Mr. Speaker, this is a fitting bill for a Friday afternoon.
First, I congratulate my colleague, the member for Huron—Bruce, who I think has done an excellent job on a bill that would significantly help the prospects of economic diversification in many different corners of our country.
I had a speech prepared, but I actually want to spend time refuting some of the assumptions that have been brought up in some of the questions from my Liberal colleagues today. I hope they will actually consider these points.
From what my colleague, the member for Huron—Bruce said, I believe he is open to amendments, so I hope the bill is not rejected flat out. I will explain why.
As an example, when the wine industry in its present form took root in British Columbia about 30 years ago, it completely transformed the economy of interior British Columbia and of British Columbia as a whole. Today the wine industry in British Columbia is not just about the production of the product itself. It is delicious, and I certainly encourage my colleagues to try some delicious B.C. VQA wine, but what is more important is the number of people employed in the sector, the investments that have been made in infrastructure around the industry, and the hospitality trade in wine tourism. The wine industry has fundamentally changed the region.
Economic diversification is not just about a grant or running a $30 billion deficit; it is actually about making small, meaningful changes that can significantly encourage investments and new activities. That is what Bill C-232 proposes to do. This is one of those small, meaningful changes that can have a significant impact on an entire industry.
What do I mean by economic diversification? Why is the bill helpful?
If the bill comes into force, it would, without a shadow of a doubt, encourage investment by small producers into microdistilleries. We have the data on that. I encourage my colleagues from the Liberal Party to look at the consumer trend reports from Agriculture and Agri-Food Canada showing some of the market indicators on the potential growth in the spirit industry in Canada. There is huge potential for growth here if we have the right economic conditions.
What we are hearing from the industry is that the particular measure that is included in this bill is what needs to happen in order for people to do a few things: make the investment into equipment and facilities to produce the product and, as my colleague mentioned, look at new crops and the diversification of our agri-food and agriculture sector. Also, we need to be more competitive internationally and in the domestic market.
One of the assumptions that came up in the questions was that making this small, meaningful change would somehow reduce government revenue. I firmly push back on that particular assumption, because I do believe what will happen is what we saw in the wine industry when we made certain changes to allow that industry to grow: we saw an enormous growth in the money that comes into Canada as part of Canada's GDP through that industry. When we have made small changes, we have seen more revenue come into the government's coffers. There is more investment and more tax revenue coming from that.
We know that we do not necessarily have to increase taxes to get more government revenue. I actually believe it is the opposite. I believe that when we reduce taxes, people will take more risk. It will incent them to try new products and new programs. That is what this bill would do.
Specifically with regard to the excise tax reduction proposed in the bill, the assumption that because there has been no material, real increase in the excise tax over a period of time, or that there has actually been a reduction, misses the point. The point is that other countries around the world have reduced their excise tax significantly, so when Canadian distillers are trying to get into that market or when Canadian consumers are considering a choice in product, Canadian producers are unduly disadvantaged. Bill C-232 would change that.
This would put Canadian producers of spirits on an even playing field and an even footing, and one could argue they could even go further than some of their international competitors. If we did that, we would see growth in the industry.
Distilleries can impact the economic diversification of virtually any region of the country. We have certainly seen a big increase in the appetite for these types of products.
I will re-emphasize that this is not a niche issue. This industry has had a significant impact on the Canadian economy already. Over 8,500 jobs are associated with the spirits industry. Excise duty revenues have increased by over 40% between 2006 and 2015, which shows that, as the industry grows, government revenue increases. Therefore, if we slightly decrease the excise tax rate to make it more attractive for investment in this industry, we likely will see, based on these forecasts, an increase in revenue over time.
Another very interesting fact in the other economic spin-off is that Canadian distillers use 320,000 metric tonnes of Canadian grain. Spirits producers are the largest purchaser of rye grain in Canada and among the top producers of grain corn in Ontario, Quebec, and Manitoba. Again, this about the economic diversification of not just one industry expanding itself, but it is also looking at how we make our agriculture industry more competitive and more diverse.
According to the Distilled Spirits Council of the United States, 54% of the retail price of an American whiskey sold in the USA is federal, state and local taxes, but a comparable number in Canada for Canadian whisky is 82%. Members can see what a large delta there is in being able to be competitive with international producers.
Canadian whisky and other spirits account for over two-thirds of Canada's beverage alcohol exports, with wine and beer being less than one-third. Therefore, why is the bill important to our international competition? It is because our spirits industry is at the forefront in terms of promoting Canada's brand awareness in international markets on our overall beverage products.
More equitable federal duty rates for spirits are critical to spur growth and investment in industry plants, brands, innovation, and opening of foreign markets. I appreciate some of the comments my colleague from the NDP made as well, but essentially, if individuals are spirits producers or a craft distillers and if they are looking at making investments in expanding their production and want to market overseas or encourage Canadians to partake in their beverages, this is a very clear signal from the government that it is here to support growth.
In my time as minister of state for western economic diversification, I had a small pool of grant funds that were available to fund projects that would hopefully help encourage trade, or skilled labour training, or promote diversity in the economy through developing new and innovative products. Grants are one thing, but sometimes tools like this, where we slightly reduce a tax rate, can be so powerful in sending a signal to the industry that we are serious about seeing it grow.
To me, this is really an easy and simple thing that the government could do to send a signal to the industry that it wants to see this industry grow and that economic diversification is something about which the Liberals are serious.
Many of the speeches talked about supporting the middle class, and this and that. However, at the end of the day, this move would undoubtedly create jobs in Canada. It would make our agriculture industry more resilient, and it would certainly allow new and interesting sources of revenue for producers who might look to enter this market.