Artisan wineries want Ontario to drop extra restaurant fees for non-VQA bottles

A group of small Ontario wineries says a levy for selling non-VQA bottles to local restaurants goes against the Ford government's "open for business" mantra and is calling on the province to place their 100 per cent Ontario grape wines on equal footing with VQA ones.

While artisan wineries can hold tastings or sell bottles at their farm stores, once that bottle gets into the hands of a restaurant they're charged an extra 28 per cent above what a VQA Ontario winery would pay.

"If you sold that $20 bottle of wine in a case ...  the VQA winery is going to receive $173.64 in revenue and we're going to receive $113.40," said Craig MacMillan, co-owner of Stonehouse Vineyard in North Glengarry, Ont.

MacMillan is the interim chair of Ontario Artisan Wineries, which represents farmers selling fewer than 2,000 cases per year and is mostly made up of vineyards in eastern Ontario.

That $60 difference may not seem like much, MacMillan said, but when looking at multiple cases, those numbers add up quickly.

If an artisan winery chose to sell all 2,000 cases to local restaurants, they would pay $120,000 more in taxes than a VQA winery, he said.

"Legally are we allowed to sell to local restaurants? Absolutely. But you can't when you're paying those types of charges," he said.

VQA, short for Vintners Quality Alliance, is a program from the Ontario Wine Appellation Authority that sets standards for wine made in the province.

The VQA mark on a bottle indicates the wine is made entirely from grapes grown in Ontario that have also been approved through a quality assurance program.

MacMillan said it doesn't make sense to have a different policy for artisan wineries that also use 100 per cent Ontario grapes.

We work too hard to give our wines away for barely anything, so it doesn't make financial sense for us to go that route.- Jan-Daniel Etter, owner of Vignoble Clos du Vully

The only difference is the type of grape many of his group's members use, as most VQA Ontario-approved grape varieties can't be grown outside southern Ontario and Prince Edward County. 

In 2019, the province did add hardier Marquette grapes to the VQA Ontario's approved list, but other varieties haven't made the cut.

Jan-Daniel Etter sees selling local wines to local restaurants as a natural next step for his Navan winery Vignoble Clos du Vully, about 35 kilometres southeast of downtown Ottawa.

"[Restaurants are] showcasing the best of what's being grown and produced in the area and the wine is part of that culture, so I think it would be a perfect complement," he said.

The tax structure is prohibitive, Etter added.

"We work too hard to give our wines away for barely anything, so it doesn't make financial sense for us to go that route," he said.

Eastern Ontario municipalities call for markup removal

MacMillan and Ontario Artisan Wineries have been lobbying local municipalities to support their call for a review of what he calls an unsustainable markup and wine levy.

Last Wednesday, the City of Ottawa passed a resolution supporting the elimination of these extra fees and calling on the province to remove them.

Orléans South-Navan Coun. Catherine Kitts believes it's time for the legacy legislation to be revisited.

"Wineries are a really big contributor to our local agri-tourism sector," she told CBC, admitting even she couldn't get a clear answer from the province as to why the tax discrepancy exists.

Several other municipalities in eastern Ontario have supported similar motions in the past weeks.

In a statement, Ontario Ministry of Finance spokesperson Scott Blodgett said the wine sector is "an important part of our province's economy" and the government is "committed to seeing it grow and thrive."

Blodgett also wrote that wineries have access to a range of government supports, although he did not specify them.

"The government will continue to work with our industry partners and ensure there are more opportunities for businesses,"  he wrote.