Taxes on Ontario wine are among the highest in the world, hampering the growth of this sector. Additionally, government financial supports for the wine industry are significantly lower than in other wine regions of the world, and Ontario wine has a much lower share of its own market than other world wines.

The wine industry is a major employer nationally and locally, supporting over 45,000 Canadian and 7,200 Niagara full-time equivalent jobs. It is an important driver for the tourism industry, which employs 40,000 people here – one in ten jobs – and almost 700,000 direct and over 2 million indirect jobs nationally. But Niagara’s wine region is young and relatively small compared to other regions in the world, and has not yet developed the resilience of regions like Bordeaux or Tuscany. As a relatively small and newly-established player, it risks being swamped even in its own domestic market.

France, Italy, Spain, and Germany impose no excise tax on wine, and while the UK and Ireland’s excise taxes are higher in absolute terms, they are flat rates without percentage-of-price or volume-based surtaxes stacked on top. The multi-layered Ontario taxation regime on wine makes it one of the highest-taxed in the world, and while its individual components are sometimes smaller than in Europe or the USA, other jurisdictions don’t stack taxes the way Ontario does, adding federal excise duty, provincial basic tax, volume tax, environmental tax, and HST.

While the Government of Canada has lowered the federal excise tax and the Government of Ontario has eliminated basic tax on wine purchased on-site at wineries (at the GNCC’s urging), these other taxes still remain, slowing wine sales.

In Ontario, 44.4% of all wine sold is at least partly VQA, and only 12.1% of total wine sold is 100% VQA. In the USA, 60% of wine sold is from California, 65-70% of wine sold in France is French (with the balance coming from other EU producers), and 85% of Australian wine sales are domestic. Not only do Ontario wines have lower market penetration overseas, they also have much lower penetration of their own domestic market.

The GNCC asks the governments of Canada and Ontario to reduce wine taxes to a level comparable with the rest of the world. While at least 40% of LCBO shelf space must be reserved for VQA wines and 10% for small wineries, as privatization of wine retail continues, the GNCC also asks for similar safeguards to be applied to private retail so that the growing Niagara wine industry can be sheltered and allowed to grow in the face of substantial foreign competition.

2023-ongoing