Alberta to boycott BC wines over pipeline dispute

A spat between the Canadian provinces of Alberta and British Columbia over the Kinder Morgan pipeline expansion touched the wine industry this week with the news that Alberta intends to boycott all BC wines with immediate effect.

The clash concerns the building of an oil pipeline from Alberta to the Pacific Coast in BC known as the Kinder Morgan Trans Pipeline Expansion Project which although approved by the Federal government is being vigorously blocked by important constituencies in Vancouver through which it will pass (as does another, older Kinder Morgan pipeline).

The government in BC has promised to conduct a review and consult with communities over fears of damage to the environment caused by oil spills (the old pipeline has leaked on a number of occasions) but this stall is viewed negatively in Alberta where the pipeline is seen as vital to securing thousands of jobs.

Alberta’s premier, Rachel Notley, announced yesterday (6 February) that sales of wine from the neighbouring province through the Alberta Gaming and Liquor Commission would be suspended immediately.

As reported by the Canadian Broadcasting Corporation, Notley said: “The wine industry is very important to B.C. Not nearly as important as the energy industry is to Alberta and Canada, but important nonetheless.

“I know a lot of Albertans who love B.C. wine. Quite frankly, I’m one of them.”

Due to provincial monopolies and the still controversial laws that prevent private sales across provincial borders in Canada, Alberta which has no monopoly system is a key market for BC wines and the second biggest behind BC itself.

Around 30% of all wine sold in Alberta is from BC with a retail value of C$160 million.

The move was immediately condemned by BC’s premier, John Horgan, who released a written statement urging Alberta to, “step back from this threatening position” as we ass saying: “We stand with B.C. wine producers and will respond to the unfair trade actions announced today.”

The British Columbia wine Institute (BCWI) also released a statement expressing its surprise at the measure.

The statement read: “We are shocked that the Alberta Premier and Government are aggressively boycotting BC wineries over a yet-to-be-determined British Columbia government policy in a different sector.

“A working free-trade relationship between Alberta and British Columbia is imperative to securing economic wellbeing for Canada.

“The BC wine industry has worked hard to build a positive relationship and partnership with Alberta, particularly in the wine, culinary and tourism sectors, including having collaborated on multiple campaigns directly with the AGLC.

“We are disappointed that this political decision is threatening our progress and threatening the successes that have benefited small businesses in both the Alberta and BC economies.

“The BCWI believes that it is important for all Canadian provinces to work together and trade together to strengthen our position nationally and internationally. We are very surprised by today’s announcement.”

The boycotting of BC wine is just the latest step in the growing economic spat between the two provinces with Notley having already suspended the purchase of BC-produced electricity.

“We’re prepared to do what it takes to get this pipeline built,” she is reported as saying.

The problem is exacerbated by wider political and economic factors in Canada at present.

Vineyards in the Oliver sub-region of BC’s leading wine region, the Okanagan Valley

To begin with the provincial governments of BC and Alberta are currently controlled by the New Democratic Party but with small margins – tiny in the case of BC.

Following elections last year, Horgan’s administration formed a coalition with the Green party to give the NDP just a one-seat majority. Naturally it is the Green party that is most vociferous in its opposition to the pipeline and without the support of their three MPs, the NDP government would fall – leading, in all likelihood, to a Liberal government.

In Alberta, meanwhile, falling oil prices have led to many job losses in the key oil sand are of Fort McMurray. The construction of the new pipeline (first proposed in 2016) is a $6.8bn project that will create 15,000 much-needed jobs during its construction.

With the province now in its own electoral cycle culminating in elections by May 2019, Notley and the Alberta NDP are desperate to prove they can stand-up for Albertan jobs.

Although it has approved the pipeline in principal, Prime Minister Justin Trudeau and the ruling Liberal Party is unlikely to intervene too much for fear of alienating Liberal voters in BC who oppose the pipeline, especially considering the party’s dominant position in the BC legislature.

Ultimately, however, Canada’s prosperity is natural resources based and the pipeline has too much money invested and job-creation potential not to go ahead eventually.

Trudeau has already stated that, “That pipeline is going to get built,” although whether his subsequent actions will match his words is perhaps another matter.

In the meantime with the two provinces at loggerheads there is uncertainty over what the long-term effect of the boycott will be on BC wines. The ban does not seem to cover BC wines already on the shelves of Alberta’s liquor stores – all of which are independent, not provincial – so as long as stocks last there, BC wines are not about to ‘disappear’ from Alberta but the AGLC will certainly not be releasing any stock from

It’s possible that the matter will be cleared up before the sanction begins to hit BC producers – many of which are small operations – financially.

If it does not, however, then BC producers (principally in the Okanagan Valley) may find themselves sitting on stocks of wine normally destined for Alberta that need new destinations. With rising interest in Canadian wine in places such as the UK but quantities normally in short supply the potential to further develop nascent export markets may become more viable.

Could Alberta’s loss be the rest of the world’s gain?