Canada’s wine industry, valued at over $10 billion annually, is poised for significant growth, according to a new report from Deloitte. Commissioned by the Wine Growers of Canada, the study suggests that by removing domestic trade barriers and encouraging Canadians to purchase at least 51 per cent of their wine from local producers, the sector could expand its worth to $13.7 billion over the next 15 years. This growth would also benefit related industries such as shipping and tourism, which are crucial to the economy.
A Stagnant Market in Need of Change
Despite its potential, the Canadian wine market has remained stagnant for nearly two decades, with domestic products currently holding around 40 per cent of market share. Dan Paszkowski, president of the Wine Growers of Canada, emphasised that the goal of achieving 51 per cent domestic consumption will not come from increasing overall wine sales but rather from gradually displacing imported wines. He pointed out that countries like France see their local wines dominate consumer choices, with domestic sales accounting for 83 per cent.
One of the critical changes sought by the industry is the ability for consumers to buy directly from wineries located in other provinces. Paszkowski highlighted a significant limitation faced by small- and mid-sized wineries: retail stores often lack the capacity to stock diverse selections and tend to favour larger volumes. This situation prevents many consumers from accessing the wines they would like to purchase after visiting wineries.
Direct-to-Consumer Shipping: A Game Changer
In the United States, the ability to ship wine directly to consumers is permitted in 48 states, which has contributed to the astonishing growth of California’s wine sector, now valued at approximately US$67.5 billion. In contrast, Canadian wineries are often forced to decline orders from visitors wishing to have wine shipped to their home provinces.
Carl Sparkes, owner of Nova Scotia’s Devonian Coast Wineries, recounted his experience of sending a case of his wine to every premier in Canada, underscoring the inconsistency in agricultural product trade across provincial lines. “As a principle, any Canadian should be able to order directly,” Sparkes remarked, noting the irony of Canadians being able to order products globally online but unable to procure locally made wine.
While the federal government has relaxed some restrictions on interprovincial alcohol trade, provincial regulations still pose challenges. As it stands, only British Columbia, Manitoba, and Nova Scotia allow unrestricted direct-to-consumer shipments. Other provinces are beginning to adapt, with Alberta and Ontario establishing agreements to facilitate direct sales, while New Brunswick and Prince Edward Island have pending legislation aimed at similar goals.
Economic Impact of a Thriving Wine Sector
The Deloitte report highlights the substantial economic benefits of supporting local wineries. Each bottle of 100 per cent Canadian wine generates approximately $89.99 for the economy, significantly outpacing the mere $15.73 contributed by imported bottles. The ripple effects extend beyond wineries, bolstering sectors such as tourism and transportation.
However, the industry is also calling for reforms to the federal excise tax structure, which they argue places Canadian wines at a disadvantage. With an excise tax of 74.5 cents per litre for wines exceeding seven per cent alcohol, Canadian producers face a significant burden compared to their counterparts in the U.S. and France, where taxes are considerably lower. This disparity hampers the ability of Canadian wineries to compete effectively, as highlighted by Paszkowski.
In 2022, the federal government introduced the $166-million Wine Sector Support Program, renewed with an additional $177 million in 2024. However, as the programme approaches its conclusion, the industry advocates for further investment and long-term policy stability to foster growth.
Why it Matters
The potential for Canada’s wine sector to grow into a $13.7 billion powerhouse is not just a boon for the industry but a vital opportunity for the broader economy. By removing trade barriers and fostering a more competitive environment, the government can help ensure that local producers thrive, benefiting tourism, agriculture, and regional economies. As consumers increasingly seek local products, a well-supported wine industry could become a cornerstone of Canadian culture and economic resilience.
