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Grape growers optimistic new federal plan will help farmers

Niagara farmer Matthias Oppenlaender says grape growers are glad the federal government pledged $101 million toward 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 hammered out.

Oppenlaender, who owns Huebel Grapes Estates in Niagara-on-the- Lake, wants confirmation that as the program is phased in next year to replace a tax exemption that’s being phased out, the focus will still be on benefiting wines made from 100 per cent Canadian-grown fruit.

Finance Minister Chrystia Freeland announced the funding last Monday as a replacement for the excise tax exemption on 100 per cent Canadian-made wines the industry has enjoyed since 2006.

That exemption is credited for helping grow the Canadian wine industry.

According to Grape Growers of Ontario — for which Oppenlaender serves as chair — the number of VQA wineries has risen to 183 from 86 since 2006.

“The grapes had to be grown here, the wine had to be made here out of 100 per cent grown Canadian, and then you didn’t pay” the tax, Oppenlaender said. “Which is a very good program for the industry.”

However, Australia went to the World Trade Organization to challenge the exemption as an unfair trade advantage. Canada agreed to eliminate the exemption by April 2022.

If no replacement program was found, it was expected the loss of the exemption would have added at least 50 cents to the cost of every 750- ml bottle of 100 per cent Canadian-made wine.

The two-year $101-million funding program announced last week, which starts after the exemption ends, is seen as a replacement that will stand up to any legal challenges.

Few details have emerged, though, as to just how it will benefit the wine industry.

Oppenlaender said “the program is expanding a bit, as far as we understand, but I don’t know enough of the details.”

“Our focus has to be that the money goes to wine produced out of 100 per cent Canadian-grown grapes. That’s what it (currently is), that’s what gave us a real lift in tonnage and investing in the vineyards and the wineries, because it focused on Canadian first.”

He fears if the program is expanded, it could extend some benefits to wines that use a blend of domestic and imported grapes, which would hurt Canadian growers’ sales.

At his farm, he said, all his product is sold to 10 to 15 wineries.

St. Catharines MP Chris Bittle wouldn’t speculate on what the final program might look like, but said benefits “will only apply to Canadian grapes, that’s an absolute certainty.”

He said he hopes final details on the new program can be wrapped up quickly because “it’s an industry that produces an aged product, so my preference would be to have certainty sooner rather than later.”

He said currently about three-quarters of Ontario wine sold is blended. Those wines are not exempt from the excise tax.

Last week, Ontario Wine Growers president Aaron Dobbin estimated thousands of jobs would have been jeopardized if there was no replacement for the outgoing excise tax exemption.

The $101-million program Freeland confirmed in her budget “is avoiding the looming disaster that we were facing,” he said.

“If we didn’t get something, we were looking at about four million litres of lost wine sales in Ontario alone, and we estimate about 1,300 jobs would have been lost in Ontario and 2,400 nationally.”

Oppenlaender said when the new funding program is finalized, it must be just as supportive of Canadian growers as the tax exemption was.

Otherwise, jobs could still be jeopardized.

“If I don’t have a customer for my grapes, obviously I’ll downsize or get out of business,” he said.

Source : Grape Growers of Ontario

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