This discussion summarizes some common compliance issues for BC wineries arising from the BC Agricultural Land Commission's rules (i.e. these rules will apply only if the winery is located on land that is part of the Agricultural Land Reserve). Significant topics that are explained include:
- ALC Production Requirements including sourcing of grapes/fruit
- ALC Development Rules which will affect all new wineries and any changes to existing wineries
Title: BC Agricultural Land Commission Rules for Wineries
Date: March 27, 2020
Author: Mark Hicken, BA JD
This document contains a general discussion of the issues noted which was prepared on the date noted above. It does not constitute legal advice and was not prepared for you specifically. If you or your business needs a legal opinion, you should contact a lawyer for individual and updated advice.
This discussion summarizes some of the common compliance issues for BC wineries arising from the rules and policies of the BC Agricultural Land Commission (ALC). These rules will apply only if the winery is located on land that is part of the Agricultural Land Reserve.
1. Production Requirements
The ALC’s rules are likely the most problematic of the various regulatory bodies, particularly when it comes to the development of new wineries. Their rules seem to change frequently and without consultation with industry. For example, during 2018, the ALC’s policy guidelines for alcohol production on ALR land (Policy L-03) disappeared from their web site for most of the year. During this time, it was very difficult, if not impossible, to get any guidance from the ALC. The policy reappeared in mid-December 2018 although it was dated as having been amended in April 2018. When it re-appeared, it included new restrictive rules upon which there had been no consultation. These changes caused considerable problems for anyone that was in the process of opening or developing a winery because ‘the goal posts moved’ without warning.
The previous policy document that was specific to alcohol production has been removed. The rules are now set out in a number of separate documents, specifically Policy L-01, L-02 and L-04 all of which can be viewed here. Unfortunately, due to the historic lack of consultation, it is difficult to know whether these rules are the entirety of what the ALC is planning and/or whether new restrictions or new policies may suddenly appear. However, the following is a summary of the rules as we currently understand them.
The ALC’s governing Act and Regulation include restrictions on alcohol (wine) production on ALR land which are similar to, but not the same as, the LDB’s rules for land-based wineries. For example, alcohol production on ALR land is permitted as a “farm use” if one of the two following conditions are met:
- at least 50% of the primary farm product used to make the alcohol product produced each year is grown on the farm on which the alcohol production facility is located, or
- the farm on which the alcohol production facility is located is more than 2 hectares in area and at least 50% of the primary farm product used to make the alcohol product produced each year is either (a) grown on the farm, OR (b) grown both on the farm and on another farm located in BC that provides that primary farm product to the alcohol production facility under a contract having a term of at least 3 years.
As such, a winery that is located on ALR land must either grow at least 50% of the grapes used in production on the farm where the winery is located OR, if the farm is more than 2 hectares in size, at least 50% of the grapes used in production must come from both the farm where the winery is located and one or more other BC farms that are under contract to supply the grapes to the winery for a term of at least 3 years. Farm is defined in the legislation as one or more parcels of land owned or leased by the farmer and used for farm purposes. However, the ALC’s policy indicates that they apply some of their rules respecting alcohol production only to the individual parcel of land where the production facility is located.
As a result of the above, if a winery (farm) is more than 2 hectares in size so as long as the winery produces grapes on the farm and uses those in its production, it can also buy grapes from other vineyards (farms) within BC so long as the grape supply contract is at least 3 years in order to satisfy the 50% requirement.
2. Development on ALR Property
As discussed above, the ALC has created new rules (which are not contained within the Act nor Regulation) in the following information bulletin: L24 Farm Related Commercial & Industrial Uses. The most contentious of these is that the total development area for the individual legal parcel upon which the winery is located cannot exceed 5% of the surface area of that individual parcel. Development is defined very widely in the policy and includes, for example, all buildings as well as roads, parking areas and landscaping.