Canada’s wine sector, valued at over £8 billion annually, is poised for significant growth, with industry advocates suggesting that removing domestic trade restrictions could inject billions into the national economy. A recent report by Deloitte, commissioned by the Wine Growers of Canada, indicates that if Canadians increase their purchases of local wines to 51 per cent over the next 15 years, the sector’s worth could rise to £10.5 billion. This projection includes spinoff benefits from related industries such as shipping and tourism, which are crucial for a sector that has remained stagnant at approximately 40 per cent domestic market share for nearly two decades.
Unlocking Domestic Potential
Dan Paszkowski, president of the Wine Growers of Canada, emphasised the necessity of displacing imported wines to achieve the 51 per cent target. “We’re not going to get to 51 per cent by increasing wine sales across Canada,” he stated. “We will reach that mark by gradually reducing imports.” This shift is not merely aspirational; it reflects a global trend where domestic wines dominate sales. For instance, in France, local wines account for 83 per cent of sales, highlighting the potential for Canadian wines to capture a larger share of their home market.
A critical aspect of this growth strategy involves allowing consumers to purchase directly from wineries located in different provinces. Paszkowski pointed out the limitations faced by small- and mid-sized wineries, which often cannot meet the large volume demands of retail stores. “We’re probably the only retail sector in the country that has to say no to customers who visit our winery and wish to have products shipped home,” he lamented, noting that this restriction hampers industry growth despite the four million tourists who visit Canadian wineries annually.
Comparison with U.S. Regulations
In stark contrast, the United States permits direct-to-consumer wine shipping in 48 states, facilitating the growth of its wine industry, which is projected to be worth approximately £52 billion by 2024. Carl Sparkes, owner of Nova Scotia’s Devonian Coast Wineries, cited an instance where he sent a case of wine to each provincial premier, reminding them of Canada’s constitutional provision for the free movement of agricultural products across provincial boundaries. “It’s just wrong that Canadians can order virtually anything online but can’t have a bottle of local wine shipped from the next province over,” Sparkes remarked.
While the federal government has made strides in easing alcohol trade restrictions between provinces, significant provincial barriers still exist. Currently, only British Columbia, Manitoba, and Nova Scotia allow unrestricted direct-to-consumer wine shipments. Other provinces are beginning to relax their rules, with Alberta establishing agreements with British Columbia and Ontario signing a memorandum of understanding with Nova Scotia. Meanwhile, New Brunswick and P.E.I. have introduced pending legislation aimed at improving interprovincial wine trade.
Economic Impact of Local Wines
The Deloitte report underscores the economic significance of supporting local wine producers. Each bottle of 100 per cent Canadian wine generates about £72 for the economy, compared to just £13 for imported wines. This economic impact extends beyond the wineries themselves, benefitting tourism, culture, and transportation sectors as well.
Additionally, wine growers are advocating for a reassessment of the federal excise tax structure. Currently, the excise tax for Canadian wine with more than 7 per cent alcohol content stands at £0.44 per litre, significantly higher than the £0.23 per litre in the United States and just £0.04 in France. Paszkowski highlighted that this tax disparity disadvantages Canadian producers, making it challenging for them to compete effectively in the market.
The Need for Continued Investment
In response to these challenges, the Canadian government launched a £138 million Wine Sector Support Program in 2022, which was renewed in 2024 with an additional £146 million. However, this programme is approaching its final year, and industry stakeholders are urging for a long-term commitment to support sustainable growth. “If we’re serious about expanding the sector and keeping investments local, we need stable, predictable policies that inspire confidence,” Sparkes asserted. “What we plant today won’t bear fruit for years, so predictability is crucial for our long-term business.”
Why it Matters
The Canadian wine industry stands at a crossroads, with the potential for substantial economic growth hinging on the removal of archaic trade barriers and the establishment of a fairer tax structure. As consumer preferences shift towards local products, the sector could not only enhance its market share but also contribute significantly to the national economy. In a competitive global landscape, ensuring that Canadian wineries can thrive is essential for preserving local culture, tourism, and economic resilience.
