44th Parl. 1st Sess.
March 22, 2023 01:00PM
- Mar/22/23 8:12:01 p.m.
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Madam Speaker, my colleague and I may disagree on other politics, but the one thing we can agree is that 100% Canadian-made wines are to the benefit of everyone throughout this country.
When the Conservatives were in power in 2006, they implemented an excise exemption for 100% Canadian-made wines. The sector grew from 300 wineries to over 700, employing 9,000 people. This new escalator tax puts those jobs at risk. The margins in the wine sector, as the member will know, are very slim. Why is the government putting those jobs at risk?
There is a replacement program. The government is going to be generating $390 million because of this new excise tax being applied to Canadian wines, and the government cannot assure the industry that those funds are for it. What are they going to do? Where is that $390 million going? That is what we want to know.
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- Mar/22/23 8:25:40 p.m.
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Madam Speaker, I want to respond to the speech by the Parliamentary Secretary to the Minister for International Trade by focusing specifically on the excise tax issue as it relates to small producers of currant wine or pear cider. As we speak, these producers pay an excise tax that is completely unjustified. Their production is so small that they cannot compete internationally and thus are unfairly taxed.
Quebec has an abundance of artisanal producers who make alcoholic wines or ciders from berries. I am asking my colleague opposite, who sits at the decision-making table, if he will take the opportunity before the next budget to present to the minister the idea of exempting producers of pear cider or berry wines, who currently pay an excise tax.
Thanks to the efforts of the member for Joliette on the last budget, we succeeded in exempting producers of mead and apple cider from the excise tax. Unfortunately, we have not had the time to get to other fruit producers—
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- Mar/22/23 8:59:42 p.m.
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Madam Speaker, as a proud resident of Abitibi-Témiscamingue, I can say that microbreweries are at the heart of our identity.
Whether we choose the Foublonne or Brother John from Trèfle Noir in Rouyn‑Noranda, the stout from Pierre de fée in La Sarre, the Blonde du Frère Moffett from Barbe Broue, in Ville‑Marie, and in Témiscamingue, the Tête de Pioche from the Prospecteur in Val‑d'Or, or simply a beer from a Quebec microbrewery we can pick up at the Chez Gibb cornerstore, there is always a way to have a drink from Abitibi‑Témiscamingue. We even have very good wines produced by the Domaine des Duc. The member for Joliette has even tasted it.
The Conservatives' motion essentially replicates the recommendation in the pre-budget consultation report of the Standing Committee on Finance that called on the government to freeze the federal excise tax on beer, spirits and wine at the 2022 rates for the 2023 and 2024 fiscal years until inflation returns to the Bank of Canada's target range, somewhere between 1% and 3%.
The excise tax on alcohol is a fixed amount by volume. Traditionally, that amount has been occasionally reviewed in a budget implementation bill. Since 2017, the law has set out an automatic escalator formula based on the consumer price index. As a result, the excise tax will go up 6.3%, reflecting the high level of inflation we experienced in 2022.
We will therefore be supporting the Conservative motion because, in the midst of this inflationary surge, hiking a consumption tax that would further increase prices would be ill-advised.
That said, admittedly, the impact of the alcohol excise duty escalator on the final selling price of the product will be rather minimal. We are talking about 1¢ per can of beer.
This motion is not a real response to the inflationary pressure on food prices. Moreover, only the big brewers would truly benefit from the adoption of this motion. Regional microbreweries pay only a fraction of the excise tax and will therefore benefit much less from the tax rate freeze.
In fact, thanks to pressure from the Bloc Québécois in 2006, it is only after 75,000 hectolitres that a microbrewery pays the full tax rate. Under that amount, the cost varies between 10% and 85% of the value of the tax depending on the number of hectolitres produced.
Of the 1,200 breweries in Canada, including the more than 300 in Quebec, only 12 pay the full amount of the excise tax on the majority of their production. Most of these 12 breweries are owned by foreign multinationals.
There are other ways to help microbreweries and their brewmasters, who introduce us to new flavours. For example, the government could exempt microbreweries from paying the tax on the first 10,000 hectolitres, as recommended by the Canadian Craft Brewers Association. In fact, 80% of microbreweries produce less than 2,000 hectolitres per year.
The regulations on the excise tax and its escalator based on capacity made it possible for many craft microbreweries to expand, but the 75,000-hectolitre threshold is now a barrier to their growth, according to the Canadian Craft Brewers Association, which I salute. Another solution that would help our local businesses compete against the big breweries would be to raise the threshold while keeping the rate brackets.
