The federal government giveth with one hand and taketh with the other.
In Monday's federal budget, $101 million over two years was committed to Agriculture and Agri-Food Canada for programs to support the wine sector.
That's good news.
However, earlier this month it was announced the federal government would be forced to collect an excise tax of 50 cents per bottle of Canadian wine.
That's bad news.
"In that context, the budget money isn't really new funding, but redirected money from the excise tax exemption we had enjoyed for the past 15 years," said Tony Stewart, CEO of Quails' Gate Winery in West Kelowna.
"We're confident it will be a trade-compliant neutral-funding move that will mean wineries don't feel any pinch. The winery support program in budget 2021 will allow wineries in BC to come out of this pandemic recovery strong."
Stewart includes "trade-compliant" in his comments because the whole excise mess stems from Australia challenging Canada's excise tax exemption for domestic wine.
Australia claimed the exemption gave Canadian wines an unfair advantage against imported wines on Canadian shelves.
The Canadian wine industry doesn't agree with unfair advantage charge because Canada has high cost of production and most Canadian bottles cost more than many imported bottles, excise tax or not.
However, the case went to the World Trade Organization, which ruled in Australia's favour, not Canada's.
So, the government has no choice but to start charging the 50 cents a bottle excise, also known as a sin tax.
The excise to be collected is estimated to be $40 million a year.
However, the budget funding is proposed to be $101 million over two years, starting in next year.
So, the wine sector could be better off.
Although, wineries will still have to pay excise and reap the benefits of the budget money through programs, not direct money savings.
The hope is wineries won't jack up the consumer price of bottles of wine in reaction, but rather wait for cost-benefits neutralization to keep prices the same.
"How the Agriculture and Agri-Food money will be spent will be figured out in the next two weeks," said Stewart.
"It will focus on quality grapes and VQA (Vintners Quality Alliance) wines and building the Canadian brand worldwide so there are more sales of Canadian wines."
The money and programs will be spread over four wine-producing provinces -- BC, Ontario, Quebec and Nova Scotia.
"(The) budget announcement is a monumental investment in the future success of British Columbia's wine industry and the province's highest value-added agri-food beverage," said Wine Growers BC president Miles Prodan.
"The new program will support every winery across British Columbia and provide economic certainty, stimulate millions of dollars of investment and create thousands of winery, grape grower and tourism jobs across the province."
