Good afternoon, Mr. Chair and distinguished members of the committee. I want to thank you for the invitation to appear before you today.
My name is Nicholas Baron and I am the vice-president of the Association of Acers Producers of Quebec, the AAPQ. I’m also the co-owner of Domaine du Cap, located in Acton Vale, in Quebec. With me today is our treasurer, Mr. Patrice Plouffe, owner of La ferme du loup, in Saint‑Paulin, in Quebec. I also have with me our secretary general, Mr. Vincent Lambert.
Acers, otherwise known as maple wines, were invented in Quebec in the early 1990s. They are the fruit of an effort to give maple syrup added value. These wines are alcoholic beverages whose alcohol content is obtained primarily through the complete or partial fermentation of concentrated maple water or diluted maple syrup. Fermentation consists of transforming maple sugar into alcohol using yeast. This process yields products that cannot exceed 22.9% alcohol. In other words, “acer” is to maple what wine is to grapes, cider to apples or mead to honey.
Quebec’s artisanal producers must comply with the general conditions for obtaining and maintaining a small-scale production permit to produce alcoholic beverages made from sap or maple syrup. This ensures that local products are used and manufacturing practices are put in place to guarantee the quality of products. Artisanal producers are small businesses that employ 1 to 15 full-time employees annually. They each have their own sugar bush and produce their acers under the small-scale production permit for alcoholic beverages made from sap or maple syrup. That’s a requirement. Many of these businesses offer agritourism activities on their sites. By welcoming a large number of visitors each year, they contribute to the vitality of the communities in which they operate.
Given Quebec’s constantly growing supply of artisanal alcoholic beverages, acer producers decided to join forces. They set up an organization to represent their interests and ensure the development of their industry. Thus, on October 30, 2023, the AAPQ was officially founded following its first general meeting.
The acer production chain is restricted by an extensive regulatory framework that prevents businesses from reaching their full potential, especially from an economic standpoint. Furthermore, post-pandemic recovery presented a range of significant new challenges. In this difficult context, imposing excise duties represents a major challenge for the profitability of acer producers, as well as for this industry’s growth and success.
In 2018, Australia filed a complaint with the WTO, the World Trade Organization, on the grounds that Canada was violating free-trade principles by promoting local producers at both the federal and provincial levels. In 2021, both parties came to an agreement at the WTO. Canadian wine producers would have to pay the same excise tax as foreign producers. In 2022, excise duty notice EDN75 was published. It repealed the excise duty exemption for 100% Canadian wine.
Two years ago, however, the Standing Committee on Finance heard from Cider Canada and the Association of Mead and Honey Alcohol Producers of Quebec. They came to ask for the continued exemption of Canadian ciders and meads from excise duties. Thanks to your support, these products are currently exempt from excise duties. Indeed, the definition of “wine” under the Food and Drug Regulations applies exclusively to wine produced from grapes. This is consistent with the initial complaint before the WTO, where the subject of the dispute was solely grape wine.
For the same reasons applicable to cider and mead, the Association of Acers Producers of Quebec requests that you reintroduce the excise tax exemption not only for maple wines, but also for all wines not made from grapes. In point of fact, the reestablished excise tax should not apply to them. This proposal is in keeping with the Standing Committee on Finance’s recommendation 332, which proposed that the government of Canada “[c]hange the excise duty exemptions for all-Canadian wine produced from honey or apples to also include all fermented products other than grapes.”
Lastly, I would like to draw your attention to the fact that maple wine producers are mainly small and very small businesses. Every tax increase can significantly affect their financial viability. These companies don't just provide local jobs. They're also key players in our economy that contribute to the vitality of the areas where they operate. To preserve these jobs and foster economic growth in our communities, the excise duty exemption on our products must be extended.
I would like to thank you again for your time and attention. We look forward to answering your questions.