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Highlights from the 2013 Direct to Consumer Workshop

08/10/2013


Bill C-311 was good news for the Canadian wine industry, in part because it would allow wineries to take advantage of the growing domestic wine market. But the inconsistent response of provincial governments in the first year put a cork in the enthusiasm of wine makers. On June 19, 2013, representatives from B.C. wineries and industry stakeholders met to explore the topic of inter-provincial wine shipments direct to consumers in other provinces from three perspectives:

  • The current political environment in Canada with respect to the Canadian wine industry and inter-provincial wine trade (presented by Dan Paszkowski, President and CEO, Canadian Vintners’ Association)
  • Which provinces are currently ‘open for business’ (presented by Mark Hicken, Vintage Law Group)
  • How GST/HST and provincial sales taxes apply to direct-to-consumer wines sales (presented by Heather Weber, Indirect Tax Specialist, MNP LLP)

A few of the highlights from the Direct to Consumer (DTC) Workshop presented by MNP in Penticton are as follows:

  • The Canadian wine industry’s share of our own domestic wine market is only 31.1%. This lags far behind other wine producing nations. For instance the US is 67.7% and South Africa, Argentina and Chile are all over 99%.
  • Canada is the 3rd fastest growing wine market in the world.
  • These two points should add up to tremendous opportunity for Canadian wine producers.
  • Certain provinces are trying to prevent DTC shipping by taking a narrow interpretation of the word “import”. Alberta’s position is that the word “import” in its provincial legislation means only “in-person transport”. PEI is taking a similar stance.
  • Ontario’s legislation is silent on the issue of DTC shipping. There is a well-founded legal principle which suggests “that which is not prohibited is permitted”. However, the LBCO’s position is that only in-person transport is permitted.
  • When selling to customers in different provinces, wineries must consider which taxes and rates apply. This is determined by the place of supply.

Obviously, there is still much work to be done in order to get wine flowing freely across Canada. To learn more about what came out of the discussions at the DTC Workshop, read the printed article BC Wineries Meet to Discuss Direct to Consumer Issues in Canadian Grapes to Wine.