Ottawa Update: Bill C-311 and what comes next...

Originally published on the DaninOttawa.com site on June 7, 2012.


With last evenings overwhelming support for Bill C-311, the Bill will now be forwarded onto the Canadian Senate where we have an excellent sponsor in Senator Bob Runciman from the scenic Ontario region of Thousand Islands and Rideau Lakes. We are also fortunate that the Liberal party continues to support the Bill strongly and have also committed to support the Bill in the Senate. Our goal is to see the Bill through the Senate to receive Royal Assent hopefully before the Senate adjourns by the end of this month (June). That being said, the Senate is also a very busy place these days and understandably Government legislation takes priority over private members bills. This is in large part why I was so concerned over the NDP “mistake” in filibustering the Bill last week. Losing one week of very valuable time in the Senate could be the difference between Royal Assent occurring this month or not until October as the Senate does not resume sitting again until late September. I realize that some in the NDP felt that I over reacted to the filibuster but it is important to me and to the Canadian wine industry that we get this done hopefully in June and not lose three of the most valuable months from a wine tourism perspective that the industry depends upon to survive.

The good news is that all of the Senators I have met with thus far have been supportive and I know every effort will be made to try to get this done in June so I remain cautiously but positively optimistic. I also really appreciate the efforts of Senator Bob Runciman in sponsoring the Bill and the continued support from the Liberals largely due to the commendable efforts from Nova Scotia MP Scott Brison. Thinking positively in the event that we can get Royal Assent I believe it is really important that we look at what comes next.   Throughout this process I have long maintained that Bill C-311 is a small but important step in supporting the Canadian wine industry.   Many Provinces, including my own in British Columbia, have cited the existence of IILA as the primary reason why they have not yet announced a personal exemption policy so it is important that Provinces get together on fair and progressive personal exemption policies.

What is fair and progressive?  First let’s recognize the obvious. In Ontario roughly 85% of Premium VQA wines from small wineries is currently sold through the “cellar door”. In British Columbia the number is even higher. It is also important to recognize Canadian retailing options aside from the cellar door for small family run wineries. In BC there are also private liquor stores and VQA stores. In Ontario there is only the LCBO. Sales that are currently “cellar door” (and in BC include private liquor stores) bypass Provincial Liquor Monopolies and provide the maximum possible financial return for wineries, which of course is why such a high percentage is sold this way as few can afford to sell through the Liquor monopolies; they simply lack the volume . I mention all of this to point out that currently as the vast majority of Premium VQA wine is already being sold through the “cellar door” (and in BC at Private Liquor Stores along with VQA stores) there is no appreciable revenue loss for the Liquor Monopolies as they largely do not have that revenue to begin with. As a result there is absolutely no reason NOT to support a winery in being able to directly sell to ANY other Province in Canada. Not to mention there is HST on every bottle of wine sold much as there is also HST on the shipping of wine. Aside from the increased economic activity that results in increased taxation revenues for Government, the HST collected on every bottle of wine sold directly ends up supporting both the Provincial and Federal treasuries. In fact sending HST revenue directly from the winery to the Provincial and Federal Government is actually far more efficient to taxpayers then having it funneled through the bloated and inefficient Liquor control boards who only return a relatively small return  after high administration and operating costs are factored in. I submit this is the primary reason why the Liquor Control Monopoles oppose the bill as ultimately it threatens their control given that the revenue argument they have put forward to date is fundamentally flawed in every aspect.

I apologize that this is such a lengthy post, however it is important to the Canadian wine industry to recognize that we need Provinces to step up and support e-commerce and direct to consumer shipping of wine. Federally the Bill is clear that it is no longer in contravention of IILA to directly transport or ship wine (and cider) across provincial borders. It is now time that we get MLA’s and in particular MPP’s in support of personal exemption policies that promote e-commerce and the Canadian wine industry. Currently over 70% of our domestic wine market is served by imported wines and that is something we must all work together to change. That is our next step and one I will continue to keep working on as it benefits not just the wineries in my riding, but all across our great nation.