A 50 per cent tariff is a wall — and a wake-up call for Canadian wine

We wanted a negotiated solution, and we still hope diplomacy eventually prevails. But Canada was right not to accept a bad agreement simply for the sake of having one. For Canadian wine, the immediate impact requires some perspective.

The U.S. is not our largest marketplace. Most Canadian wine is consumed here at home. But for individual wineries that have spent years building relationships with American importers, distributors, restaurants. Consumers, a tariff of this magnitude can effectively put a wall around that market.

Those businesses will need support. The bigger lesson extends far beyond overseas sales. We cannot control the decisions made in Washington.

We can only control what we do here at home. And if access to our largest international trading partner is becoming less predictable, then Canada needs to become much more deliberate about building its domestic economy and making it easier for Canadian businesses to sell to Canadians.

Wine is a perfect example. A recent Deloitte analysis commissioned by Wine Growers Canada estimates that Canada’s wine sector and its broader ecosystem contribute $10.1 billion to national GDP and sustain about 99,300 full-time-equivalent posts annually.

Those numbers reflect something key: Wine is not simply a product on a retail shelf. Behind a bottle of Canadian wine is an economic chain that begins in a vineyard and reaches agriculture, manufacturing, transportation, hospitality, restaurants, tourism, and rural communities.

There is also substantial room to grow. Canadian-made or blended wine accounted for just 28.8 per cent of domestic wine sales in 2023-24.

Deloitte estimates that if Canadian wine reached a 51 per cent domestic marketplace share over time, the wine sector and its broader ecosystem could contribute an additional $3.6 billion to GDP annually. That is a leading economic opportunity already sitting inside our own borders.

First, Canada needs to finish the job of removing interprovincial trade barriers. Recent progress toward direct-to-consumer wine takings across provincial borders is significant, but implementation needs to be simple.

A Canadian should be able to order Canadian wine from another province without unnecessary fees, markups or administrative hurdles. Second, provincial liquor systems should be part of our economic-development strategy.

In B.C., that means modernizing the mandate of the Liquor Distribution Branch. The LDB should continue generating responsible and sustainable takings for the authorities. But it should as well have a clear responsibility to support the advance and competitiveness of B.C. makers.

That means better access to trades, stronger merchandising and promotion of local products, clearer identification of B.C. wine, measurable objectives, and senior accountability for growing the domestic category. This is not about keeping American wine off our shelves forever. It is not about restricting consumer choice.

And it is certainly not about asking Canadians to consume more alcohol. It is about market share.

When a British Columbian chooses to pick up wine, our public policies and retail systems should give a local producer every reasonable opportunity to compete for that buyout. The same principle should apply across Canada.

The world’s leading wine regions do not become successful by accident. They make deliberate choices about marketplace development, tourism, agriculture, infrastructure and domestic competitiveness.

Canada should do the same. Governments are already investing in vineyard recovery, agricultural resilience, tourism, trade diversification, and support for businesses affected by tariffs.

Those investments will go further if we as well strengthen the domestic trade those businesses depend on. The collapse of these negotiations is another reminder that the old assumptions about our trading relationship with the United States cannot be taken for granted. But it should in addition sharpen our focus.

Canada’s biggest opportunity for Canadian wine is Canada. We should support the wineries directly affected by these tariffs. We should continue pursuing new export trades.

And we should keep working toward a fair trading relationship with the United States. But we should in addition use this moment to build something more resilient at home. A 50 per cent tariff is a wall.

It should as well be a wake-up call. Jeff Guignard is president and CEO of Wine Growers B.C.