British Columbia Premier David Eby, right, gifts a bottle of B.C. wine to Alberta Premier Danielle Smith while speaking to reporters at the Council of the Federation meetings in Halifax on July 16.Darren Calabrese/The Canadian Press
British Columbia vintners can now sell directly to Albertans and also get their products into liquor stores and restaurants across the province after the resolution of an interprovincial wine war that was further damaging a sector battered by climate change in recent years.
The dispute began at the start of this year and, though it is about recouping tax revenue, has had echoes of the 2018 spat whereby Alberta banned B.C.’s grapes in retaliation for B.C. opposing the expansion of the Trans Mountain pipeline. Albertans, with their long history of vacationing across the Rockies, represent one of the largest target markets of B.C.’s billion-dollar wine industry.
Premiers David Eby of B.C. and Danielle Smith of Alberta announced the agreement ending the trade dispute Tuesday at a news conference on the sidelines of the Council of Federation meetings of Canada’s premiers in Halifax.
In January, Alberta Gaming, Liquor and Cannabis, which regulates the sale of alcohol in the province, sent cease-and-desist letters to 106 wineries in B.C. saying it had been investigating the practice of consumers in Alberta ordering wine directly instead of buying it in Alberta stores.
The letters, which made headlines in both provinces, warned the vintners the provincial wholesaler would not accept any further shipments bound for Alberta’s alcohol retailers as long as the wine producers refused to agree to stop their direct-to-consumer sales in Alberta. The direct sales meant producers were not paying Alberta’s taxes or fees to access the provincial market.
Brandon Aboultaif, press secretary for Dale Nally, the United Conservative cabinet minister responsible for the agency, said Tuesday that 61 wineries ignored the letter and 45 did sign and agree to stop shipping directly to clients.
In January, B.C.’s Ministry of Public Safety and Solicitor-General said it was “actively engaging with the government of Alberta” over the issue.
Direct sales are a long-standing issue for Canadian producers of alcoholic beverages. A 2018 Supreme Court decision found provinces had the right to restrict purchases that didn’t go through provincial licensing agencies. Only B.C., Manitoba, Saskatchewan and Nova Scotia had allowed consumers to order out-of-province wine directly from producers.
On Tuesday, the two premiers explained that any vineyards barred from shipping wine directly to Alberta clients could resume these sales immediately – but they must keep track of all these sales. Then, in two months or so, once the two provinces harmonize a digital database for this interprovincial trade, they will be asked to remit the proper taxes and fees to Alberta’s alcohol regulator.
“There are a lot of Albertans who love B.C. wine so we were hearing that they wanted to have a solution and we also heard directly from the vineyards,” Ms. Smith said.
Mr. Eby, who noted the stark political differences between him and his counterpart, joked that the détente was spurred along by him donning an Oilers jersey after losing a bet to Ms. Smith on who would win the Canucks-Oilers second round matchup.
In reality, he stated, the resumption of these sales is crucial for B.C. producers buffeted by huge crop losses due to the brutal weather in recent years. Last summer, a historically destructive wildfire season brought smoke that lingered around vines, contaminating many vintages.
Then, around the same time Alberta’s liquor regulator was investigating B.C. vineyards this January, those in the Okanagan and southern Interior were experiencing a historic cold snap that wiped out nearly all of this year’s crop of grapes.
The winter prior, another deep freeze destroyed more than half the harvest of some of these same producers.
“We are working closely with the wine sector to support them in being able to really persevere through this challenging period where the vines are dead in a significant portion of many different wineries so that they live through that replant and growth period and get back on track,” Mr. Eby said, promising more provincial support is coming.
Miles Prodan, president and chief executive of Wine Growers British Columbia, the trade organization representing 180 wineries making nearly all the commercial wine in the province, welcomed the end to a difficult choice his members had to make if they wanted to sell in Alberta: either anger their dedicated customers by stopping the shipment of their cases across the Rockies or lose out on the opportunity to be stocked in liquor stores or restaurants in that province.
Now, he said, B.C. wine companies – which represent a provincial sector worth an estimated $3.72-billion – need to sell their considerable stock of wine from previous vintages to tourists flocking to the Okanagan region from Alberta to “build up their reserves to get up through the not-so-good years that we know are coming.”
Al Hudec, a Vancouver-based lawyer hired by B.C. winemakers earlier this year to push back against Alberta’s move, said he was appreciative Ms. Smith was willing to negotiate an agreement, but cautioned that his clients will be eager to see how much in taxes and fees they will owe another government.
“There’s no use taxing other Canadian wines like you tax foreign wines and imposing a lot of random fees,” he said.
With a report from The Canadian Press