The annual meeting of Canada's premiers at the Council of the Federation conference in Charlottetown recently was dominated by the topic of interprovincial trade.
It is argued that Canada's economic growth is stunted by a "perfect storm of dumb" -- as federal Industry Minister James Moore recently described it -- in which the movement of goods and labour are often subject to more barriers between provinces than they are between Canada and our trading partners.
To rectify this, the premiers pledged to complete a comprehensive renewal of the Agreement on Internal Trade by 2016.
It was a joint news conference by the premiers of British Columbia and Saskatchewan that was perhaps the meeting's defining moment and most significant development. B.C. Premier Christy Clark and Saskatchewan's Brad Wall agreed to lift barriers to allow consumers in both provinces to order wines and craft spirits directly from producers, and have them delivered to their doors.
It was great news for B.C.'s wine producers and, according to Wall, for fans of Saskatchewan's makers of pickled vodka, too.
"I am hopeful by the next Council of the Federation, the next meeting of Canada's premiers that Canada's borders will be open for wine right across this country," Clark said. "That is my ambition."
With that statement, Clark gave the direct delivery of wine and craft spirits some much-needed political muscle. Once the legislation is set, other provinces are sure to follow, with Nova Scotia and even Ontario already signalling their intention to allow the shipment of Canadian wine for personal consumption.
The wine industry has been a boon for B.C.'s agriculture and tourism sectors, and its sales growth in premium VQA wines has been impressive at over 10 per cent a year since 2000. When British Columbians buy premium-priced ($20-30 a bottle) wine, two-thirds of them now choose B.C. VQA wine, certified to be made from entirely B.C.-grown grapes.
B.C. welcomes more than 800,000 visitors each year through the wine economy, more than the province drew for the 2010 Winter Olympics. Over 10,000 people in B.C. have jobs as a result of the wine and grape industry.
A 2013 study conducted by the Canadian Vintners Association and British Columbia Wine Institute estimates the wine and grape industry in B.C. has $2 billion in economic impact, jobs, taxes and tourism (and over $6 billion Canada-wide). Modern growing practices have also made the industry increasingly friendly to the surrounding environment.
Given the importance of expanding markets for British Columbia's wines, Clark wisely used the occasion of the meeting to light a fire under this issue. Since Okanagan-Coquihalla MP Dan Albas' Bill C-311 -- allowing interprovincial importation of wine for personal use -- passed into law two years ago, other provinces have not changed rules that would allow wine to flow more freely for fear of losing tax revenue. Only British Columbia and Manitoba so far have no restrictions on these products.
It has been over two decades since B.C.'s wineries first received international gold medals for producing premium wines, yet most Canadian consumers still struggle to get their hands on a bottle. To make matters worse, FedEx has recently given notice it will no longer ship B.C. wine products without provincial regulations that allow for it. Other shipping companies may soon decide to be similarly cautious.
In the U.S., where this marketplace is more advanced, direct delivery accounts for just one per cent of over-all sales. It is the same in B.C., but for the small and medium-sized wineries that form the majority of members of the B.C. Wine Institute, direct delivery provides a revenue stream that could make or break some operations. If provinces are concerned about losing tax revenue, they should take note of online services such as Shipcompliant, which make administering sales tax remittances for each jurisdiction so simple that even the smallest winery operation can play by the rules.
With over 230 grape wineries across the province, and new wine regions emerging on Vancouver Island, in Lillooet, the Kootenays, Kamloops, and in the Garnett Valley near Summerland, B.C.'s wine industry is on track to produce more wine than it can sell into traditional channels.
Liquor-law reforms allowing B.C. VQA wine sales at farmers' markets and in grocery stores are an important first step. With the cooperation of Canada's federal and provincial political leaders we can calm that perfect storm, and find new markets for wine beyond B.C.'s borders.
Mike Klassen is on assignment with the B.C. Wine Institute.
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