Canada’s wine sector, valued at over $10 billion annually, is poised for substantial growth, according to a new report by Deloitte, commissioned by the Wine Growers of Canada. The study suggests that by eliminating domestic trade barriers and encouraging Canadians to purchase at least 51 per cent of their wine from local producers over the next 15 years, the industry could expand its worth to approximately $13.7 billion. This increase could also have significant positive effects on associated sectors, such as shipping and tourism.
Unlocking Growth Potential
For almost two decades, the Canadian wine market has stagnated at about 40 per cent domestic consumption. Dan Paszkowski, president of the Wine Growers of Canada, emphasised that achieving the target of 51 per cent is not merely about boosting overall wine sales. Instead, it’s about gradually displacing imported wines. “We’re not going to be reaching 51 per cent by increasing wine sales across Canada. We’re going to be increasing to 51 per cent by displacing imports over time,” he stated in an interview.
The report highlights a trend observed in leading wine-producing countries, where domestic products account for more than half of wine sales. For instance, in France, local wines dominate a staggering 83 per cent of the market. This raises the question of why Canada, with its rich viticultural heritage, lags behind.
Breaking Down Provincial Barriers
One of the major changes advocated by the Canadian wine industry is the ability for consumers to purchase wine directly from out-of-province wineries. Currently, retail stores often cannot stock every available product, focusing instead on high-volume sales, which disadvantages smaller producers. Paszkowski noted, “We’re probably the only retail sector in the country that has to say no to a consumer when they come and visit our winery and say, ‘Can you ship this to my home province?’”
The situation starkly contrasts with the United States, where direct-to-consumer shipping is permitted in 48 states, fostering market growth and contributing to the California wine sector’s impressive valuation of approximately US$67.5 billion in 2024.
Carl Sparkes, owner of Nova Scotia’s Devonian Coast Wineries, expressed frustrations over the current restrictions. He recounted how he once shipped a case of his wine to every premier, reminding them of the constitutional provision for free movement of agricultural products across provincial lines. “As a principle, any Canadian should be able to order directly,” he asserted. “It’s just wrong that they can order so much from Amazon yet cannot obtain a bottle of wine from next door.”
The Path Forward
Although the federal government has lifted many restrictions on interprovincial alcohol trade, provincial limitations persist. Currently, only British Columbia, Manitoba, and Nova Scotia allow unrestricted direct-to-consumer wine shipments from other provinces. Some provinces have initiated agreements or are considering changes, spurred by recent trade dynamics, including Alberta’s arrangement with B.C. and Ontario’s memorandum with Nova Scotia signed this spring. New Brunswick and P.E.I. have also introduced pending legislation to facilitate these sales.
In 2022, ten provinces and territories signed a memorandum of understanding to explore a direct-to-consumer system. Paszkowski anticipates forthcoming announcements regarding a fully-integrated market that would streamline shipping, compliance, and tax collection.
The Canadian wine industry is primarily based in four key regions: the Okanagan Valley in British Columbia, the Niagara region in Ontario, Quebec’s Eastern Townships, and the Annapolis Valley in Nova Scotia. The report indicates that every bottle of Canadian wine generates approximately $89.99 for the economy, compared to just $15.73 for imported bottles, highlighting the broader benefits of supporting local vineyards.
Taxation and Competitive Challenges
The sector also seeks to address an uncompetitive federal excise tax structure, which often renders foreign wines more affordable than local options. Canadian wine producers face an excise tax of 74.5 cents per litre for wines with an alcohol content exceeding seven per cent. By contrast, the United States imposes a tax of about 39 cents per litre, while France’s rate is a mere six cents. Paszkowski pointed out that a winery in Niagara may end up paying hundreds of thousands of dollars more in taxes than its American counterpart, creating a significant competitive disadvantage.
In response to these challenges, the federal government established the $166-million Wine Sector Support Programme in 2022, which was renewed in 2024 with an additional $177 million. However, with the programme nearing its final year, there are calls for further long-term investment assurance. Sparkes emphasised the need for stable, predictable policies that encourage wineries to invest in the future. “What we plant today won’t produce for years. That level of predictability is critical,” he asserted.
Why it Matters
The potential growth of Canada’s wine sector is not just about boosting economic figures; it represents a broader opportunity for cultural enrichment and tourism expansion. By fostering a vibrant local wine industry, Canada can enhance its agricultural landscape, create jobs, and improve consumer choice. As the demand for locally produced goods continues to rise, removing barriers to domestic trade would not only benefit wineries but also contribute positively to the national economy and strengthen community ties. A thriving wine industry could become a cornerstone of Canada’s cultural identity, inviting both Canadians and international visitors to savour the diverse flavours of homegrown wines.
