Why is Canada’s $1.5-billion-a-year horn tax on wine the loudest it’s been?
On the eve of its annual legislative session, the federal government has confirmed it will introduce legislation that will make it illegal to sell or trade in wine with a value above $1,500.
The move, announced by Industry Minister James Moore on Thursday, is likely to set the tone for future trade restrictions.
The new legislation, introduced to Parliament by the minister, will also make it a criminal offence to trade or offer to trade in wines exceeding a certain value.
The change to the law comes after the government introduced a $1-million wine tax last year that was criticised for raising prices on Canadian wine drinkers and hampering the growth of domestic demand.
The proposed change, announced on Thursday by Moore, was described as a “major step forward” in a statement released by Industry Canada.
“Canada’s wine industry is strong, and we continue to invest heavily in new technologies to keep our businesses competitive, including the introduction of the first-ever $1 million wine tax in Canada,” Moore said.
“The introduction of this new legislation will ensure that Canadians can be confident that wine prices will remain reasonable for decades to come.”
The new wine tax, expected to cost $1 billion, is expected to come into effect in March 2019.
While the government has already announced that it will raise the GST on wine to 10 per cent from 8 per cent, Moore said it is the first time the federal and provincial governments have put a tax on the same value.
“For years, we’ve said that wine is an important part of our economy, and now we’re taking that one step further,” Moore told reporters in Ottawa.
The government’s move to outlaw the sale of wine with values above $500 is expected in response to growing consumer concerns about how the new law will affect the industry.
Moore said he has received an overwhelming number of phone calls and emails from industry and consumer groups calling for the government to stop the wine tax.
“We know that a lot of consumers are upset by the proposed wine tax,” he said.
“They’re upset by how it will affect their wine and their wine prices, and they’re also upset that it’s not going to go through the legislative process, which we’re going to be doing in the next two weeks.”
He said the government would take further steps to reduce the wine industry’s exposure to higher wine prices in the coming months.
“I think that’s the real question.
If we’re not going through that process, how are we going to stop this from happening again?”