Wine and Taxes (and Spring!)

Canadian Federal Wine Excise Tax Increase Capped. If you were able to tear yourself away from the latest Hollywood court drama (a man is suing GP over an alleged ski crash that left him concussed and no longer able to enjoy wine tastings), then you might have seen the news about the federal beverage alcohol excise tax. It was set to increase by 6.3% on April 1, reportedly the largest alcohol tax increase in Canada in 40 years, but the feds are temporarily capping the increase.

Excise Taxes 101. An excise tax or duty is charged on goods produced or sold within the country, often on items like alcohol, tobacco, and certain fuels, sometimes known as a sin tax (and separate from other provincial liquor board fees and sales taxes). Canada’s 2017 Budget proposed that excise duty rates on alcohol be automatically adjusted annually based on inflation, and many have been calling for freezing or eliminating the increase including Restaurants Canada, the Canadian Chamber of Commerce, the Canadian Taxpayers Federation, and opposition parties. This week Budget 2023 was released and proposed to temporarily cap the inflation adjustment for excise duties on wine (and beer and spirits) at 2%, for one year only, as of April 1, 2023.

LCBO Price Increases in Ontario. Narcity had previously reported on how LCBO Prices Could Go Up due to the federal excise tax increase, explaining that the retail price at the The Liquor Control Board of Ontario (LCBO) — a government enterprise and retailer and wholesaler of wine, beer, and spirits in Ontario — is a combination of a supplier's price, the LCBO mark-up (71.5% for wine as per the latest wine price calculator), and other taxes and fees. In December, the LCBO released a pricing update that stated the minimum retail prices would be increasing March 1, 2023. So while the excise tax increase won’t be as much as initially thought, prices had already increased earlier this month for Ontarians. But on the bright-ish side, some Canadian economists believe some components of inflation, including food, are trending down.

Non-VQA Wineries Call for Level Playing Field for Wine Sold to Local Restaurants. A new group called the Ontario Artisan Wineries, which represents wineries selling fewer than 2,000 cases per year, wants Ontario to drop extra restaurant fees for non-VQA bottles. VQA is a program from the Ontario Wine Appellation Authority that sets quality and origin standards for wine, and non-VQA wineries pay 28% more than VQA counterparts when selling to restaurants. On March 8, 2023, the City of Ottawa passed a resolution (excerpt below) supporting the elimination of the extra fees on non-VQA wine sold to restaurants:

WHEREAS wineries in Ontario that are not part of the Vintner Quality Alliance (VQA) and sell 100% Ontario wine directly to a licensee (e.g., restaurant) are subject to a mark-up and wine levy imposed by the Liquor Control Board of Ontario (LCBO), which is not applied to sales by VQA wineries to licensees….

Craig MacMillan, co-owner of Stonehouse Vineyard, is the interim chair of Ontario Artisan Wineries and says “it doesn't make sense to have a different policy for artisan wineries that also use 100 per cent Ontario grapes.”

Spring Wine Szn. Moving past local wine taxation news (phew!), Kate Dingwall shares some seasonal wine picks from U.S.-based sommeliers in Spring’s Must-Sip Wines. Libby Burk, Wine Director at Common Thread in Savannah, says “there's something about a bottle of bubbly at the park surrounded by flowers that can't be beat,” recommending a Hungarian Pét-Nat from biodynamic winery Homoky Dorka in Tokaj. While Thomas M. Price, Sommelier at 1856 in Auburn, recommends Fontsainte Gris de Gris from Corbieres in southern France, “with great flavors of watermelon and fresh rhubarb.” More wine picks in the article, including Dingwall’s own recommendations:

I’m partial to bouncy, chillable reds (like Tarpon Cellars’ Cambaro red, Sziegl Prince Babel, or Tiberio’s Cerasuolo) or almost-salty, high-toned whites (Garcia & Valencia Verdejo, Laura Lorenzo’s crunchy Galician whites, or anything Txakoli).

Here’s to no more blizzards (🤞🤞🤞) and to more cherry blossoms and tulips and spring wine szn!

Happy spring and if you enjoy newsletters about wine, and sometimes Canadian tax policy, then please subscribe or browse the archives!