Mr. Speaker, I am pleased to rise in support of Bill S-38 because it is important to our agriculture and agrifood sector and indeed to all of Canada and all Canadians. The bill would open up possibilities not only for the Canadian spirits drink industries, but for our wine industry and for our growing agri-tourist sector as well.
The bill is about jobs and about the diversification of regional economies. It is about growing Canada's $26 billion a year agriculture and agrifood exports in a manner which is most beneficial to our economy and our jobs.
One might ask how Bill S-38 would do all that. The bill would accomplish that by helping our agrifood sector add more value to our agriculture products, our grains and our grapes here at home so we can keep the dollars and economic prosperity within Canada.
Bill S-38 is also known as the spirit drinks trade act. Basically the bill would bring into full force a bilateral wine and spirits agreement that was signed by Canada and the European Union two years ago. It is this agreement which will benefit Canadian producers in both our domestic and foreign markets in the ways that I have just outlined.
The agreement, signed in September 2003, covers a wide range of wine and spirit trade issues between Canada and the EU. These include updates to an existing bilateral agreement which has been in place for some 15 years.
I will speak first to the technical provisions in the bill regarding spirit drinks which upholds Canada's end of the Canada-EU agreement.
In a nutshell, these provisions protect the identity of certain European drink names such as ouzo from Greece, grappa from Italy, pacharan from Spain and others.
Under Bill S-38, only spirit drinks from those specific countries and nowhere else could carry those names. In other words, a distiller in Niagara could not produce a spirit drink and sell it as a grappa or an ouzo. To be clear, no Canadian producers are doing this now.
Certain wines and spirits which are named after the geographic regions where they come from such as Rheingau and Baden in Germany already are protected in Canada under the Trademarks Act. So are Canadian geographic indicators such as the Okanagan Valley, or the Niagara Peninsula or Canadian rye whisky. Products like grappa and ouzo do not fall into that geographical indication category so they needed the specific protection provided under Bill S-38.
New legislation is needed to house the protections required by the Canada-EU bilateral agreement on wines and spirits. This is because these provisions could not simply fall under the Trademarks Act. It does not cover generic names for goods. Furthermore, it only protects private rights while the agreement calls for state enforced protection of these names.
As well as protecting European spirit drink names, Bill S-38 also would protect a number of North American spirit drink names, including Bourbon whisky from the United States and tequila from Mexico. These provisions fall under Annex 313 of the NAFTA.
Bill S-38 would also incorporate Canada's long-standing protection for the names Scotch whisky, Irish whiskey, cognac and Armagnac. Finally, the bill would provide protection for Caribbean rum under the Caribbean and Canada trade agreement. These existing commitments are currently implemented through provisions in the food and drug regulations, however Justice has advised us that it is not the appropriate home for them or the appropriate legislation for them to be within
I would also note that following consultations with Industry and International Trade Canada, a number of minor amendments were made in the committee in the other place. These amendments were designed to more clearly differentiate between the types of protection that Canada undertook to provide for each spirit drink name.
These are the nuts and bolts of Bill S-38. As I said earlier, while the bill may be viewed as a minor technical matter, Canada's wine and spirits industries regard it as much more than that. For them, Bill S-38 is nothing less than a wide open doorway to new growth and exports and new market development opportunities.
We are talking about is helping an industry that is already a strong contributor to Canada's economy and jobs, particularly in rural Canada where many of our wineries and distilleries are located. Rural Canada, as I have said on a number of occasions, is an important part of our country and the government takes that part very seriously. For urban Canada to be strong, rural Canada must be strong as well. They are not separate entities and they are not separate ideas, and we must support both. Rural Canada is home to one-third of Canadians. It provides one-quarter of all jobs. It contributes 22% to Canada's GDP and 40% of our total exports. Certainly the wines and spirits industry is an important contributor to that output.
We should never lose sight of the fact that our rural communities, our rural resource base and our rural people are the fabric and backbone of what makes our country strong. Canadians know that rural communities are key to both our social and our economic competitiveness. They are the front lines in building a better quality of life for the entire country. There is no question that wineries and distilleries are good for the rural economy. They generate crop sales for primary producers.
On the winery side, we are seeing a tremendous boom in the whole agri-tourism sector. More and more tourists are flocking from all corners of the globe to take wine tours in the Niagara Peninsula, the Okanagan Valley, Prince Edward County and elsewhere, even the Annapolis Valley as my colleague next to me has indicated, much as they do in the Napa Valley in California or the Loire Valley in France. That influx of tourism brings important economic benefits right throughout the rural economy: the hospitality sector, the restaurant sector, the travel sector and much more.
