  
  
WT/DS537/18  
 
18 May 2021  
(21-4165) Page: 1/2 
  Original: English  
 
 
CANADA – MEASURES GOVERNING THE SALE OF WINE  
NOTIFICATION OF A MUTUALLY AGREED SOLUTION  
The following communication, dated 12 May 2021 , from the delegation of Australia  and the 
delegation of Canada  to the Chairperson of the Dispute Settlement Body, is circulated pursuant to 
Article  3.6 of the DSU.  
 
_______________  
In accordance with Article 3.6 of the Understanding on Rules and Procedures Governing the 
Settlement of Disputes  ("DSU"), Canada and Aust ralia wish to notify the WTO Dispute Settlement 
Body ("DSB") that they have reached a mutually agreed solution to the matter raised by Australia 
in Canada – Measures Governing the Sale of Wine  (WT/DS537).  
Pursuant to an understanding between the parties, C anada has agreed that:  
i. it will repeal the federal excise duty exemption on wine set out in subsection 135(2) of the 
federal Excise Act  no later than 30 June 2022;  
ii. Nova Scotia will terminate and withdraw in a phased manner the Nova Scotia Liquor 
Corporation 's Emerging Wine Regions Policy no later than 30 June 2024;  
iii. Québec will subject wines from Quebec small -scale producers in grocery and convenience 
stores to a charge equivalent to the mark -up applied to wines sold through the Société des 
alcools du Québec,  by 1 December 2023;  
iv. Ontario will not issue any additional restricted beer and wine authorisations under Ontario 
Regulation 232/16;  
v. Ontario commits to phasing out the tax difference between Ontario wine and non -Ontario 
wine sold in off -site winery retail stores, including wine boutiques, by 20 July 2023 by 
introducing legislation in Ontario's Legislative Assembly to eliminate the tax difference and 
fully supporting its passage; and  
vi. Ontario will make the following amendments to the Ontario Regulation 232/1 6: 
a. by 20 July 2021, amend the definition of "small winery" in subsection 43(2) to 
increase the annual worldwide sales threshold from 200,000 litres to no less than 
375,000 litres;  
b. by 20 July 2022, amend subsection (2) in section 25 to reduc e the amount of 
dedicated shelf space from 50% to no more than 45%; and  
c. by 20 July 2023, amend subsection (2) in section 25 to reduce the amount of 
dedicated shelf space to no more than 40%.  
In addition, in line with Canada's commitments:  
i. British Columbia has eliminated the measures that allow only British Colombia wine to be 
sold on regular grocery store shelves while allowing imported wine only to be sold in grocery 
stores through a so -called "store within a store"; and  WT/DS537/18  
 
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  ii. Ontario has converted all remaining restricted beer and wine authorisations authorised under 
Ontario Regulation 232/16 to unrestricted beer and wine authorisations.  
In return, Australia has agreed to withdraw all legal claims set out in document WT/DS537/8, 
effective on the date of  this notice. We would ask you to circulate this notification to the relevant 
Councils and Committees, as well as to the DSB.  
 
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