G/STR/ Q1/CAN/12  
 
28 September 2016 
(16-5187) Page: 1/2 
Working Party on State Trading Enterprises  Original: English  
 
 STATE TRADING  
QUESTIONS POSED BY T HE EUROPEAN UNION  
REGARDING THE NEW AND FULL NOTIFICATIO N OF CANADA1 
The following communication, dated 27 September 2016, is being circulated at the request of the 
Delegation of the European Union . 
 
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The EU would like to seek further clarifications on the new notification  submitted by Canada on 
4 July 2016 regarding its STEs (G/STR/N/16). In particular:  
 
Canada (all jurisdictions, general ) 
 
Canada claims in its general statement that its mark -ups are calcu lated in a uniform, non -
discriminatory nature. However, in different Canadian provinces mark -ups are calculated as either 
ad valorem, flat rate, combination of ad valorem and  flat rate or volumetric taxes.  
 
Questions 1 -2 
 
In the light of the above, how doe s Canada ensure the uniform nature of calculating the mark -ups? 
How does Canada ensure the de facto non -discrimination towards high value and high priced 
imported products, such as wines, in case of application of the valorem based mark -ups? 
 
Page 25, Brit ish Columbia : 
 
According to the notification the new wholesale price system applies also to government liquor 
stores and mark -ups are applied universally to all products regardless of country of origin.  
 
Question 3  
 
Could Canada clarify in detail how the p rinciple of uniform and non -discriminatory mark -ups is 
respected by the government liquor stores in British Columbia when determining the retail price?  
 
Page 25, Manitoba : 
 
According to the notification, beverage alcohol's retail price is determined by ap plying combination 
of a category ad valorem mark -up and a flat rate per litre to the landed cost.  
 
Question 4  
 
Could Canada clarify in detail how it ensures the de facto non -discrimination towards high value 
and high priced imported products, such as wines , in case of application of  the valorem based 
mark-ups in Manitoba?  
 
Page 27, Nova Scotia : 
 
                                                
1 G/STR/N/16/ CAN. G/STR/Q1/CAN/12  
 
- 2 - 
 
  According to the notification, mark -ups in Nova Scotia are established by package size within 
product categories and are the same regardless of product origin withi n a given category. 
However, importers of EU products have encountered situations in which the mark -up applied to 
the liquor produced in Nova Scotia are lower that the mark -up applied to imported products.  
 
Question 5  
 
Could Canada explain and justify in w hich cases this may happen and explain how it ensures non -
discrimination against foreign products?  
 
Page 29, Quebec : 
 
According to the notification, wines without a varietal indication or appellation of origin designation 
that are bottled in Quebec may be  sold in grocery stores, along with beers and light ciders. Wines 
with a varietal indication or appellation of origin designation and spirits may only be sold in SAQ 
outlets.  
 
Questions 6 -7 
 
Could Canada clarify whether this will change after the adoption  of bill 88, an Act respecting 
development of the small -scale alcoholic beverage industry?  
 
Could Canada confirm that also locally produced wine sold in supermarkets will be subject to the 
same mark -up as imported products in ac cordance with the notificati on? 
 
**** 
 
Furthermore, the EU has also one follow -up question  with reference to the replies received from 
Canada to our previous questions (G/STR/Q1/CAN/10 and G/STR/Q1/CAN/10/Add.1) on the 
liberalisation process of alcohols sales and retail channels. In particular:  
 
Follow -up questi on to EU initial question 8  
 
In October 2015 the EU asked Canada to explain the extent to which the planned new routes to 
market (sales and retail channels) could be consistent with international trade rules, insofar as 
they wo uld appear to amount to discrimination between imported and domestic products.  
 
As a preliminary reply, Canada informed that the provinces of Ontario and British Columbia are 
both in the process of adopting changes to their liquor distribution policies wit h a view to 
increasing efficiency and effectiveness and that the Government of Canada worked closely with the 
provinces to ensure consistency of any changes with Canada's international trade obligations.  
 
Could Canada submit additional information on how t he new sales and retail channels in Ontario 
and British Columbia provides non -discriminatory access to imported products?  
 
 
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