Mr. Speaker, it is indeed an honour and a pleasure to speak to the bill brought forward by my colleague from Huron—Bruce. It was introduced before Parliament broke for the summer and, as has been mentioned, it gave us an opportunity to have discussions with distillers, which I did this summer out in Nova Scotia, along with the folks in my own area in Ontario. I also spoke with the agriculture community, which not only plays a significant role in terms of the success of this industry but also in terms of building the industry and making a quality product. I will touch on that a little later as I move along.
Bill C-232 is about changing the excise tax. It takes it away from the percentage of absolute alcohol and moves it to the volume of alcohol that is being produced. That may sound a little harsh, but the reality is that for alcohol over 7%, the duty was $11.69 per litre. For under 7%, it was $0.295 per litre of absolute alcohol. The idea now is to move that away from that percentage point to a volume, which is quick and simple. In fact, the distillers we have in Canada are micro, small and medium-sized. Therefore, it will move it to a very simplified and fair regime of $6 for the first 100,000 litres produced and $11 for over 100,000 litres.
You have to remember that when we speak of volume, it is equal for all types of alcoholic beverages; that is, 1.5 ounces of spirits containing 40% alcohol, five ounces of wine containing 12% alcohol, and 12 ounces of beer containing 5% alcohol. That is referred to as a standard glass. Therefore, it makes it comparable across the board for those who want to look at the equivalency of different drinks. The excise tax on beer and wine has been lower.
I listened to my colleague from Winnipeg ask why our government did not do this before when we were in government. We in fact took action but it was a process. However, members have to remember that although the Liberals proposed to deal with it in their budget, they chose not to at the time. I am glad to hear that they now see this as a positive move because quite honestly it is. It is about small and medium-sized businesses. It is about the workers in our areas who work hard every day. This is of benefit to them. Why is that? We know that if we give an opportunity to any enterprise, the benefits will come. In this particular case, these small and medium-sized companies, mainly distillers, will take that money and reinvest it into innovation, marketing, and job creation.
In other jurisdictions where the excise tax has been lowered, it was not at a cost to the government. As Conservatives, we have always said that the reason we were able to produce surpluses in our budgets at year end was that when we lower taxes, we increase the revenue to the government.
Why is that? It is because we leave more money in the pockets of people. Businesses hire workers, workers pay taxes, and, as a result, the government and business both win by generating revenue in excess of what they did before the excise taxes, and any taxes, were lowered. That has become evident in the United States, where they have seen tremendous growth in the distillery industry. When the U.K. dropped the excise tax by 2%, it actually generated a revenue increase of some 96 million euros.
We believe that lowering taxes for businesses, particularly small and medium-sized businesses, for the most part, will generate more revenue than if we keep taxing them to death.
One of the other industries that makes this industry so important is obviously agriculture. In my riding of Lambton—Kent—Middlesex, agriculture is the largest industry. For the producers of the corn, wheat, barley, and some rye, that goes to the distillers, it is a significant part of income in the agriculture industry. In Ontario, the distillery industry is the fourth-largest purchaser of corn. Some 320,000 metric tonnes go into the production of spirits.
Why are the Canadian distillery industry and Canadian spirits so well regarded around the world? It is like anything else. Those on the manufacturing and production side who produce a quality product can be assured that in world markets, they will have a select and good market for their products. This is the case with our distilleries and the spirits produced in Canada. Our farmers produce the highest quality grains used to produce these spirits.
One of the great things Canada has is water. Canada is one of those blessed and very fortunate countries that can produce, with the technology we have, some of the best, purest, most pristine water in the world.
We are looking at a market that is shrinking for the spirit industry in Canada. The bill brought forward by my colleague for Huron—Bruce would give this industry an opportunity to start to gain back, through exports and domestic use, some of that market share by producing some of the greatest and finest spirits in the world. We want to make sure that we give these distillers, farmers, and all of those within the industry, the value-added industry, the benefits that, in the end, would benefit the Canadian people, through the government. As I mentioned, all of our distillers in Canada are small and medium sized.
In terms of marketing and promotion, we have world-class spirits. It is Canadian branded. We, and the Speaker of the House, have a designated choice of spirits for Canadians. The only recommendation I would make is that we use Canadian spirits for our designation as the Speaker's choice rather than something from another country.