Distillers’ hopes dashed after bill fails
Ontario’s burgeoning craft distillery market is raising only half a glass to the provincial government this week.
On one hand, they support the announcement that the province will invest $4.9 million during the next three years to support small distillers and cideries.
On the other, they’re disappointed the province defeated a private member’s bill that would have removed several barriers facing the growing number of craft distillers in Ontario — including one that opened last month in Niagara Falls.
“There has been a change in the tax rebate for the small craft distillers, which we do think is a step in the right direction, but we don’t think it’s enough yet,” said Andrew Murison, president and general manager of Niagara Falls Craft Distillers.
“We’re happy that the government is recognizing there’s an opportunity to make change, but at the same time we still think there’s more that can happen.”
That more could have been addressed in Bill 50, the Free My Rye Act, which was defeated following debate in the legislature Thursday.
The bill, introduced by Steve Clark, a Progressive Conservative MPP representing Leeds- Grenville, would have created a graduated tax plan that would have seen producers pay more tax as they increase production, rather than a flat perbottle tax.
“Distillers face tremendous startup costs and a graduated tax allows them to pay off debt faster and start reinvesting to increase production volumes and hire more staff,” said Clark.
“That’s what has happened in the U.S., B.C. and Nova Scotia where this type of reform sparked an incredible expansion in new craft spirits producers.”
Clark said even with the threeyear rebate program announced by the government this week, he’s “not sure we’re going to see new distilleries go from planning to production.”
The provincial program will give eligible distillers up to $4.42 per litre of sales made to the LCBO, to establishments with liquor licenses, and at on-site retail stores.
Cideries will get up to 74 cents per litre on sales made to the LCBO and restaurants, bars and venues with liquor licenses.
Both distillers and cideries can receive up to $220,000 per year.
In the last fiscal year, sales from small distillers increased 62 per cent and craft ciders grew 54 per cent from the previous year.
In addition to the graduated tax plan, Clark’s bill would have removed the middle man by allowing for direct delivery to bars and restaurants, instead of going through the LCBO bureaucracy; allowed for perglass sales; and increased access for consumers by expanding the retail outlets where craft spirits are sold.
Clark’s bill received support from the Ontario Craft Distillers Association.
“I’m so disappointed the Liberals and NDP voted against reforming Ontario’s outdated liquor regulations and the crippling taxes that are a real disincentive to small, independent craft distillers,” said Clark.
“Both parties claim to support craft distillers, but when it comes to removing the barriers to growth in the sector, their votes (Thursday) spoke louder than their words.”
During Thursday’s debate, Clark stressed he was open to all-party co-operation and wanted the bill to make it to committee so that politicians could hear from craft distillers and “work together on a package of reforms to unleash the amazing potential for growth in this sector.”
Murison, who is one of three partners who came together to open Niagara Falls Craft Distillers on Lundy’s Lane, adjoining Syndicate restaurant, said he doesn’t believe there’s enough parity between craft distillers, craft wine and craft beer.
He described Bill 50 as an Act that would have helped to “create jobs and (promote) more innovation within the marketplace for the Niagara region and the Ontario region.”
The distillery in Niagara Falls produces, bottles, markets and sells specialty, small-batch vodka, gins, whiskys and other distilled spirits on site.
The distillery opened Feb. 10 and Murison said “it’s been a good start.”
“We’ve had lots of people coming in to buy our vodka and gin and asking a lot of questions about our rye,” he said.
Murison said the distillery’s rye will soon be produced and bottled, and should be available for sale starting next week.
He said part of the bar area is being converted into a tasting, visitor and retail centre, which should open April 1.
“We’re really happy with how things are going over the last four weeks.”