consumption?

5 p.m.

Board Member, Canadian Vintners Association

Murray Souter

We haven't measured the drop, but we can tell you that it would put the $9 billion at risk. At what level, I don't know at this point. It's significant.