The Canadian Wine Industry

Although early European settlers, and possibly even the Vikings, attempted to make wine using wild native grapes, Canada’s commercial wine industry has been slow to develop. Canada’s production of wine is small by world standards as its climate, characterized by severe winters, spring frosts, and a short growing season, are not conducive to large-scale winemaking. According to the Canadian government, in 2007 Canada had about 8,102 hectares of vineyards compared to France which had 2.5 million hectares.

Canada’s most important wine producing regions are in Ontario and British Columbia. Ontario’s wine producing areas are close to or on the shore of either Lake Ontario or Lake Erie, whose warming effects moderate the Arctic winds that would otherwise make viticulture impossible. British Columbia’s wine producing areas are mainly in valleys where mountains or lakes moderate the temperature. Riesling, Chardonnay and Pinot Noir are well suited to Canada’s climate; Merlot, Cabernet Sauvignon and Cabernet Franc are also popular with growers. Vidal, a French hybrid grape, is widely used to make icewine, primarily in Ontario.

Over the last 25 years, the Canadian wine industry, which previously focused mainly on fortified wines, has evolved into a niche maker of internationally-respected, award-winning icewines and late harvest wines. Canadian producers started to focus on premium wines and new products, such as icewine, upon the implementation of the Canada-US Free Trade Agreement in 1989, because they could not match the economies of scale of large volume foreign producers. To produce higher quality wine, many growers replaced vitis labrusca and French Hybrid grapes with high quality vitis vinifera grapes such as Chardonnay, Riesling, Merlot and Pinot Noir. Additionally, an “Appellation of Origin” system known as VQA (Vintners Quality Alliance) was introduced in 1988. This certification enables consumers to identify high-quality wines based on the origin of the grapes and is an assurance that regulated production practices were followed.

Canadian-produced wine is divided into two categories. The largest category, referred to as “Cellared in Canada” wines are produced by mixing imported bulk wine; they are frequently low- to medium-priced table wines. In British Columbia, wine sold under this designation can be 100% from foreign sources. Ontario requires at least 40% domestic content, but as of 2014, Ontario will not require wine sold under this designation to have any domestic content at all. Some Canadian winemakers have expressed dissatisfaction with the designation as they feel it undermines the reputation of locally produced wine and jeopardizes the livelihood of Canadian grape growers. Furthermore, a survey conducted in December 2011 on behalf of the Canadian Food Inspection Agency (CFIA) revealed that most Canadians are not familiar with the meaning of the term “Cellared in Canada.” In June 2012, the CFIA said it is considering changes to country of origin labeling rules for wine because the term “Cellared in Canada” does not clearly indicate the country of origin or the process used to produce the wine.

The second category of Canadian-produced wine is made entirely from Canadian grapes. These wines tend to be mid- to premium-priced branded wines and are mostly VQA-certified wines.

Canadian wine consumption has been growing. According to a study completed by Vinexpo in 2011, volume consumption grew 22.5% between 2005 and 2009 and is expected to increase another 19% by 2014. This means that over ten years, Canada’s consumption will grow six times faster than the world average. 2010 retail wine sales were US$4.6 billion; by 2014, they are expected to grow another 19%.

Canada’s climate limits the wine industry’s ability to increase supply to meet growing demand, and the country is currently the world’s fifth largest wine importer by volume. According to Vinexpo, in 2009, 72% of the wine consumed in Canada was imported. France is the largest importer, but Italy, Australia and the United States are all major suppliers. Red wines are popular, and they comprise the majority of imports as soil and climate conditions prevent Canada from producing large amounts of certain red varietals, such as Shiraz.

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