The Canadian wine industry, currently valued at over £8 billion annually, is advocating for significant policy changes that could unlock billions more for the national economy. A recent Deloitte report, commissioned by the Wine Growers of Canada, suggests that allowing Canadians to purchase at least 51 per cent of their wine from local producers could elevate the sector’s value from £8.1 billion to approximately £10.5 billion over the next 15 years. The report highlights that the industry has stagnated at around 40 per cent domestic market share for nearly two decades, primarily due to restrictive provincial trade regulations.
The Push for Domestic Consumption
Dan Paszkowski, president of the Wine Growers of Canada, emphasised that achieving this 51 per cent target will not stem from an overall increase in wine consumption but rather from gradually displacing imported wines. In an interview, he noted, “We’re not going to reach 51 per cent by increasing wine sales across Canada. We’re going to increase to 51 per cent by displacing imports over time.”
The report underscores a stark contrast with leading wine-producing nations, where domestic products dominate sales. In France, for instance, 83 per cent of wine purchases are local. This sets a benchmark that Canadian producers aspire to reach.
Overcoming Provincial Trade Barriers
A key recommendation from the report is to allow consumers to buy wine directly from out-of-province wineries. Currently, many retail outlets do not stock diverse local wines due to volume requirements, which disproportionately impacts smaller producers. Paszkowski highlighted the absurdity of the situation, stating, “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?’ We can’t legally do it yet.”
In contrast, the U.S. wine market benefits from direct shipping in 48 states, significantly contributing to the California wine industry’s valuation of approximately £51.5 billion in 2024. Local winemaker Carl Sparkes of Nova Scotia’s Devonian Coast Wineries recounted his experience shipping wine to premiers, underscoring the need for legislative change. “As a principle, any Canadian should be able to order directly,” he asserted, pointing out the irony that consumers can easily order international products online but face hurdles acquiring local wine.
Current State and Future Outlook
While the federal government has made strides in removing some alcohol trade restrictions, provincial laws remain a significant barrier. Presently, only British Columbia, Manitoba, and Nova Scotia permit unrestricted direct-to-consumer shipments from other provinces. Some provinces have made tentative agreements, such as Alberta’s pact with British Columbia and Ontario’s recent memorandum with Nova Scotia, while others, like New Brunswick and Prince Edward Island, are progressing towards similar reforms.
The report reveals that last year, ten provinces and territories signed a memorandum of understanding to explore a more integrated direct-to-consumer system. Paszkowski anticipates an upcoming announcement regarding the development of a unified market addressing shipping, compliance, and tax collection issues.
Economic Benefits of Supporting Local Wine
Canada’s wine industry is concentrated in four primary regions: the Okanagan Valley in British Columbia, the Niagara region in Ontario, Quebec’s Eastern Townships, and the Annapolis Valley in Nova Scotia. Each bottle of Canadian wine generates an economic impact of approximately £72, significantly higher than the £12 associated with imported bottles. This economic benefit extends beyond the wineries themselves, bolstering tourism and cultural sectors.
Moreover, the wine industry is urging a reassessment of the federal excise tax structure, which currently places local producers at a disadvantage. The excise tax for Canadian wine over seven per cent alcohol is £0.55 per litre, compared to £0.30 in the U.S. and a mere £0.04 in France. Paszkowski pointed out the substantial tax burden faced by Canadian wineries compared to their American counterparts, which hampers their competitiveness.
In response to the industry’s challenges, the federal government initiated the £133 million Wine Sector Support Programme in 2022, which was renewed in 2024 with an additional £145 million. However, as this funding enters its final year, industry stakeholders are advocating for ongoing financial support to ensure long-term investment stability. Sparkes articulated the necessity for predictable policies, stating, “If we’re serious about growing the sector and keeping the investment here at home, we need stable, predictable policy that gives wineries the confidence to invest here.”
Why it Matters
The Canadian wine industry stands at a crossroads, where strategic reforms could significantly enhance its contribution to the national economy. By dismantling outdated trade barriers and fostering a more competitive environment for local producers, Canada could not only revive its wine sector but also boost related industries like tourism and agriculture. As the industry advocates for necessary policy changes, the potential for economic growth is immense, promising a bright future for Canadian wine.