Question Period Note: SUPPORT FOR THE WINE SECTOR

Q1 - How is the department supporting the wine sector in its ongoing challenges? Q2 – Will the government modify the Wine Sector Support Program to broaden its support for the wine sector writ large (e.g., grape growers)? Q3 – Will the government develop a national wine strategy?

R.1 - Through the Wine Sector Support Program, delivered by Agriculture and Agri-Food Canada, the Government will provide up to $343 million to eligible Canadian wine producers over five years (2022-23 to 2026-27) to help the sector adapt to ongoing challenges, over the short-term. The program is set to expire on March 31, 2027.

In addition to the Wine Sector Support Program, grape growers and wine producers continue to have access to the suite of business risk management programs, including AgriStability, AgriInsurance, and AgriInvest. These programs can help protect producers against income declines and production losses, as well as navigate significant risks that threaten the viability of their operations.

The Sustainable Canadian Agricultural Partnership offers a range of federal-only programming (i.e., AgriScience, AgriAssurance and AgriMarketing) to organizations delivering national projects that support Canada’s agricultural sector, including wine. For example, the AgriAssurance Program approved up to $836,220 in funding over five years to the Canadian Grapevine Certification Network, to provide Canadian grape growers and wineries with the material necessary to replant or plant certified virus-free grapevines in their vineyards to ensure the long-term viability of the Canadian grape and wine sectors.

Agriculture and Agri-Food Canada also has a robust online resource tool, AgPal, that includes a comprehensive list of programs, including cost-shared programs, that may provide financial support to producers in Canada’s wine sector. R.2 - At this time, Agriculture and Agri-Food Canada is not seeking to expand the Wine Sector Support Program, as any such modification could have unintended implications for the market, Canada’s trade policy, and existing supply chains. The Program is set to expire on March 31, 2027. R.3 - The Government is actively considering the best way to ensure that our domestic sector is well positioned to grow in a way that supports resiliency and aligns with international trade objectives.

There are approximately 850 wineries in Canada, and the sector is concentrated in British Columbia, Ontario, Quebec, and Nova Scotia.
On January 12, 2018, Australia formally requested consultations with Canada under the World Trade Organization (WTO) dispute settlement mechanism on a range of Canadian federal and provincial (British Columbia, Ontario, Quebec and Nova Scotia) wine measures.
At the federal level, the dispute implicated the federal excise duty exemption for 100 per cent Canadian wine, introduced in the 2006 Federal Budget to stimulate growth and improve the competitiveness of the Canadian wine industry. The exemption applied to wine (including cider, wine coolers, fruit wines and sake) produced in Canada and composed wholly of agricultural or plant products grown in Canada.
At the provincial level, the dispute covered a number of measures involving markups, taxes and charges applied by provincial liquor boards. Canadian wine producers called for a negotiated resolution to the dispute.
On April 21, 2021, Canada and Australia reached a mutually agreed solution regarding Australia’s claims about the disputed Quebec measures on the sale of wine. On April 22, 2021, Australia officially withdrew its claim, and both parties requested the Panel to refrain from making any findings or recommendations with respect to these measures. The wine industry requested the initiation of settlement discussions and supported the mutually agreed solution.
On June 30, 2022, the Government of Canada repealed the federal excise duty exemption on wine, as set out in subsection 135(2) of the Excise Act, 2001.
Canadian wine industry representatives voiced concerns regarding the detrimental impacts that the elimination of the excise tax exemption would have on Canadian wineries, requesting that the Government of Canada provide support programming.
Budget 2021 proposed to provide $101 million over two years, starting in 2022-23, to Agriculture and Agri-Food Canada, to implement a program to help the wine sector adapt to ongoing and emerging challenges, in line with Canada’s trade obligations. Stakeholders indicated that the $101 million was $34 million short of the Budget 2022 estimate of impacts of the repeal of the excise tax ($135 million), and that a two-year program would not provide the certainty needed to support investments. On June 16, 2022, the Government of Canada approved an additional $65 million in grant funding for the Program, for a total of $166.2 million over two years (2022-23 and 2023-24).
On March 1, 2024, the Government of Canada announced an extension to the Program, investing up to an additional $177 million over the following three years (2024-25 to 2026-27).
To date, approximately $213 million in grant funding has been paid out:
• In 2022-23, 454 eligible recipients received approximately $79.55 million
• In 2023-24, 448 eligible recipients received approximately $78.55 million
• In 2024-25, 477 eligible recipients received approximately $55 million

The application period for the 2025-26 program year runs from March 3, 2025, to May 23, 2025 (12 weeks).
Lastly, some participants in the wine sector have expressed a desire to see the government develop a national wine strategy. In this respect, departments are actively considering the best way to ensure our domestic sector is well positioned to grow in a way that supports resiliency and aligns with international trade objectives.

• The Government recognizes the wine sector’s important economic contributions, including providing business opportunities and jobs for grape growers and wine makers across Canada.

• To ensure continued support for the sector, on March 1, 2024, the Government announced an extension to the Wine Sector Support Program, investing up to an additional $177 million over three years, ending on March 31, 2027.

• The $343 million, five-year program helps federally licensed Canadian wineries adapt to ongoing and emerging challenges impacting their financial resilience and competitiveness by providing grants based on their previous year’s wine production.

• For 2025-26, the Wine Sector Support Program will provide up to $55 million to eligible wine producers. The application intake period opened on March 3, 2025, and closes on May 23, 2025.