As shared in notices on May 6 and May 19, the 2022 Canadian Federal Budget announced plans to repeal the exemption of the federal excise duty that domestic suppliers receive for their 100 per cent Canadian-manufactured wine, cider, wine coolers, fruit wine and sake – herein referred to as “Impacted Product.” The repeal of the exemption became effective June 30, 2022.
As per the federal regulation, Impacted Product packaged before June 30, 2022 will not be subject to the excise duty, regardless of whether it is sold after that date.
Impact on BC VQA Rebate Program
As stated in the BC Liquor Distribution Branch’s (LDB) May 19 notice, the calculation of the BC VQA rebate will continue to be applied on the in-bond cost of the wine, which does not include the cost of any excise duty paid by the supplier.
However, in further recognition of the fact it may take some time for wineries to move through inventory packaged before June 30, 2022 – wine that is therefore exempt from excise duty – the LDB will wait until January 1, 2023 before deducting excise duty in calculating the BC VQA rebate.
The LDB will provide updates in the Fall on the reporting and calculation process for excise duty that will go into effect Period 10, starting January 1, 2023, for BC VQA products received into the LDB warehouse.
In the meantime, please note that suppliers remain responsible for paying the excise duty directly to the Canada Revenue Agency (CRA) for Impacted Product packaged after June 29, 2022.
For any questions on BC VQA rebates, please contact LDB BC VQA Support: BCVQASupport@bcldb.com.
For any questions on price changes, please contact firstname.lastname@example.org.
Thank you for your attention to this matter.