U.S. Senator Kirsten Gillibrand, a new member of the President's Export Council, is taking action today to change a burdensome tax regulation to help increase exports of New York wine and craft beverages to Canada, and attract more tourism to New York's vineyards, distilleries and breweries. In a letter to the U.S. Trade Representative, Senator Gillibrand urged for a provincial sales tax exemption for all wine and craft beverages grown and produced in New York State. Currently, a 39.6 percent provincial levy is issued in addition to a customs duty paid to the Canadian federal government for anyone bringing more than 1.5 liters of U.S. purchased wine into Ontario, Canada. A similar levy and duty is over 66 percent for the Province of Québec. At the same time, visitors to Canadian wineries can travel back into the U.S. and only pay a 3 percent duty on wine exceeding more than 1 liter.
"New York is home to beautiful vineyards and high quality brewers, cider houses, and distilleries that produce first-rate wine and craft beverages," said Senator Gillibrand, New York's first member of the Senate Agriculture Committee in nearly four decades. "But burdensome trade regulations hold us back from selling our great products to our neighbors in Canada. It's time to harness our full economic potential, take this commonsense step, and give sales this exemption so we can boost our exports, and strengthen our economy."
"We greatly appreciate Senator Gillibrand's initiative to create a more equitable trade environment between New York State and the Canadian provinces just north of our border," said Jim Trezise, President for New York Wine & Grape Foundation. "Each year, our wineries welcome thousands of Canadian visitors who truly enjoy the wines and would like to take some home, but the hefty provincial taxes strongly discourage that. By contrast, American visitors to Canadian wineries routinely bring back a good supply of the wines they enjoy."
"The inequity that exists between visitors bringing wine, beer and spirits into New York and the bordering Canadian provinces clearly puts our growers and producers in New York at an extreme competitive disadvantage. New York Farm Bureau appreciates Senator Gillibrand's attention on the matter. Having a fair trade policy would provide an added boost to what is a thriving and exciting industry in the state," said Dean Norton, New York Farm Bureau President.
"We appreciate Senator Gillibrand's dedication to the agricultural industry," said Margo Sue Bittner, Owner of the Winery at Marjim Manor, Niagara Wine Trail. "As a winery owner close to the Canadian border, this is an issue I deal with regularly. We frequently have Canadian tourists but they do not purchase wine because of the onerous duty. Toronto is a large metropolitan area only an hour away. Yet, I cannot tap into that market because of this duty. When New Yorkers visit Canada, the duty is virtually nonexistent. I look forward to the day when we have parity and can partner, not compete, with wineries across the border."
"Finger Lakes Tourism Alliance has always provided marketing efforts to our wine industry and this ability to potentially increase sales to the Canadian market will certainly benefit our winery industry," said Cynthia Kimble, President of Finger Lakes Tourism Alliance.
"The Hudson Valley Economic Development Corporation's Hudson Valley Food & Beverage Alliance wholeheartedly endorses Senator Gillibrand's efforts to alleviate the 39.6 percent levy on wine exports from New York State to Canada," said Laurence P. Gottlieb, HVEDC President and CEO. "This exemption would greatly benefit the wonderful wineries and scenic vineyards of the Hudson Valley that host many tourists from Canada who buy their products each year. Sales would obviously increase and that would be beneficial for everyone."
"As owner of a winery and vineyard, I know that our Canadian customers are discouraged from purchasing our wine by the high tariffs they pay for bringing the wine home," said Sue Maring, Owner of Tug Hill Vineyards. "Fair and equivalent taxing at the boarder would benefit the wine producers in this bi-national economic region."
In 2011, New York exported just $29.6 million worth of alcoholic beverages to Canada, less than half of the $60.4 million that Canada sold to New York State, according to the New York State Department of Economic Development, despite New York being the nation's third largest grape producer with 320 wineries across the state, the nation's fourth largest beer producer with over 80 breweries, including three of the top 20 brewers nationally in sales, and the nation's third largest spirits producers with close to 30 spirits producers.
A provincial levy exemption for New York State wineries would increase wine sales to Canada by as much as $2.5 million in direct winery sales alone, according to estimates from Cornell University's School of Applied Economics and Management.