Dear Honourable Dale Nally, Minister of Service Alberta and Red Tape Reduction,
I am writing to express my strong opposition to the recently announced ad valorem tax that is scheduled to come into effect in our province on April 1, 2025. As an Albertan who values quality products and the option of supporting small, specialty businesses, I find this decision to be significantly harmful to consumers, businesses and the hospitality industry at large.
The fact that Alberta Gaming Liquor and Cannabis (AGLC) is referring to this tax as one that will be applied to “high value wine” is seriously misleading. Considering that it affects wine that retails for $16 per bottle and higher, a more realistic and disturbing way of viewing the new tax is that it initiates at a price point whereby the wine in question might actually be made by an individual, a family or an independent business that farms their own vineyards. Such wine producers are more likely to adhere to a minimum of environmental and ethical standards — be that sustainable or organic farming, providing workers benefits or compensating their employees with a living wage.
Any wine that’s cheap enough to avoid these taxes is certainly the result of industrial farming and winemaking. Furthermore, Canada is an expensive country to farm wine grapes, so this tax will apply to any Canadian wine product that’s made from Canadian-grown fruit. It thereby can’t be said that the impetus behind all this is to favour our domestic production. By increasing the tax burdens on wines that cost enough where the aforementioned considerations come into play, the Alberta government is penalising those who take these and other issues into account in regards to their buying decisions.
Perhaps the most ill-conceived aspect of the new taxes is that they exclusively target wine, an unorthodox and unfair approach that suggests a fundamental misunderstanding of the liquor industry as well as customer behaviour. “High value wine” — as the AGLC refers to it — is undoubtedly the category of alcoholic beverage that’s least likely to be abused. As a result, these changes penalise a significant portion of drinkers who consider wine to be a compelling beverage for reasons beyond its potential for intoxication.
Since its privatisation in 1993, Alberta’s wine industry has been the most vibrant, intrepid and dynamic in the country, boasting a selection of purveyors and products that would impress any wine lover lucky enough to be immersed in it — either as a resident or a visitor. By minimising government involvement and leaving purchasing, distribution and sales decisions to professionals, our wine industry — and therefore our restaurant industry — has played a key role in attracting tourists and money to our province.
As tends to happen in an open marketplace, massive companies have come to proportionately dominate the wine and restaurant industries in Alberta. But what keeps these industries exciting and cutting edge on a global level are the smaller and independent operators (importers, retailers and restaurateurs) who inevitably specialise in precisely the kinds of wines that will be subjected to the new tax structures. Isn't the point of a privatised liquor industry to foster this kind of creativity? Overnight, the proposed taxes will undermine the potential of these Alberta businesses to be competitive, and sadly, they will be the first to disappear when consumers are forced to either buy less wine than they did before, compromise the quality of the wine they’re accustomed to, or to seek alternative alcoholic beverages that aren’t subjected to the new taxes.
Alberta’s climate precludes us from producing our own wine from grapes, and therefore our provincial wine and restaurant industries rely on imports. These industries are already burdened with record high shipping rates, a weak Canadian dollar, massive increases to Liquor Connect storage fees, the sudden advent of tariffs and the dizzying inflation that’s ubiquitous to all industries. This new tax would never be welcomed with open arms, but the Alberta Government’s timing is perplexing, imprudent and potentially debilitating for those of us who love authentic wine — and particularly to the numerous small and independent businesses who purvey it.
I urge you to reconsider this policy before it goes into disastrous effect on April 1st, 2025.
Sincerely,
