Question Period Note: Australian challenge of provincial and federal wine measures

On April 21, 2021, Canada and Australia announced the settlement of the Quebec measure targeted in Australia's WTO challenge against Canadian wine measures, thus putting an end to the dispute.

• The Government of Canada worked closely with the provinces and industry to reach an understanding to settle Australia's WTO challenge on wine.
• We heard firsthand from industry the uncertainty this dispute caused
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• Satisfied to see this dispute with a close ally and trading partner resolved.
• The Government is committed to ensuring the wine industry's hard-earned success continues.

On January 12, 2018, Australia formally requested consultations with Canada under the WTO dispute settlement mechanism on a range of Canadian federal and provincial wine measures that it alleges are inconsistent with Canada's national treatment obligations under the General Agreement on Tariffs and Trade (GATT).

Consultations failed to resolve the matter and on Sept. 26, 2018, a WTO dispute settlement panel was established.

On April 5, 2019 Minister Carr exchanged letters with his Australian counterpart reproducing the commitment that Canada made to the United States under CUSMA regarding the sale of B.C. wine in grocery stores. The proceedings continued against the remaining measures which included distribution at the provincial level, as well as taxation measures at both the federal and provincial level.

On July 27, 2020, Canada and Australia publically announced an agreement regarding measures maintained by the federal government, Nova Scotia, and Ontario, thereby ceasing litigation regarding these measures.

In the agreement with Australia, the Government of Canada agreed to repeal the federal excise duty exemption on wine comprised of 100% Canadian agricultural products, as set out in subsection 135(2) of the Excise Act 2001, by June 30, 2022. The Government of Canada committed to supporting the industry in managing the impacts of the trade challenge. As a result, and in anticipation of the repeal of the federal excise duty exemption, stakeholders have put forth support program proposals to Agriculture and Agri-Food Canada aimed at providing support for Canadian winemakers and grape growers.

Canada and Australia announced the complete settlement of the wine dispute on April 21, 2020. Confirmation of the agreement regarding the Quebec measure was published in the Quebec Gazette on April 21, 2020.
The final step in officially closing the wine dispute with Australia will be for the parties to notify the WTO that a mutually agreed solution (MAS) has been reached, this will occur in the coming weeks, and will very likely take the form of a joint written communication to the DSB from the Canadian and Australian ambassadors to the WTO.

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