The Canadian wine and spirits industries are agrifood success stories, to be sure. Our wine sector continues to grow at a steady pace in many parts of Canada, including, if I may add a commercial message, in my own province of Prince Edward Island. Today about 170 wineries across Canada annually sell some $400 million in wines and purchase $75 million in grapes from producers. As for the spirits industry, Canada has 21 distilleries that produce over $1 billion worth of spirit drink products each year. Of that, some $500 million worth is exported.
As we heard in committee in the other place, both the wine and the spirits industries, including the Canadian Vintners Association and Spirits Canada, are in full support of Bill S-38. Why? Because, as I mentioned earlier, it secures the benefits achieved under the 2003 Canada-E.U. agreement. This agreement provides the industry and the Canadian economy with trade rules in the domestic marketplace, with greater access to the E.U. marketplace, and with a framework to manage any potential grievances in a cooperative and collaborative manner. Best of all, this is a balanced agreement that would benefit both sides without causing any disruption in the Canadian marketplace whatsoever.
With this proposed legislation bringing the 2003 Canada-EU agreement into full force, Canadian wines and spirits producers can look forward to improved access to the European market with which the recently expanded membership is now home to almost half a billion potential consumers. That is a considerable marketplace which is now open to more products thanks to this proposed legislation, products of which Canadian producers and the rural economy can take advantage of.
With Bill S-38 in force, wine and spirit producers in both Canada and the EU will have an agreement that would give them access to more trade opportunities and more stable trade rules. As well, consumers in Canada and the EU have access to a greater variety of wines and spirits than they have had in the past.
The Canadian industry is confident that the agreement will help free up some of the market restrictions that they have encountered in the EU market over the years and in doing so, secure greater recognition in the international reputation of the Canadian wines and whiskey.
As members will know, the Canadian wine industry has made great strides in quality over the past decade, due in large part to the development of the VQA , or the Vintners Quality Alliance, application. Today Canadian VQA wines are known and respected in international wine circles. It is interesting, even if we go to the stores around here, we will see people looking for that VQA symbol because that is the wine they like to buy and that is quality.
The next important step will be to make our quality Canadian wines household names right across Europe, to get them into basement wine cellars from Paris to Prague. The bill marks an important step in that direction. In fact, the wine industry believes that on the strength of this agreement, it will be able to grow wine exports from about $1.5 million annually to some $5 million over the next 10 years.
To give a few more specifics of the Canada-EU agreement, it will recognize for the first time Canadian wine-making practices in labelling rules for VQA wines in the EU market. It will provide for simpler certification for VQA exports, giving wine exporters greater certainty of market exports and allowing them to invest in market development. While protecting EU spirit names, it will protect our geographic indicators in the EU, notably Canadian whiskey and rye whiskey.
I must add that Canadian whiskey is an incredibly positive ambassador for Canada in many markets around the world. A full 80% of our production of Canadian whiskey is exported. Formal recognition by the EU of Canadian whiskey and rye whiskey provides the Canadian spirit industry the opportunity to invest and grow their brands, secure in the knowledge that they will not be undermined by cheap imitation knock-off products in the markets that they serve.
Just as important, here at home the Canada-EU agreement permits provincial liquor boards in Ontario and British Columbia to continue to allow producers in those provinces to make direct sales to consumers. Quebec also will be able to maintain its requirement that wine sold in grocery stores be bottled in the province of Quebec.
To sum up, Bill S-38 is about jobs. It is about regional diversification in rural Canada. It is about growing Canada's exports and adding value to those exports to keep more prosperity and more economic benefits here at home and to continue to build rural Canada. Bill S-38 is about Canada living up to our international trade obligations. We take these commitments very seriously and we expect no less from our trading partners. Canada is a trading nation and a rules-based trading system is fundamental to the global economic competitiveness of Canadian industries.
It is for these reasons that I would urge my hon. colleagues on all sides of the House to lend this important bill their full support. I would note that Canada agreed to provide protection for these names by June 2006, so it is important that we move forward with this bill rather quickly.
We must pass this legislation because it gives Canada a legal mechanism enabling it to meet the trade obligations we have so carefully negotiated. In the context of the discussions which led to the renewed agreement on spirit drinks and wines, Canada has succeeded in obtaining many benefits from the EU which Canadian producers and consumers can enjoy. However, to retain those benefits, we must ensure we are in a position to honour our obligations to our trading partners.
The provinces, the members of the wine and spirits industries in Canada and the federal government have worked hard together in negotiating the Canada-EU agreement on wines and spirits. The bill we have before us is the end result.
I would also like to recognize the contribution, hard work and collaboration of a number of federal departments including Agriculture and Agri-Food Canada, International Trade, Justice, Industry, and others. This is a significant accord that ensures Canadian wine and spirit drinks producers will have increased access to markets in the European Union in the years to come.
Again, I urge members to support the timely passage of this legislation.