Alberta, B.C. toast wine deal after tiff over taxing direct sales to consumers

EDMONTON — The Alberta-British Columbia wine fight appears to be coming to an end.

The premiers of both provinces announced Tuesday a one-year deal to again allow Albertans to directly order wine from more than 300 B.C. wineries in exchange for the Alberta government getting its share of applicable taxes.

“The markup was not being collected, and we think you need to have fair treatment,” Alberta Premier Danielle Smith told reporters in Halifax, where all of Canada’s premiers were meeting at the Council of the Federation.

“We’re just trying to close that loophole.”

British Columbia Premier David Eby said he’s grateful for the deal.

He said the standoff with Alberta hit his province’s wine sector at the same time it was also being buffeted by the impacts of extreme weather. The B.C. industry has had two years of crop losses due to record-breaking heat and cold snaps.

“This is good news for them at a time when they really need it,” said Eby.

The impasse began in January.

Alberta Gaming, Liquor and Cannabis — the agency that regulates the sale of liquor in the province by controlling wholesale distribution — announced it would no longer stock wine in Alberta stores from B.C. producers that were bypassing it to sell directly to Albertans.

The agency said those offering direct-to-consumer shipping were going against Alberta laws and impacting the dollars going into the general revenue fund.

The Alberta government said all B.C. wine shipments going straight to consumers stopped. The move also uncorked public pushback on both sides of the provinces’ boundary.

“There are a lot of Albertans who love B.C. wine, so we were hearing that they wanted to have a solution. And we also heard directly from the vineyards, who I think are really struggling,” said Smith.

Smith said she anticipates setting up within a couple months a “virtual warehouse” to collect fees from direct-wine sales, but the details are yet to be determined.

Until then, said Smith, Alberta will use a paper-based system to track sales. She said she trusts B.C. wineries to collect and remit what they owe.

Eby said it would take a few months for the two provinces to harmonize their regulatory systems, but it’s important to send a message now.

“You can go ahead and order your wine,” Eby said.

Ron Kubek, owner of Lightning Rock Winery in Summerland, B.C., told The Canadian Press he appreciates some action is being taken.

But, without any specifics, he said he’s worried the Alberta government will charge virtual warehousing fees on top of other taxes – even if his products don’t see a physical warehouse.

“I’m hesitant because the devil’s in the details, and I’m nervous because they’re going to leave it to bureaucrats whose idea is to tax and tax and tax.”

After January’s decision, he said he withdrew his products from Alberta’s government distributor and focused only on direct-to-consumer sales.

Now, Kubek said he’s happy to collect and pay a fair tax to sell his product directly to customers in Alberta, but without more information, he’s not sure what he’ll do.

“What they’ve done today is create more red tape,” he said of the announcement.

At the same time, Wine Growers B.C. welcomed the news, saying it brings stability to the industry. It also once again opens the door for Alberta tourists to place orders after visiting wineries.

“The end of the Calgary Stampede marks the unofficial start of summer, when visitors from Alberta flock to B.C., with many of them including a visit to their favourite B.C. wineries,” said Wine Growers B.C. president and CEO Miles Prodan in a news release.

The change also allows access to wine clubs and to products that might not be available through Alberta Gaming, Liquor and Cannabis, the organization noted.

Wine Growers B.C. estimates direct-to-consumer sales from Alberta represent less than three per cent of the Alberta-B.C. wine market. But it said the sales are still critical to the industry.

Greater Vancouver Board of Trade president and CEO Bridgitte Anderson, in a statement, expressed gratitude that both provinces worked to support their free-trade relationship.

This report by The Canadian Press was first published July 16, 2024.

Lisa Johnson, The Canadian Press