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Sour grapes: N.S. pauses subsidy to wine bottlers that drew ire of wineries

HALIFAX — Following weeks of criticism, the Nova Scotia government is backing away from a contentious subsidy for wine bottlers that the province’s wineries said undercut their operations.
Nova Scotia Premier Tim Houston speaks to reporters in Halifax, Thursday, Feb. 29, 2024. Houston says his government is pausing a controversial subsidy for wine bottlers that drew the ire of the province’s wineries. THE CANADIAN PRESS/Darren Calabrese

HALIFAX — Following weeks of criticism, the Nova Scotia government is backing away from a contentious subsidy for wine bottlers that the province’s wineries said undercut their operations.

Premier Tim Houston told dozens of wine producers on Tuesday that he is “pausing” the subsidy program and creating a working group tasked with coming up with a new measure that will satisfy all the players in the sector.

Houston made the announcement following a nearly two-hour meeting late Monday with representatives from the province’s wine industry.

“Obviously concerns have been raised and heard, and I would say respected,” the premier told the producers. “So we have agreed to collectively put a group together and just have a frank discussion about what would make sense. The commercial wine program as has been announced will be paused.”

The government is backing away from its new commercial wine support program after drawing heavy fire from opposition parties and the agricultural sector. Wine makers said the subsidy that was launched in January allowed bottling companies to import cheaper grape juice to produce more wine and push local producers off the shelves at the Nova Scotia Liquor Corporation.

Houston has been scant on details of the support that had been allocated to Nova Scotia's two wine-bottling companies, but the wine makers have said they obtained estimates that the government had committed between $6 million and $12 million per year through the program. 

Those figures, however, are "nowhere near” what was being offered through the program that was just paused, Houston said. Some funding had been delivered to the bottlers, he admitted, but he wouldn't say how much, because that information was “commercially sensitive.” 

The premier said he didn’t intend to give an advantage to one part of the wine sector over another.

“Everyone wants growth for the industry,” Houston said. “I think we have agreed that there is room for different components of the industry.”

Karl Coutinho, chair of the board at Wine Growers of Nova Scotia, called the government’s move to pause the commercial program “great news."

“That’s all we’ve been asking for since the day we found out about it … let’s have a conversation,” Coutinho said, adding that the bottler subsidy as constituted just doesn’t work.

“It’s taking taxpayer’s money and supporting foreign agriculture versus right here in the province where we support 1,500-plus jobs.”

Liberal Leader Zach Churchill called the government’s move a temporary win for grape growers and wine producers.

“The premier got caught making a bad decision for the wrong reasons and he didn’t have a leg to stand on,” Churchill said. “Because of the pressure applied … he had no other recourse but to stand down on this issue.”

Over the course of the political furor, Houston was accused of helping out the bottlers because of lobbying by a friend and political supporter — a charge the premier has adamantly denied.

On Tuesday, the premier said the apparent change of course was due to the democratic process working as it should.

“This is part of governing and the important thing of our democracy is that you listen to voices when they rise,” he said. “That’s what we are doing, it’s not a bad thing, it’s a good thing.”

This report by The Canadian Press was first published March 19, 2024.

Keith Doucette, The Canadian Press

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