Finance committee  Thank you, Mr. Chair and MPs. I am grateful for the opportunity to appear here today and present the Canadian wine industry's perspective on Bill C-44, the budget implementation act. My name is Murray Souter. I sit on the board of directors of the Canadian Vintners Association.

Finance committee  Thank you very much for the question. As you know, it is a huge economic driver in our province. You mentioned Niagara-on-the-Lake, near Niagara Falls, which is where I am from. The number one tourist attraction now in Niagara-on-the-Lake or Niagara Falls is no longer one of the

Finance committee  No, for both.

Finance committee  Absolutely.

Finance committee  I think I can probably speak for everyone. I don't think anybody was consulted.

Finance committee  Have they told us that they're going to do it? No, not at this point, but all the indications are that European and U.S. wineries particularly will be challenging us on this issue. It hits them two ways. It hits them both on the excise, because they've lost the tariff; and it a

Finance committee  Yes, that would be correct. We are already fielding those questions right now. We're in the midst of a major expansion that is funded through raising capital in the public markets.

Finance committee  In Niagara, it's up to $50,000 an acre. It does have an impact, obviously.

Finance committee  I'm not sure where the question was in there because we started with tobacco and ended with wine. On the issue of the excise tax for domestically produced 100% VQA wines, it was negotiated in 2006 that it would be excise exempt. The federal government brought that in at that tim

Finance committee  Yes, we've seen a significant increase in the number of wineries. We have 700 wineries in the country, and the number is growing every day.

Finance committee  Yes, but the impact is far greater than that. The 1¢ is the producer cost. Then you tack on how we have to make some money. We're not a charity. If we're trying to make a 20% profit, we would add to that. The provincial government adds to that significantly.

Finance committee  Yes, a percentage. On a $9.95 bottle of wine, the 1¢ cent ends up being 5¢ at the top, because of all these additions. The federal and provincial governments—

Finance committee  When it gets to the price, right?

Finance committee  If the price is $9.95, I can't go to $10. The LCBO will not allow me to, so I have to absorb it or become uncompetitive. In an industry where we're now doing well, we'd become uncompetitive by pricing ourselves up in these markets that are not going up in price.

Finance committee  Our competitors in France will absorb that. They won't even notice it. They're billion-dollar companies. I'm a $30-million company, including all of my business. It would just absolutely destroy our industry. We have small producers who are generating 5,000, 6,000, or 7,000 cases