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Ontario Protectionism Hurts B.C. Wine Sales

25/09/2014


Did you know that B.C. and Ontario wines regularly win international awards, including at competitions in France, Britain, California and Switzerland? Have you ever had the opportunity to taste a B.C. award-winning wine, like an ice wine or Pinot Gris?

If you live east of Alberta, you probably haven’t. That’s because with over 250 licensed wineries producing 100 per cent B.C. wine, only a handful of labels make it into retail stores and restaurants east of Alberta.

The Canadian wine industry contributes $6.8 billion annually to the national economy, according to a 2013 report. Yet for most Canadians, unless they have visited the wine regions in B.C. or Ontario, they are likely unaware that the Canadian wine industry produces world-class wine because of long-standing trade barriers.

But the problem is being perpetuated by some players more than others. While B.C. has encouraged open exchange with Ontario and other provinces, allowing B.C. residents to purchase Ontario wine, Ontario hasn’t been so quick to reciprocate, even though Ontario wineries have gone on the record in support of opening provincial borders for wine sales.

Interprovincial trade barriers continue to make it exceedingly difficult to sell wines outside of the province they are produced in, and many Canadians have an easier time purchasing international wines than wine produced one or two provinces over. In many other wine-producing regions, this problem would be unheard of — imagine a French citizen living in Burgundy being told they couldn’t legally purchase a wine from Bordeaux — the idea would seem laughable. Here in Canada, the reality is that consumers are limited in the degree to which they can support their own domestic wine industry. 

In 2012, the federal government passed Bill C-311 which amended archaic restrictions in the 1928 Importation of Intoxicating Liquors Act. Honouring the intent of the legislation would increase consumer interest in domestic wine and support the entire Canadian wine industry, strengthening its presence domestically. The amendments should have greased the wheels of exchange and made it easy for consumers to purchase wine across provincial borders without ever leaving their home province and for wineries to broaden their market.

To date, only B.C., Manitoba and most recently Saskatchewan have aligned with the legislation and progress overall has been slow. A widely held belief is that Ontario is the key to national co-operation; once Ontario gets on board, the other provinces still holding out will do the same.

Ontario Premier Kathleen Wynne has stated her intent to review the matter but no commitments have been made. While officials out of Ontario insist the issue is more complicated than supporters of open trade realize, critics argue that the resistance is little more than reluctance to lose the taxes associated with provincial liquor sales conducted with the LCBO.

On the other hand, wineries say the price mark up the LCBO creates is a disincentive for consumers, sometimes almost doubling the cost of a bottle of wine, discouraging interest in Canadian wine instead of fostering a wine culture in a province with so much to offer.

Beth McMahon, vice-president of government and public affairs for the Canadian Vintners Association, noted previously that experience in the U.S. has shown there can be a huge benefit with little hit to governments. In regards to Internet sales McMahon said opening wine trade between states broadened the market for producers and consumers and supported the industry as a whole and accounted for one per cent of total sales — not much of a sacrifice for governments since wineries are geographically positioned to reinvest profits locally.

With open trade expected to benefit producers across the country — including Ontario — and bolster the industry that reinvests into those same provinces, the question remains: When will Ontario support consumers in supporting the Canadian wine industry?

As posted on TheProvince.com