Niagara farmer Matthias Oppenlaender said winemakers are happy the federal government pledged $ 101 million for the Canadian wine industry in last week’s budget.
But, he said, “the devil is always in the details, right?”
And the details are still being worked out.
Oppenlaender, who owns Huebel Grapes Estates in Niagara-on-the-Lake, wants confirmation that, as the program will be phased in next year to replace a tax exemption that is being phased out, the focus will still be on wines made at 100%. Fruits grown in Canada.
Finance Minister Chrystia Freeland announced the funding last Monday to replace the 100% Canadian wine excise tax exemption the industry has enjoyed since 2006.
This exemption is recognized for having contributed to the growth of the Canadian wine industry.
According to Grape Growers of Ontario – of which Oppenlaender is president – the number of VQA wineries has increased from 86 to 183 since 2006.
“The grapes had to be grown here, the wine had to be produced here from 100% Canadian produce, and then you didn’t pay,” Oppenlaender said. “It’s a very good program for the industry.”
However, Australia has taken to the World Trade Organization to challenge the exemption as an unfair trade advantage. Canada has agreed to eliminate the exemption by April 2022.
If no replacement program was found, it was predicted that the loss of the exemption would have added at least 50 cents to the cost of each 750 ml bottle of 100% Canadian wine.
The two-year, $ 101 million funding program announced last week, which begins after the exemption ends, is seen as a replacement that will stand up to legal challenge.
However, few details have emerged on how this will benefit the wine industry.
Oppenlaender said that “the program is growing a bit, as far as we understand, but I don’t know the details enough.”
“We need to focus on the fact that the money goes to wine made from grapes grown 100% in Canada. This is what it is (currently), this is what has given us a real gain in tonnage and investment in vineyards and wineries, as it has focused on Canada first.
He is concerned that if the program were expanded, it could extend certain benefits to wines that use a blend of domestic and imported grapes, which would hurt sales by Canadian producers.
On his farm, he says, all of his produce is sold to 10 to 15 wineries.
St. Catharines MP Chris Bittle would not speculate on what the final program might look like, but said the benefits “will only apply to Canadian grapes, that’s for sure.”
He said he hopes the final details on the new program can be summarized quickly because “it’s an industry that produces an aged product, so my preference would be to be sure as soon as possible.”
He said that currently about three-quarters of Ontario wine sold is blends. These wines are not exempt from excise tax.
Last week, Ontario Wine Growers President Aaron Dobbin estimated that thousands of jobs would have been at risk had there not been a replacement for the outgoing excise tax exemption.
The $ 101 million program that Freeland confirmed in its budget “averted the impending disaster we faced,” he said.
“If we didn’t get something, we expected about four million liters of wine sales to be lost in Ontario alone, and we estimate that about 1,300 jobs would have been lost in Ontario and 2,400 at national scale.
Oppenlaender said that when the new funding program is finalized, it must be just as favorable to Canadian producers as the tax exemption. Otherwise, jobs could still be at risk.
“If I don’t have a customer for my grapes, I will obviously downsize or go bankrupt,” he says.