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Letter to the Honorable Gary Doer, Ambassador of Canada to the United States - Regarding Restrictive Canadian Wine Taxation Policies

Letter

Date: July 2, 2012
Issues: Taxes Foreign Affairs

Dear Ambassador Doer,

I write today to follow up on a discussion we had on April 17, 2012, concerning restrictive Canadian wine taxation policies that put New York wineries at a competitive disadvantage. As you know, wine purchased by Canadian residents returning from day or weekend travel to the United States is subject to a series of federal and provincial taxes and fees that can amount to anywhere from 50 to 150 percent of the value of the wine. In contrast, U.S. residents returning from a visit to Canada are permitted to bring two bottles of wine duty free into the United States. I propose the United States and Canada formally begin talks to eliminate Canada's high wine taxation barriers.

At our April meeting, you suggested the United States and Canada could negotiate resolution of the wine tax disparity in the context of the Trans-Pacific Partnership talks. I have asked the Office of the U.S. Trade Representative to take Canada up on that offer.

The TPP negotiations present a unique opportunity for the United States and Canada to come to an agreement to terminate provincial wine taxation practices that undermine economic growth along the border and hinder cross-border tourism and commerce. To that end, I respectfully request the Government of Canada commit to begin formal negotiations on this issue at Canada's first TPP negotiating session. While I welcome the inclusion of Canada in the TPP talks, my expectation is that the United States and Canada ultimately come to a formal agreement to eliminate barriers to equitable cross-border commerce in wine before TPP negotiations wrap up.

Mr. Ambassador, I know you share my desire to continue to grow cross-border commerce between our two countries. Eliminating the wine tax disparity between New York and the neighboring provinces of Ontario and Quebec is a critical step in the right direction.

Thank you for your attention to this matter. I look forward to continuing to work with you on this and other issues involving New York-Canada economic ties.

Sincerely,

Charles E. Schumer

United States Senator


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