Relations between Canada and the United States are severely strained since President Trump imposed 1 percent tariffs on all goods from Canada and even higher tariffs on steel (50 percent) and cars (25 percent).
As a result, many Canadians are no longer visiting the U.S. In response to the impact on trade relations, the Liquor Control Board of Ontario [LCBO] and the other provincial liquor monopolies that control the importation, distribution and sale of wine, spirits and beer stopped importing alcoholic beverages from the U.S. and in some provinces pulled existing inventory off the shelves. On past visits to Ontario, I bought duty-free Bourbon for my brother, who has gone without his favorite whiskey this past year.
I was born and grew up in southern Ontario, about an hour from Niagara Falls and Buffalo, New York. Hamilton, where I lived, was at the western end of the Niagara Peninsula, the largest wine region in Canada. My parents honeymooned in Buffalo. I watched ABC, CBS and NBC almost daily, followed the NHL and NFL, and read Time magazine religiously in the late 1960s and early ’70s. Canadians were more reserved and polite, but as far as I was concerned our two countries were pretty similar.
For more than 30 years, my parents spent half the year in Florida, as did many Canadians, and it was common to see New York and Pennsylvania license plates during the summer months on the Ontario side of Lake Erie.
So, it is odd for me to see so much animosity between Canada and the U.S., to the point that trade talks recently broke down and currently show no signs of resuming.
There are winners and losers in this scenario. Since the embargo on U.S. wines, sales of Canadian wines have increased. Moray Tawse, who owns Tawse and Redstone wineries in Ontario’s Niagara Peninsula and Domaine Tawse in Burgundy, definitely sees a boost to local wines. “The provincial government’s “elbows up” campaign has definitely been a boon to the Ontario wine industry,” he says. “Sales for most wineries are up almost 50 percent, and for the first time in years there was a shortage of grapes from growers. It has turned on new consumers to how good local wines are, and I hope their newfound liking of these wines may last past this embargo.”
For Tom Pennachetti, co-owner of Cave Spring Vineyards, also in Niagara, the results have been mixed. Sales of Cave Spring Vintners Quality Alliance (VQA) wines have increased both in Ontario and Québec. “Ontario VQA wine sales at the LCBO are increasing at double-digit rates. The picture is similar in the other provinces, though I am not so close to the numbers outside of Ontario,” he reports. “I do know that at the [Société des alcools du Québec (SAQ)], Ontario wine sales have increased sharply since the trade embargo—30 perent year over year, and 40 percent year-to-date–on top of already robust market growth before the shutdown of U.S. wines,” he adds.
However, Cave Spring also has an import agency with 60 percent of its revenues from California wines. “Needless to say, it’s been very hard on the company,” says Pennachetti.
Among imported wines, wine lovers have been spending less per bottle, which has helped lower-priced wines from countries such as Argentina, Australia, Chile, New Zealand and Portugal. Nonetheless, increases in sales of these imported labels is nowhere near the jump in Canadian wine sales, indicating a sense of patriotism.
“On balance, the trade wars with the U.S. have not helped our Canadian sales,” explains Antonio Zaccheo, co-owner of Tuscany’s Carpineto estates. “Except perhaps marginally my Farnito Brut, which is replacing the California sparklers at the same price point.”
Canadians are generally friendly and trusting. They also have long memories. “When your neighbor does something nasty to you, you tend to remember for a long time,” notes Tawse. “The demand for American wines may never get back to the import levels they once were, and if any tariffs of any Ontario products like steel, aluminum or manufactured products remain at any level, this complete ban of products could last a long time.”
The damage done by the proposed tariffs on Canadian goods and the corresponding embargo on U.S. wines (and spirits) among other things has invoked a sense of nationalism I haven’t seen in my lifetime. It may take some time to rebuild relations between the two countries, possibly years, now that buying habits and attitudes have changed.
Ultimately, I think the consumer is the biggest loser, with less choice and higher prices. From what I have seen this year, tariffs divide countries and people, whereas wine unites them.
Senior editor Bruce Sanderson joined Wine Spectator in 1993 and is the lead taster for Burgundy, Tuscany and Piedmont.
