Thank you for having me present to the committee today.
My name is Barry Rooke. I'm the executive director of the new national cider association, Cider Canada/Cidre Canada. We support 370 licensed cider makers across the country and just reached our first year as a non-profit last month. Although the association is new, cider has been produced in Canada for hundreds of years, making a resurgence over the last half-decade. We believe that the number of cider producers has doubled in the last five years across Canada.
The sector directly supports close to 9,000 jobs, and tens of thousands of others at orchards and in transportation and restaurants. Cider producers come in many different forms: small fruit-to-table producers that do everything, like Riverdale Orchard and Cidery in Bonshaw, P.E.I.; community-focused small businesses, like Coronation Hall Cider Mills in Bristol, Quebec; destination cideries like Taves Estate Cidery in Abbotsford, B.C.; and large, commercially driven products that service the entire country, like Growers, No Boats on Sunday, and Thornbury Craft cider company.
In Ontario, we believe that close to 8% of all apples are used for cider, with the numbers in Quebec, B.C. and Nova Scotia at similar or even higher levels. Many of them use apples that would not be used otherwise because of their appearance. It is also an important alternative to beer for those who are gluten intolerant and don't want the high alcohol levels of wine.
Our biggest concern is related to the incoming excise duty. This is expected to increase the costs of a can or a bottle by 20¢ to 50¢. This cost has to be borne by the producers or passed on to the consumers for at least six months before the proposed program for producers provides some relief.
With production costs rising, transportation costs further increasing and new cash-flow issues, cider producers are struggling to compete with international products, price points that are drastically inferior to Canadian beverages, and seeing money leave the country. This would be very bad for Canada's largest fruit-producing sector.
The proposed support program appears to be short by $25 million to $35 million a year and is only set to last until 2024. We need to have a fully funded program, as the sector's consumer base is really starting to grow. We have the resources to be one of the largest producers of this product in the world. Having the added cost will stifle growth, as it puts in doubt the producers and leaves the sector unsure of whether to invest in the Canadian economy. We could see close to half of cider producers in Canada close their doors within the next three years, with an estimated economic impact of $500 million annually.
Production of cider is slightly different from our counterparts in the wine industry, where cider is classified. Production costs for cider are typically higher than wine, but is consumed more like a beer. Apples can travel better but are stored for a longer time, which makes production able to happen year-round. This means that importing juice, which is not overly common, could be a solution to reducing costs, at an impact on the local economy.
Without a fully funded program, large commercial cideries will have no incentive to buy Canadian apples and may turn to imports. This also encourages medium companies, which use groups like BC Tree Fruits to co-pack or co-produce a product, to look for juice externally and further hurt the Canadian apple industry.
I'll finish my time with some great news about the sector. We are becoming known worldwide, as cider producers in Canada are winning awards at a disproportionate rate. We are really, really good makers of cider with Canadian apples.
Thank you again for the opportunity to share the information about what used to be one of the largest industries in Canada—pre-prohibition era—now seeing faster growth than the craft beer industry did from 20 years to 10 years ago. Now is the time to invest in the sector.
I'm happy to answer any questions.