After the governments of B.C. and Alberta announced they agreed to allow wineries to sell directly to customers in each other's provinces this week, South Okanagan wineries are wondering what costs will be slapped onto shipping.
On Tuesday, the provinces shared that restrictions on B.C. wineries selling wine online directly to Canadians in Alberta had been lifted.
According to a Government of Alberta news release, Alberta and B.C. signed a memorandum of understanding (MOU) that will make it easier for Albertans to buy wine from B.C., and vice versa, while ensuring that B.C. wineries pay “their fair share of fees from liquor sales in Alberta.”
“B.C. residents will also be able to directly order Alberta wine, supporting the growth of Alberta’s fledgling wine industry,” the release added.
All direct wine shipments to Alberta were stopped earlier this year while the two provinces battled over tax issues.
“Well, we're happy that they got to it. We're just sad that it took them seven months,” Lightning Rock Winery owner Ron Kubek said.
“The concerns I've got is, A), it's only a one-year deal, and B), the devil's in the details. The nervous part for myself and the rest of the industry was when the Premier of Alberta said, well, we're going to collect the tax, and then we're going to create a virtual warehouse to collect any other fees.”
Megan McKay Hall, sales and marketing manager for Time Family of Wines, said with wine club members in Alberta and tourists from the province wanting to get more wine back home, the ban put a damper on things.
“Wine lovers in Alberta, if they're not getting BC wine, they're getting it from Spain, Italy, France, Australia, etc, and they're not supporting the Canadian economy, right? So I think that's the biggest thing. And a lot of people as a hangover from the pandemic — want to keep money in Canada and support Canadian products and Canadian businesses. So it makes it a lot easier for us to do that with our Alberta neighbours,” she said.
As of June 2024, there are 327 licensed grape wine wineries in B.C. while there are 16 wineries in Alberta producing 26 products.
Canada tends to see better free trade with the U.S. than its neighbouring provinces, thanks to interprovincial trade barriers.
“It is cheaper to sell wine into other parts of Europe than it is into Quebec. In Australia, with their different states, there's free trade. In France and Italy, there's free trade among all their provinces,” Kubek said.
“In Canada, it seems that people are okay with taxing the crap out of other Canadians. And I challenge Premier Ford and I challenge Premier Legault, let's open up Canada, not only just to wine.”
While Wine Growers BC estimates the Alberta direct-to-consumer (DTC) channel to represent only 1.1 per cent to 2.75 per cent of the of the Alberta BC wine market, DTC shipping to Alberta residents has been a critical component to the growth and success of the BC wine industry.
“The danger is that with all these phantom fees and these phantom warehouse charges, even though I have to ship it from here, it's going to end up being costlier than it was before. So if that's the case, then we have to take a look at the whole DTC model in to Alberta. We have to take a look at the whole AGLC (Alberta Gaming, Liquor and Cannabis Commission) model, and maybe I do it as some other wineries have done. We just skip over Alberta,” Kubek said.
“We're hoping that [Alberta Premier Danielle Smith] goes ‘It's a flat tax of the $3.19, per litre’. Nothing else.”
McKay Hall said that shipping within the province is already expensive, and if the cost of the shipping cancels out the value of said wine, then it’s back at ground zero.
“Ultimately, I'd like to think that things work themselves out, and they have, but I know that it will come at a cost. There will be something else, some other hoop that we will have to jump through, I think, in order for us to get wine into Albertan homes.”
Wine Growers BC said they have long been an advocate for interprovincial free trade across Canada, with Alberta being a specific focus given the proximity, long-standing relationship, and commitment to the free movement of goods, services, investment, and people within and between the provinces.
“Our wine club, our direct-to-consumer channel, is our highest profit channel, right? Because we're not going through a middleman. So that's really, really valuable for those wineries and those operators,” McKay Hall said.
“We in the Okanagan Valley, love Albertans. We love those red plates. When they start coming through, you start seeing them at the beginning of the season, you [say], 'Come on in here!'
Wine Growers BC, along with a couple of Summerland winery owners, continue to also push the government to cut the mark-ups on bringing out-of-province grapes in, after a devastating loss from January’s cold snap.
Even with uncertainty ahead for BC winemakers, the Okanagan has plenty of wine for this year's locals and tourists.
