The owners of Lightning Rock Winery in Summerland, B.C., love selling their wines to Albertans, but trying to do that has become an even bigger burden financially in the past several months.
“Premier Smith talks a good game when she wants to say Canada first and Alberta first, but then what she does is hides a new tax under the Trump tariffs,” said owner Ron Kubek.
Kubek is speaking about an ad valorem tax that the Alberta government began charging April 1 on all bottles of wine being sold to Alberta consumers.
“It’s really unfortunate that Danielle Smith is incentivizing Albertans to buy cheap, low-cost wine from overseas that can be made for a dollar to $2 a bottle versus someone in British Columbia who’s … sixth-generation Canadian, born and raised, employing Canadians,” said Kubek.
For any bottle that costs between $15 and $20, a five per cent rate is applied; between $20 and $25, a 10 per cent tax is added; any bottle more than $25 will see an additional 15 per cent tax added.
“Nobody does it like Alberta,” said Jeff Guignard, CEO of Wine Growers British Columbia.
“The frustrating part is we’ve explained this to them. We’ve had plenty of conversations with them and they’re just not listening.”
Guignard says in a time of economic uncertainty with trade tariffs with the U.S., Canadians are the ones being hit hardest.
“The only people who are being impacted are Albertan consumers who are paying too much, and B.C. wineries are losing business because of it,” he said.
“If you buy that bottle in B.C., it will end up being four or five dollars cheaper than when we send it to Alberta. So that’s really impactful on folks who maybe come visit B.C.’s wineries and want to ship a case back. You suddenly find the Alberta government expects you to pay an extra $50 to $60 for something that did not go through the Alberta system and that has nothing to do with the Alberta government.”
As for Kubek, he says he has lost customers due to the increased taxation.
“Our sales have dropped off for people who want wine shipped to them in Alberta, because when we explain the new tax, they’re all really upset at their government,” said Kubek.
“They can’t understand why she (Smith) is fighting on one hand and, on the other hand, sliding a new tax in on Alberta residents.”
Kubek says B.C. and Alberta have agreements in place on other products already and feels his industry is being unfairly targeted.
“We don’t tax Alberta beef when it’s coming across the border. We don’t tax Alberta wheat when it’s coming across the border, even though we do both of those in B.C.,” said Kubek.
“We don’t tax the Alberta oil because we do oil in both areas. But they just decided that in the wine business, we’re going to punish small producers like myself. We’re going to punish them, and we’re going to punish Alberta wine drinkers who go, ‘We don’t mind buying Canadian. We know that it costs more in Canada to do business.’”
Kubek’s winery bottles about 3,200 cases annually.
“Even if Trump brings in his new 15 per cent tariff because the prime minister can’t negotiate anything as of Aug. 1, 15 per cent is still going to be cheaper for me to ship to the United States than to any other province in Canada. How does that make sense?” said Kubek.
In a statement, the Ministry of Service and Red Tape Reduction said, “Alberta’s liquor markup system supports the long-term viability of the province’s liquor industry and serves the interests of all Albertans.”
The statement read, “Alberta’s direct-to-consumer agreement with B.C. has reduced red tape by making it easier for Albertans to buy wine from B.C., while also ensuring that B.C. wineries pay their fair share of the fees Alberta normally collects from liquor sales in the province.”
The province says that the liquor markup on wine applies to all wine sold in Alberta, regardless of place of production (province or country) or whether it’s stocked in Alberta liquor stores or shipped directly to Alberta consumers.
B.C.’s Agriculture and Food Minister Lana Popham provided CTV News with a statement on Wednesday:
“B.C.’s world-class wineries welcome thousands of Albertans every year, so it is no surprise Albertans want to order more wine directly from the vineyards after they return home. What is surprising is that their government has slapped a new tax on Albertans, making it cost more to buy the wine they know and love,” the statement read.
“Now more than ever, Canadians from every province want to tear down interprovincial trade barriers to create a stronger Canadian economy in the face of U.S. tariffs. This tax takes us in the wrong direction and I will continue working to see it rolled back.”