Vineland, ON – The Ontario Craft Wineries (OCW) has set out its priorities for the 2019 Ontario budget in various written submissions to the Ontario government. The OCW is recommending that the Ontario government:
Recommendation #1: Stop Import Taxing Domestic Wines
The Ontario government needs to address the “import tax” levied on 100% Ontario/VQA wine sales through the LCBO markup structure. Ontario wineries are seeking a 35% permanent tax credit that is predictable and addresses how wineries are unfairly taxed like imported wines in their home province. It is unfair to charge an import tax on domestic products that are, by definition, not imported. Mirrored after the 3-tiered distribution system in the US, the 35% is the equivalent of a US importer markup, which domestic US wineries are not assessed. US wineries are subject to 2 tiers of taxation, but not the 3rd importer tier. Ontario craft wineries are simply seeking a level playing field similar to wine producers in the US and BC.
Recommendation #2: Eliminate the Ministry of Finance Basic Tax of 6.1%
The previous government raised the Ministry of Finance Basic Tax from 2% to 6.1% despite profitability challenges in the Ontario wine industry. The annual Ontario Wine and Grape Industry Performance Study, prepared by Deloitte, shows the ongoing profitability challenges faced by the Ontario industry, which can largely be attributed to the low margins available to small Ontario wineries. No other Ontario business has a 6.1% tax on top of the other sales taxes the government collects. The Ontario government needs to eliminate this unfair tax on farm wineries.
The OCW leads the growth and profitability of Ontario’s respected VQA wine sector – through strategic partnership and authoritative trusted advocacy. As a non-profit trade association, the OCW represents over 100 wineries from across the three designated viticultural areas of the province (Niagara, Prince Edward County and Lake Erie North Shore – including Pelee Island) as well as emerging wine producing regions such as Ontario’s South Coast and Georgian Bay/Grey County. OCW members are independently owned small and medium sized businesses – grape growers, manufacturers and leaders in tourism in their communities. Our members are the future of Ontario’s wine industry which is a source of new investment, jobs and award-winning wines.