DISTILLERS CELEBRATE PROMISED ASSISTANCE FROM PROVINCIAL GOVERNMENT
BY LEE HART
Alberta’s craft distilleries are raising a glass to toast the provincial government’s announcement of a new grant program for small distillers that will particularly benefit new entrants to the business in Alberta.
The program was mentioned in the March 2017 provincial budget and details about the new grants have yet to be revealed, but distillers are hopeful it might resemble the $20-million Alberta Small Brewers Development Program that was introduced last year to assist the craft brewing industry.
The brewers program rebates part of the tax collected by the provincial government on beer production back to small breweries. The grant amounts are determined on a sliding scale based on production volumes, with the best per-litre payout going to the breweries that produce the least beer.
“We are delighted with the news and look forward to working with the provincial government as they develop the details,” said David Farran, president and co-founder of the Alberta Craft Distillers Association, and founder of Eau Claire Distillery in Turner Valley. “Assistance like this that will reduce the tax load on craft distillers is critical, especially during the startup years.”
Geoff Stewart, co-founder and president of Rig Hand Craft Distillery in Nisku, agreed that the new grant program would be a huge help to distillers starting out in the Alberta market.
If the program is structured in a similar way to the grant program for brewers, it will provide the largest grant amount in the first year of operation and then decline as production increases over each of the next two years. “And that is exactly what we need,” said Stewart. “We have high startup costs and, since these operations are smaller, we also have higher labour costs—our facilities aren’t automated.
“As we start up, we can produce and market vodka and gin products, for example, but for whisky to be whisky it must age at least three years. It’s not until the third year that we can begin marketing some of our higher-value products.”
There are currently around 10 fully operational craft distilleries in Alberta, and roughly another dozen are in the application stage. Craft distillers are generally low-volume producers, and each one strives to produce unique, interesting and high-quality spirits. “There is plenty of room for this industry to grow,” said Farran. “It is important that we get involved in consumer education so they understand our products and appreciate what we can do in producing high-quality distillery products.”
Farran dismissed the criticisms coming from neighbouring provincial jurisdictions that any grants or rebates will give Alberta distillers an unfair market advantage. “Distillers in other provinces across Canada have received plenty of assistance from their own governments over the years,” said Farran. “Alberta is just starting out with its industry. We are really in a catch-up phase.”
Both Farran and Stewart said craft distillers are important supporters of Alberta-grown agricultural products and the broader Alberta economy. Virtually all raw ingredients needed to make spirits—ranging from crops like wheat, barley, rye and corn, to fruits for flavouring—are sourced from Alberta farms and processors. Each operation pays municipal taxes, and employs workers from its local community.
“Each operation works closely with farmers to source the products they need,” said Farran. “Many are establishing relationships with producers so they have a consistent, high-quality supply of products and often can offer a price premium.”
Farran added that the Alberta Craft Distillers Association is available to provide any input the provincial government needs to develop the final details of the grant program before its launch.