Ottawa tops up winemakers with $177M to help sector adapt to climate change, cost increases

The federal government is extending a program aimed at helping Canadian winemakers become more resilient in the face of challenges such as climate change.

Lawrence MacAulay, Canada's minister of agriculture and agri-food, announced the extension on Fridayat Trius Winery in Niagara-on-the-Lake, Ont.

"Canada's wine sector creates jobs, drives economic growth, and supports so many communities right across the country," he said.

In 2022, the government announced up to about $166 million in support over two years. On Friday, it announced a further investment of up to $177 million for the life of the program, which is set to end March 31, 2027.

The program issues eligible wineries non-repayable grants of up to $25 million per fiscal year based on the amount of wine they ferment in Canada.

In the initial two-year period, approximately 450 wineries received grant funding each year, totalling close to $158 million in payments, Agriculture and Agri-Food Canada spokesperson Bronwyn Goodman told CBC Hamilton in an email.

It's not clear what most wineries received. Goodman said individual payments ranged significantly. The rest of the initial funding went to delivering the program.

Industry groups praise decision

Debbie Zimmerman, who leads Grape Growers of Ontario, which represents over 500 grape growers, said people in the industry are "delighted" the program is continuing. She noted it started when a trade dispute ended a tax exemption the industry benefited from.

Speaking to CBC Hamilton on Monday a day in which the region experienced temperatures well above the seasonal average Zimmerman said climate-proofing the industry is important. "We need more resiliency."

In a statement, Dan Paszkowski, who heads industry group Wine Growers Canada, said the renewed investment "serves as a foundation for Canadian wineries, investors, and associated businesses, guiding crucial decisions, particularly in the face of challenges like vine replanting."

In a submission to the federal government in advance of the 2024 budget, his organization had recommended the program continue, citing challenges including inflation and competing with imported wine.

Climate and pests a concern

In a news release, Agriculture and Agri-Food Canada acknowledged other issues including price increases, labour shortages and severe weather events.

In Niagara, for example, winemakers, business leaders and experts have told CBC News that extreme weather can destroy grape crops. Currently, British Columbia wineries are reporting major losses due to a cold snap.

CBC Hamilton has also reported that warmer weather helps facilitate the spread of invasive species such as the spotted lanternfly, which has been reported in Niagara, and has the potential to devastate vineyards.

Edward Terry, assistant winemaker at Pearl Morissette Estate Winery in Jordan Station, Ont., said the last two years were challenging for his team's vineyards. In 2022, frost killed most of the vines at one of their locations.

B.C. wine industry devastated after Januarys prolonged cold snap

7 months ago

Duration 2:12

The B.C. wine industry is facing catastrophic wine grape crop losses this year. As Brady Strachan reports, a prolonged cold snap in January has damaged vineyards across the Okanagan.

The winery recovered, but he said such an incident can be a major setback. A vine is something you need to nurture and keep going for many years, Terry told CBC Hamilton.

"There are different things you can do to at least increase your odds but most of them are very labour intensive and require a fair investment."

He said Pearl Morissette has received grants from the federal program, and that any extra support helps. In addition to producing wine, he said his business also wants to care for the land and pay its workers well.

Funding for research, too

MacAulay's announcement also included about $7 million to support research into climate adaptation and provide grape growers and wineries with materials needed to plant virus-free vines.

Zimmerman said plants are often imported but can have viruses like leaf roll, which affect grapes' size and sugar content. Therefore, developing a stock of clean plants is something Ontario, Quebec, Nova Scotia and British Columbia have been working on for years. The goal, Zimmerman said, is a completely made-in-Canada wine process.

"That, to me, is why the government's money is so important."

Agriculture and Agri-Food Canada states that Canada's wine sector produced $1.6 billion in revenue in 2022.