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Canadian wine industry applauds $101 M in assistance from federal government

The Canadian wine industry is applauding the federal government for listening to their pleas and providing $101 million of financial assistance in the budget that was revealed on Monday.

The money for the industry, which has suffered during the pandemic, offers assistance over two years, starting in 2022-23, to implement a program for the wine sector that will support wineries in adapting to ongoing and emerging challenges, in line with Canada’s trade obligations.

The Grape Growers of Ontario said they are “encouraged by the Government of Canada’s decision in Budget 2021 to take steps to protect producers of 100 per cent Canadian wine from the impact of the returning excise duty, said Debbie Zimmerman, CEO of the association. “The excise duty exemption on wine made of 100 per cent Canadian-grown fruit has been a significant contributor in growing our domestic industry. In 2006 when the exemption was introduced, there were 86 VQA wineries and now there are 183. We appreciate that the government has listened to the voices of local wineries, grapes growers and winemakers, and recognized the value of our world-class, homegrown 100 per cent Canadian wines.”

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Zimmerman said that the GGO “looks forward to continuing our dialogue to inform the development of a replacement program that will support the ongoing growth and success of our domestic industry. We welcome the opportunity to participate in industry consultations to ensure the proper competitive balance in our highly regulated domestic sector is maintained.”

The Wine Growers Ontario, which represents wineries that produce over 80% of the wine made in Ontario, had praise for the federal government for providing $101 million over two years for a wine support program.

The WGO and partners across the country worked together with senior federal officials to develop a trade legal wine grower support program. In July 2020, the federal government announced that it would terminate the excise duty exemption program, which was implemented in 2006 and supported investment in more than 400 grape wineries, stimulated 40 million litres of new wine production, and in 2020 contributed almost $5 billion annually to the national economy.

“(Monday’s) budget announcement is key to the future success of the Ontario wine industry. The loss of the excise duty exemption would have been devastating without such a program in place,” said CEO of WGO, Aaron Dobbin. “We know how valuable this program is for the future of our industry and we look forward to ensuring that this program is in place long past the two years announced today. That certainty will allow us to continue to invest and grow the 18,000 jobs in our province that rely on our industry.”

Del Rollo, chair of WGO, said: “Over the past year, Wine Growers Ontario, along with our national association and partners in British Columbia, Nova Scotia and Quebec, has worked tirelessly with federal officials to develop a winery support program that is trade legal and will benefit our industry. We will continue to work to get that program put in place.”

The Ontario Craft Wineries association also welcomed the news from the federal government for their support of the Ontario wine and grape sector. “Over the past year , the OCW has worked diligently with industry partners and the federal government to overcome the challenges of losing our excise duty exemption as well as through ongoing COVID-19 restrictions,” said Richard Linley, president of OCW. “It has not been easy. Entire businesses and thousands of rural jobs hung in the balance if actions were not taken on a support program. We are extremely grateful that the federal government has listened and responded to the concerns of our members with a proposed program to stabilize the sector. OCW looks forward to working closely with Agriculture and Agri-Food and other stakeholders on the detailed development of the program this summer, which will help future recovery and growth in Ontario’s wine and grape sector.”

Wine Growers British Columbia, the voice of the B.C. wine industry, also applauded the winery support program.

In a news release, the group said it supports Wine Growers Canada’s (WGC) recommendation that the federal government implement its Wine Grower Quality Enhancement Program to provide foundational sustainability “to invest in our future and compete on a fair equitable basis with other wine regions globally. The WGC program has the support of all wine growers across Canada that will create thousand of jobs and a positive return on investment for the Canadian economy. This will support wine growers across Canada as they deal with the impacts of the pandemic and the pending repeal of the excise duty exemption program, which was successful in supporting investment in more than 400 grape wineries, stimulating 40 million litres of new wine production, and contributing almost $5 billion annually to the national economy,” the release said.

“Today’s budget announcement is a monumental investment in the future success of British Columbia’s wine industry and the province’s highest value-added agri-food beverage,” said Miles Prodan, President and CEO, Wine Growers British Columbia. “The new program will support every winery across British Columbia and provide economic certainty, stimulate millions of dollars of investment and create thousands of winery, grape grower and tourism jobs across the province,” he said.

“The winery support program in (the budget) will allow wineries in B.C. to come out of this pandemic recovery strong. The program provides certainty for future investments in many wine businesses and the rural communities we help to support,” Tony Stewart, CEO of Quails’ Gate Estate Winery said.

Quick Facts

• Introduced in 2006, the current excise duty exemption on wine made of 100 per cent Canadian-grown fruit has been a significant contributor in growing Canada’s domestic wine industry. It’s led to an annual contribution of about $9 billion in jobs, tourism, taxes and business income.

• In 2006 in Ontario, there were 86 VQA wineries. Today there are 183 VQA wineries.

• As a result of the federal government’s recent agreement with Australia regarding that country’s trade challenge against Canada at the World Trade Organization, the long-standing federal excise duty exemption on wine made of 100 per cent Canadian-grown fruit will be repealed by June 30, 2022.

• Nationally, 700 wineries and 37,000 jobs hinge on the outcome of the decision regarding the excise tax. Roughly two thirds of the country’s sector is based in Ontario.