One of the positive aspects of the 2022 spring budget was the excise tax exemption for producers of cider and mead, such as Mieillerie de la Grande Ourse de Saint‑Marc‑de‑Figuery. I salute the member for Joliette for waging and winning this battle. His example should be followed and should provide further inspiration to the government today.
However, the government still has a very restrictive definition of what constitutes cider and mead. Producers who flavour their products with berries or aromatics continue to pay the tax. The Bloc Québécois hopes that all of this will be resolved in the upcoming budget.
We also hope that the excise tax exemption will apply to producers who make wine from other types of fruit, such as blueberries, which promote our region.
In Val‑d'Or, in the riding of my neighbour from Abitibi—Baie-James—Nunavik—Eeyou, there is a a company that specializes in producing distilled beverages. Spiritueux Alpha Tango produces Bravo Charlie and Echo Foxtrot gin, Valentine amaretto, Mission Kosmos vodka and even Mayday liqueur, which is made of black spruce and cinnamon. I want to say that Quebec's microdistilleries are on an impossible mission to the cosmos and that their mayday signal is not receiving an answer from the government. That is a problem. Even their gin is made using cattails. There is something interesting and inspiring about that.
With the excise tax at over $12 per litre of alcohol, a bottle of Alpha Tango gin will cost 25¢ more. That is not a catastrophic increase, but it is in addition to the general increase in prices. As the saying goes, it takes four quarters to make dollar.
The Bloc Québécois would have proposed a different solution than the Conservatives. We need to duplicate the microbrewery model for microdistilleries and impose only a fraction of the tax that is charged to industry giants. That way, a bottle of Grande dérive, from Miellerie de la Grande Ourse, would cost $3 less per bottle instead of the meagre 25¢ being discussed today. This would apply to all those small, local producers who give us a taste of their regional expertise.
I sincerely hope that the government will listen to this suggestion. It would allow our flavour artisans to benefit from a more targeted measure. Nevertheless, I repeat, we will support the Conservative motion because its merit lies in the message that the House is sending to the government.
That being said, the solution to inflation is not simply a measure like this. Microbreweries in Abitibi-Témiscamingue have a long list of problems. In early February, Le Trèfle Noir, a source of pride in Rouyn Noranda, sold its recipes to Lagabière, a microbrewery in Saint-Jean-sur-Richelieu. Owner Alexandre Groulx, whom I commend, said that inflation, the pandemic and the labour shortage led him to sell part of his business.
Our entrepreneurs need more than a band-aid solution. They need concrete solutions. We must ensure that our farmers benefit from measures to help them produce, in particular by creating a special emergency account similar to what was done during the pandemic, which would help ensure they are supported when they need it. There is a significant cash flow crisis within the farming community. Obviously, these are the raw materials used by our microbreweries and microdistilleries. We also need to address the labour shortage in all our regions and the housing crisis.
These two problems are hindering the economic development of Abitibi—Témiscamingue. Some measures do exist, including a tax credit for returning recent graduates, a tax credit for immigrants who choose the regions of Quebec, tax incentives for experienced workers, increased transfers for the creation of social and community housing, and so on. The Bloc Québécois has solutions. We need the government to listen. With the budget only one week away, I hope it is listening.
In conclusion, I invite all parliamentarians to support local microbreweries and microdistilleries, especially those in Abitibi—Témiscamingue. They will see that our products are full of local flavours, and I am sure they will become their favourites. Above all, they will have to enjoy them in moderation.
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- Mar/22/23 9:26:12 p.m.
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Madam Speaker, I really enjoyed my colleague's speech. I had the opportunity to taste the wines produced in his riding. I have friends who live in the Okanagan Valley, in Summerland's Trout Creek area. It is really the place to have a nice drink and enjoy local flavours. He understands the Bloc Québécois's position. Quebec is home to many small craft producers who have developed berry wines and ciders.
Can my colleague explain why it is so important that the government listen and exempt these producers from the excise tax so that they can benefit—
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- Mar/22/23 10:29:06 p.m.
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Mr. Speaker, I come from New Westminster—Burnaby, the heart of some of the best breweries and wineries in all of Canada. I will mention the award-winning Steel and Oak Brewing Co.; Another Beer Co., or ABC, which has terrific products; the Dageraad Brewing in Burnaby, which has a lot of innovation in its products; and Pacific Breeze Winery, which provides excellent wines.
There is no doubt that the tax increase would have a big impact. The government is aware of this. We have been speaking of this for hours. The simple question is this: Why will the government not stop the price increase? Why will it not just halt it, so that it does not increase on April 1?
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