Article content continued

“If this tax passes, we’ll close down Jan. 31,” said Benoît, whose distillery turns local juniper berries into gin, uses local beets to make spirits, and ferments local grain for whisky.

It’s perhaps even more unfair because favourable Ontario tax rules in recent years have helped create a thriving industry in craft beer and startup wineries.

Microbrewers pay 33 cents per litre in tax, compared with 80 cents for large brewers, and wineries pay just a 6.1-per-cent tax on bottles they sell at vineyard shops. Ontario now has more than 100 wineries and 70 craft breweries.

Meanwhile, the province’s 15 craft distillers pay the same tax rates as big distillers, which has left them struggling to get a toehold.

For instance, Marcel Rheault, a craft distiller in Hearst, Ont., who has had an international hit with his Loon Vodka — he cooks Ontario wheat and distils it four times, the fourth time in a mixture with milk to remove impurities — still has to distil out of his home, about 1,000 kilometres north of Toronto. He can’t afford to open a distillery, since he remits most of his revenue in tax.

“I pay $500,000 in taxes and get $200,000 in my pocket,” he said. “And from that, I have to make payments on a $500,000 still. It’s ridiculous. I’m in my fourth year and I haven’t even taken a salary.

“They gave me a premier’s award for innovation of $25,000,” he added. “I said, ‘Thanks. It’s the first time I’ve made any money.’ ”

To pay less tax, Rheault has decided to export to China and the U.S., and stop most sales in Canada.