Mr. Speaker, I am very pleased to speak to the bill introduced by my colleague from Huron—Bruce. I will start by commending him on the initiative he is proposing in the House today.
I am a bit disappointed that my colleague from Gatineau kind of missed the point of the bill, which is to help small producers and microdistilleries that produce less than 100,000 litres of ethyl alcohol a year. I am disappointed that he focused on the modest reduction in excise tax for distillers who produce more than 100,000 litres a year. That is one of the only concerns I have with this bill because it is mainly the major players who will benefit from this modest reduction.
As my colleague explained earlier, the bill primarily addresses microdistilleries, and not multinationals in Canada that essentially do a lot of exporting. Multinational distillers that are set up more or less everywhere do a lot of exporting. However, the bill primarily concerns microdistilleries that produce less than 100,000 litres a year. We have to put that into perspective. I hope my colleagues across the way will appreciate this positive aspect of the bill, because it encourages small and medium-sized businesses.
As my colleague from Huron—Bruce pointed out, microdistilleries are important economic drivers in many regions across Canada. They are small businesses that hire people across the country and try to carve out a space for themselves in a difficult market. All members here will recognize that the spirits and distilling market is a difficult one.
As parliamentarians, we must consider the existing Excise Act and look at how we can give our small businesses better opportunities in a highly competitive market.
Imports are also a huge factor. We export a lot of our products, but in our domestic market, we also import many products from other countries.
That is why I think it is important to focus on microdistilleries, the smaller players that are already operating in an extremely competitive and regulated market. There is a considerable administrative and regulatory burden imposed on distilleries. One would have to read the Excise Act to understand just how how heavy a burden this is on businesses.
The rules are extremely strict, and quarterly reports must be produced, in addition to annual reports. Every litre of alcohol produced must be recorded, bottled, and labelled. This is extremely onerous. Furthermore, distilleries need to obtain licences and renew them every year. Their offices must be accessible to inspectors working under the authority of the Minister of National Revenue. The inspectors must have access to the facilities and be able to review all documentation every year. Often, these are microbusinesses, and we are seeing them all across Canada. It is important to note that this sector is booming right now. Microdistilleries are popping up all over the place, including in Quebec. Some just recently entered the market. Every microdistillery talks about the huge burden associated with starting a business in this sector.
I was talking about licences earlier. Producers also need collateral and substantial start-up capital. It can take time for producers to see a return on their investment, especially if they are making spirits that need to be aged, such as whiskey.
Canadian whiskey has to age in barrels for three years. Producing whiskey requires a substantial investment. People do not see returns for three years, and then only if they did their initial research and development properly so as to end up with a quality product that, three years later, can compete internationally against other quality products.
It is also important to mention the Association of Canadian Distillers. The two members who spoke before me mentioned it. They did a lot of work and research and found that there is a need to restore balance in the gaming and alcohol market in general because some sectors enjoy significant advantages over others.
That is an important point. The Association of Canadian Distillers did the work and came to that conclusion, and they sent the government a budget proposal to reduce the excise tax on the first 100,000 litres of absolute ethyl alcohol for distillers.
Where we have somewhat different views, as I said at the beginning, is on reducing the excise tax on surplus litres, that is, when more than 100,000 litres are produced. We do not see the point of lowering it by nearly 70¢. If we manage to get this bill to committee, would could examine this issue a little more closely.
Furthermore, in this first hour of debate, it is also important to point out the discrepancy with the request from the Association of Canadian Distillers. I would have liked to ask my colleague a question about that earlier, but unfortunately I did not have a chance to do so.
In clause 1 of Bill C-232, which amends section 122 of the Excise Act, 2001, we read the following, “With respect to the first 100,000 litres of spirits produced in Canada...duty is imposed”.
However, the request from the Association of Canadian Distillers talks about the first 100,000 litres of ethyl alcohol. In addition, in his speech, my colleague also talked about 100,000 litres of absolute ethyl alcohol. It might be important to confirm exactly what is meant in clause 1 of Bill C-232, which talks about the first 100,000 litres of spirits produced in Canada.
I think it is important to make the distinction because if we take the first 100,000 litres of spirits, and agree that each litre of spirits produced in Canada contains 40% absolute ethyl alcohol by volume, we might conclude that the first clause of the bill seeks to reduce the excise tax on the first 40,000 litres of absolute ethyl alcohol by volume.
However, I am sure that my colleague meant to focus on the first 100,000 litres of alcohol and not the first 100,000 litres of spirits, because spirits contain more than just alcohol.
I want to reiterate my support and that of the NDP and I hope I will have my caucus' support to send this bill to committee for further study, including another look at the cost. I know that the cost is estimated at $55 million and that in a few years there could be some cost recovery as a result of increased production.
I hope that we will get enough support from our colleagues in the House. I urge all my colleagues on all sides of the House to support this bill and send it to committee, because it is extremely important to support small and medium-sized businesses and the microdistilleries. Distillers who produce less than 100,000 litres of alcohol a year are small businesses, economic drivers of the regions.
I encourage all my colleagues to support this bill.