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Niagara Falls
Monday, April 15, 2024
It’s official: Elimination of 6.1% wine tax included in provincial budget
Jamie Slingerland, director of viticulture at Pillitteri Estate Winery, is one of many in NOTL's wine industry who stands to gain from the elimination of the wine tax. FILE

Carolyn Hurst wanted to see it happen first-hand, so she was among those in the gallery of the Ontario Legislature on Tuesday when the government tabled its budget.

Hurst, chair of Ontario Craft Wineries and president of Westcott Vineyards in Jordan, has worked long and hard with others in the industry to lobby for the elimination of the 6.1 per cent tax on wine sold at Ontario wineries.

The budget made good on a government promise to get rid of the tax.

“We knew it was coming, but until you see it, it’s not real. I wanted to be there to witness it after all the work,” said Hurst. “It was really cool to be there.”

The tax is gone as of April 1 and the impact will be immediate, though consumers likely won’t see prices drop.

“It’s a 6 per cent improvement on your margin, so it’s pretty big,” said Richard Liu, owner of Ironwood Cider House.

“It’s just fantastic and for a couple of hundred wineries in the province, it’s going to make a difference in their ability to run their business,” added Hurst.

For some smaller wineries, getting rid of the tax will mean “the difference between staying above water or sinking,” she explained.

For others, the revenue from the elimination of the tax will be turned right back into the business.

For Westcott it represents about $100,000 a year, Hurst said.

That money can be used to hire another person or invest in equipment or infrastructure. “There are any number of ways we can put that money to good use,” she said.

At NOTL’s Pillitteri Estates Winery, 35 per cent of wine sales are made directly at the winery.

“So the impact is very significant, when you consider we produce 100,000 cases of wine per year,” said Jamie Slingerland, director of viticulture.

“We haven’t been able to reinvest over the last four years, so this will allow us to update our equipment to make ourselves more efficient and bolster our marketing,” he said.

Liu said it makes it more lucrative to focus on direct-to-customer sales.

He predicts it will boost tourism as wineries have more resources available to make their on-site offerings more compelling.

Eliminating the tax is especially welcome now, because it’s been a difficult time for wineries in Niagara, Hurst said.

“We are very dependent on tourist traffic and last summer the traffic was not what we’d hoped for, and certainly not back to pre-COVID levels,” she said.

Weather didn’t help, with a cool, rainy spring and wet summer, and smoke from forest fires clouding the sky.

Plus, inflation took a bite out of consumers’ discretionary spending. “Even this off-season has been slower than previous winters.”

Hurst is hoping this summer will be busier and the weather will be beautiful, hot and sunny.

“We’ve got all kinds of great things planned, so we’re really excited,” she said.

According to Slingerland, who studies weather patterns closely, “This will likely be an El Niño year, so the summer should be bright and warm and sunny. And that means more people.”

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