MP Report: New taxes for local wineries

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As it continues to be a challenging time for everyone, we have to recognize that some businesses are still really struggling and have little or no revenue. Some of the sectors I’ve heard these concerns from include travel agents, events services, arts and culture, and wedding services. Many of our friends and neighbours’ immediate and long-term future may be uncertain, so it’s important we recognize that many industries aren’t back to ‘normal.’

The government announced that some passport office services will be resuming. If someone has an immediate need for a passport or are travelling in less than 30 days with proof of travel, they can request in-person appointments. Check out Canada.ca/passport for more information.

I wrote extensively about the WE Charity controversy in my previous column, so I’ll just add some new information. We learnt that WE Charity started working and incurring expenses on the government’s proposed program, prior to the Liberal Cabinet approving it. The government originally announced a $912 million student grant program, with WE Charity receiving $19 million to administer it. We learnt that agreement for grant distribution was actually $500 million, with WE Charity receiving $43.5 million to administer the program for 40,000 students. That leaves $368.5 million from the initial program costs not accounted for. In addition, the program could only disperse a maximum of $5000 per student, so the costs multiplied by the 40,000 students would be $200 million, not the $500 million budgeted. Simply put, the numbers just aren’t adding up and there are more questions than answers as information drips out through individuals testifying at committees.

On July 28th, in my capacity as Shadow Minister for Interprovincial Trade I issued a statement on Canada reaching a partial agreement with Australia regarding a wine trade challenge at the World Trade Organization (WTO), alongside the Shadow Minister for International Trade. We asked the government to work with the wine industry, who have given them proposals. Back in 2017, the Official Opposition and wine industry representatives warned the government of consequences of an escalator tax (automatic increase) on excise tax they were proposing, saying it would likely instigate a trade challenge with the WTO – which Australia did.

The legally binding judgement from the WTO was coming this summer. This is a made-in-Canada issue that did not have to occur. Due to lack of action from the government on this for almost 2 years, myself and other MPs from the Official Opposition with wineries in our ridings signed a joint letter early this year asking the government to open negotiations with Australia to resolve the dispute. I also spoke about this in the House of Commons.

On July 27th, the government announced an agreement with Australia at the WTO. However, it is basically what Australia wanted. 400 Canadian wineries will have to start paying excise tax on domestically grown grapes, within a time period. The Australian media announced they ‘won’ and the government of Canada announced they ‘came to an agreement.’ To put this into perspective, a small 9000 case per year winery will have a new $54,000 per year tax bill. We are hearing reports already of investment being put on hold and how this will set the industry back. Overall, it’s a $40 million dollar hit to the industry in new taxes.

Wineries had many of their distribution channels shut down for months such as restaurants, pubs, hotel events, onsite cancellation of weddings, and overall visitors numbers down. On top of this, the excise tax is ‘escalating,’ meaning, it will continue to automatically increase each year. That is for all liquor including beer, wine, and spirits. The Shadow Minister for Agriculture and I wrote the Finance Minister asking to not increase these taxes during a pandemic, but unfortunately this still went through on April 1st.

Please reach out to me to let me know what is important to you or if we can help with any federal programs. I also always appreciate the feedback I receive from our community. 250-470-5075, tracy.gray@parl.gc.ca; tracygraymp.ca.

 


This article originally appeared in the Kelowna Capital News. You can read the original article here.