Canada’s wine industry, currently valued at over £8 billion, is calling for strategic changes to domestic trade regulations that could potentially inject billions more into the national economy. A recent report by Deloitte, commissioned by the Wine Growers of Canada, underscores the importance of increasing Canadian wine consumption to at least 51 per cent over the next 15 years. This shift would elevate the sector’s worth to approximately £10.5 billion, encompassing benefits from ancillary industries such as tourism and logistics.
A Call for Change in Domestic Consumption
The report highlights that the Canadian wine market has stagnated at around 40 per cent domestic consumption for nearly two decades. Dan Paszkowski, president of the Wine Growers of Canada, emphasised that achieving the target of 51 per cent would not merely rely on boosting overall sales but rather on gradually reducing the volume of imported wines.
“We won’t reach that 51 per cent by simply increasing wine sales across Canada. It will require us to displace imports over time,” Paszkowski noted in a recent interview.
This goal mirrors trends in leading wine-producing nations, where local products dominate sales. For example, in France, domestic wines account for 83 per cent of the market.
Breaking Down Provincial Barriers
One of the primary recommendations from the report is the removal of provincial trade barriers that currently hinder consumers from purchasing wines directly from wineries outside their home provinces. Paszkowski pointed out the frustration for both producers and consumers: “As a retail sector, we often have to decline requests from visitors asking if we can ship wine to their home province. It’s a missed opportunity for growth, especially since we attract four million tourists to our wineries annually.”
In the United States, direct-to-consumer shipping is permitted in 48 states, a policy that has significantly bolstered the value of California’s wine sector to approximately £53 billion. Canadian wineries are advocating for similar reforms, allowing them to tap into a broader market.
Current Regulatory Landscape
Despite some progress, provincial restrictions still pose a challenge. Only British Columbia, Manitoba, and Nova Scotia allow unrestricted direct-to-consumer wine shipments from other provinces. Other provinces have initiated discussions or established limited agreements, such as Alberta’s partnership with British Columbia and Ontario’s memorandum with Nova Scotia.
In a bid for further progress, last year, 10 provinces and territories signed a memorandum of understanding to explore the establishment of a comprehensive direct-to-consumer system. This initiative is expected to tackle harmonisation issues related to shipping, compliance, and tax collection.
Economic Contributions of Canadian Wine
The report also illustrates the broader economic impact of the Canadian wine sector. Each bottle of homegrown wine generates an estimated £76 for the economy, compared to just £13 for imported bottles. The positive effects ripple across various sectors, including culture, tourism, and transportation.
However, the industry also faces challenges related to the federal excise tax structure, which producers argue puts them at a competitive disadvantage. For instance, the excise tax on Canadian wine with more than 7 per cent alcohol is £0.44 per litre, significantly higher than the £0.28 per litre in the U.S. and just £0.05 in France.
Paszkowski explained that this tax burden hampers the ability of Canadian wineries to scale operations and remain competitive.
Support from the Federal Government
In recognition of the challenges faced by the sector, the Canadian government launched the £137 million Wine Sector Support Program in 2022, which was renewed in 2024 with an additional £151 million. However, this programme is currently in its final year, prompting industry leaders to advocate for further long-term investments to foster sustained growth.
“If we are serious about expanding the sector and retaining investment within Canada, we need stable and predictable policies that encourage wineries to invest here,” stated Carl Sparkes, owner of Nova Scotia’s Devonian Coast Wineries. He emphasised the long-term nature of the wine business, underscoring the importance of a reliable framework for future growth.
Why it Matters
The Canadian wine industry’s potential for growth is not just a matter of increasing local production; it is intricately linked to vital economic reforms that could reshape the landscape of domestic trade. By reducing barriers and implementing supportive policies, Canada could significantly enhance its wine market, benefiting not only producers but also the broader economy. As the sector strives for a more competitive edge, the call for change has never been more urgent.
