THE BLOG

Why the LCBO Doesn't Want You Buying From Wineries

06/29/2012 11:59 EDT | Updated 08/29/2012 05:12 EDT

OK! Bill C-311 has received Royal Assent and Canadian provinces are now free to set their own policies for wine trade without the federal government imposing any rules of its own.

So what's changed? Well, ummm -- and this is a bit awkward -- but nothing really.

"It really hasn't opened up anything," said one Ontario winery owner who asked his name wasn't used. "But it's a great PR story for the federal government."

The bill that did away with an antiquated federal law banning the shipment of alcohol between provinces did pry open the rusty flood gates to allow, at least federally, the passage of wines over provincial borders; but the key word here is "provincial."

Even though the feds are on board to do away with the prohibition-era law, provinces are still only giving an inch, allowing for tourists from other provinces to bring back some wine and alcohol with them, but that's where the buck stops.

"The bottom line is, if you're visiting a winery in B.C. and you're from Ontario, you can bring back wine with you. If you're back in Toronto and you want that wine again, you have to order it through the LCBO," said Rowland Dunning Executive Director of the Canadian Association of Liquor Jurisdictions -- the body that represents the interests of all provincial liquor control boards.

And would you like to know why?

Taxes.

Dunning says provincial coffers could stand to lose something to the tune of $300 million a year in potential tax revenue if wineries were allowed to sell directly to out of province consumers.

"The wineries just want to avoid taxes," Dunning said, noting $300-million could wipe out the debt of cash-strapped Toronto. "We don't think ecommerce is necessary because we can get it for you -- if the winery will sell it to us."

Many wineries opt out of selling to the provincial liquor boards, because they don't produce the mass quantities needed to stock shelves, and it can be more profitable to sell it directly from the winery, even if that means only having access to in-province consumers only.

"They [the liquor boards] simply want their pound of flesh," complained the anonymous winery owner. "[Not allowing direct shipping between wineries and consumers] It's short sighted. It would give an advantage to Canadian wineries. Why would you want to restrict your domestic industry? I have no problem paying taxes. At the heart of this matter, let's be clear: It's about preserving the unionized monopolies."

In Ontario alone, the wine industry employs nearly 7,000 people, brings in one million visitors annually and for every bottle of wine sold, puts back more than $12 in value-adds to the Ontario economy for an overall total of about $200-million per year.

The passage of bill C-311 is a small, but important step, notes Dan Albas, the Okanagan-Coquihalla MP who proposed bill C-311 in the House of Commons. In an impassioned blog, on his website he wrote he would keep pushing this issue, and tore down the tax argument provincial liquor boards are using, writing that the HST attached to the sale and shipment of each wine goes farther for tax payers than what the monopolies hand over after their high administrative costs are paid.

While we believe bill C-311 has shone a positive light on this issue, making Canadians more aware of the pedantic legalities surrounding out of province wine, and like Albas we think this bill has made a small, but important step.

However, we find it outrageous that you can buy a firearm in this country and have it shipped across provincial borders, directly to your door, why does wine, beer and spirits raise the alarm?

The current system favours imported wines over domestic, which hurts local industry and local jobs. It's about time all levels of government bring about changes that will see Canadian wineries thrive and compete on an international scale, starting right here at home.