International Trade committee  No, we have not accessed any government funds. Over the past ten years, I would say, we have focused mainly on scenarios in which we see an opportunity to go and open up a market. You can't spend promotion dollars until you have created conditions that are reasonable for people to make those investments.

International Trade committee  I believe the population of Korea is about 50 million people.

International Trade committee  You can understand, then, why Korea represents such an important market. I don't think Korea is out of step with a number of Asian and South Asian countries, and we've identified a long time ago that they're important markets for Canada.

International Trade committee  Yes, we have. We are an export-oriented industry. We've been highly successful. We have identified markets around the world where we have gone and worked hard to introduce our products into them and to successfully sell them. It's an ongoing aspect of the business. Many years ago we identified South Korea as a prospective opportunity market for Canadian goods, particularly for Canadian whiskey.

International Trade committee  Thank you, Mr. Chairman. Spirits Canada is the only national trade association that represents the interests of Canadian spirits manufacturers and marketers. On behalf of the Canadian distilled spirits industry, we appreciate this opportunity to appear before you today to share our perspectives on the ongoing negotiations between Canada and South Korea to reach a potential free trade agreement.

Finance committee  Thank you.

Finance committee  That's correct.

Finance committee  No. The fact is that Canadian spirits producers are significant exporters. About 72% or 74% of what we make leaves the country. We are a long-time export-driven business. Our largest market is the United States. Canadian whisky is the largest-selling whisky in the United States--scotch, bourbon, and Irish combined.

Finance committee  Well, it's the alcohol. Drinks can contain the same amount of alcohol, yet we have vastly different tax rates, which translate into margins, so some people come into the marketplace with a lot more money in their jeans to drive the business forward than other people.

Finance committee  Very many spirits products produced in Canada are made from 100% Canadian cereals and grains--corn, rye, and wheat.

Finance committee  Yes. One of the issues in comparing tax systems, tax rates, or tax approaches is to have a common effect. The Government of Canada doesn't have a common approach to these things. Some products are taxed for excise on the basis of the amount of alcohol in them in terms of absolute alcohol, while some products are based on the amount of volume, so it's very difficult to even get a comparison, because of the different approaches.

Finance committee  Thank you, Mr. Chairman and committee members. The beverage alcohol market in Canada could well be the poster boy for the theme of this year's pre-budget consultations, Canada's place in a competitive world—a poster boy, that is, of what not to do to create a dynamic and a competitive market.