Canada’s wine industry, currently valued at over $10 billion annually, is advocating for strategic changes that could significantly enhance its economic contribution. A recent report from Deloitte, commissioned by the Wine Growers of Canada, indicates that if Canadians increased their purchases of domestic wines to at least 51 per cent over the next 15 years, the sector’s value could soar to approximately $13.7 billion. This growth would not only benefit wineries but also create a ripple effect in related industries such as shipping and tourism.
The Case for Domestic Wine Consumption
For nearly two decades, the domestic market penetration of Canadian wine has stagnated at around 40 per cent. Dan Paszkowski, president of the Wine Growers of Canada, emphasised that the path to achieving a 51 per cent market share lies not in merely increasing overall wine sales but rather in gradually displacing imports.
“In leading wine-producing nations, domestic products account for more than half of sales,” Paszkowski pointed out, highlighting that in France, for example, consumers choose local wines 83 per cent of the time.
Breaking Down Barriers
One major reform the industry is advocating for is the ability for consumers to purchase wine directly from out-of-province wineries. Currently, many retail stores cannot accommodate smaller wineries that lack the capacity to produce large volumes. Paszkowski noted, “We’re probably the only retail sector in the country that has to say no to a consumer when they ask if we can ship wine to their home province.” This limitation is particularly detrimental, given that four million tourists visit Canadian wineries each year.
In contrast, the United States allows direct-to-consumer shipping in 48 states, a system that has empowered producers and significantly boosted the value of California’s wine sector to around US$67.5 billion as of 2024.
Provincial Restrictions and Recent Developments
While the federal government has largely lifted restrictions on alcohol trade between provinces, many provincial barriers remain. Currently, only British Columbia, Manitoba, and Nova Scotia permit unrestricted direct-to-consumer wine shipments from other regions. Other provinces have made incremental progress, with Alberta establishing an agreement with B.C. for mutual sales, and Ontario signing a memorandum of understanding with Nova Scotia earlier this spring.
Last year, a collective of ten provinces and territories signed a memorandum committing to explore a direct-to-consumer framework. Paszkowski anticipates that an announcement regarding the establishment of a fully integrated market addressing shipping, compliance, and tax matters will come soon.
Economic Impact of Canadian Wine
The report underscores that each bottle of 100 per cent Canadian wine contributes approximately $89.99 to the economy, in stark contrast to the mere $15.73 generated by imported wines. This economic benefit extends beyond the wineries themselves, supporting the broader culture, tourism, and transportation sectors.
Additionally, wine growers are lobbying for a review of the federal excise tax structure, which they argue puts Canadian wines at a competitive disadvantage. The excise tax on local wines exceeding seven per cent alcohol currently stands at 74.5 cents per litre, compared to about 39 cents in the U.S. and a mere six cents in France.
Paszkowski pointed out that a winery in the Niagara region could pay hundreds of thousands of dollars more in taxes than a similar facility across the border, stifling competitiveness and growth.
The Need for Long-Term Stability
In 2022, the Canadian government launched the $166-million Wine Sector Support Program to assist the industry in navigating challenges. This programme was renewed in 2024 with an additional $177 million but is now in its final year. The wine sector is urging for further renewal and emphasises the need for long-term investment certainty to foster growth.
“If we’re serious about expanding the sector and retaining investment domestically, we need stable and predictable policies that inspire confidence in wineries,” Sparkes remarked. “We’re in a long-term business. What we plant today won’t yield fruit for years, making predictability crucial.”
Why it Matters
The future of Canada’s wine industry holds significant implications for the national economy. By fostering a culture of domestic consumption and dismantling existing trade barriers, the sector could not only thrive but also create a multitude of jobs and bolster connected industries. As consumers increasingly seek local products, the potential for economic growth through strategic policy changes becomes not just a possibility but a necessity for the sustainability of Canadian wine.
