PO Box 2291 Windsor NS B0N 2T0

November 10th, 2020

Hon. Ernie Steeves, Minister of Finance Chancery Place P. O. Box 6000 , NB E3B 5H1

Via email: [email protected]

Re: ANBL Policies Affecting the Viability and Growth of Local Craft Breweries

Dear Minister Steeves:

We are writing you today as a follow-up to a meeting you attended on October 28, 2020 with the Craft Alcohol Producers Association (hereinafter “NBCAPA”). Thank you for continuing to engage with the business community so that the public and private sectors can best work together to move the province forward.

As business organizations with predominantly small business members, we are keenly aware of the need to balance short-term revenue needs with medium- and long-term growth (especially in today’s climate) and appreciate the pandemic-related pressures on government finances. We can also understand and respect your position that ANBL is not an economic development organization and that your government relies on the profits generated from alcohol sales to fund services.

However, while ANBL may not be responsible for economic development, it is undeniable that policy decisions by (or on behalf of) the organization do have significant and tangible impacts on private-sector economic growth. The situation is analogous to the recently released New Brunswick First procurement strategy. Procurement, too, in the classical sense is not meant to foster economic development, but rather to deliver value-for-money to the government. However, the new strategy correctly recognizes the important impact that procurement can have on New Brunswick businesses growth, innovation and even survival.

Similarly, government ministries such as Health, Education, Transportation and Infrastructure, and Post- Secondary Education, Training and Labour are also not “economic development” organizations, but the impacts of policies implemented by these departments on the economy are obvious and well understood. The relationship between ANBL policy and private sector growth is clearer than most

If New Brunswick is to effectively have market control in the alcohol distribution business, we know that we can agree that policies enacted by ANBL should, at a minimum, not actively harm private-sector growth. A key message that our chambers have consistently delivered to all levels of government is that all decisions made by government should be viewed through a ‘business lens’. This situation is a clear example of why this is important and why it is critical that government work closely with the private sector so that this lens is in clear focus. Working more closely with the private sector to develop policy and procedures would help avoid many instances of harmful unintended consequences that stunt private-sector growth.

An industry-government working group or task force is a reasonable request by the members of NBCAPA, so that ANBL can continue to be profitable and provide much-needed revenue to the Government of New Brunswick while not unintentionally suppressing private sector growth. The recent plan to warehouse craft beer in a central location (Fredericton) is a perfect example of why such a group is needed.

It is our understanding that it was industry itself that requested such a program and ANBL responded positively to this idea – which is great - but then the process was designed, communicated and nearly implemented without input from industry participants - resulting in a program that disproportionately favours large producers, creates an uneven playing field based on geography and contains fundamental design flaws such as non-competitive fees and non-refrigerated storage for unpasteurized craft beer.

Similarly, industry estimates up to 80% of their products could be removed from ANBL shelves with the new minimum product sales requirements. Further, the move from 30 to 270 days to have a product listed with ANBL means that small producers are disincentivized to innovate, are unable to move quickly to adapt to customer demand, and in many cases are forced to simply guess at crop yields and the resulting products – not exactly a recipe for success.

Of course, these are just a few examples – it would behoove governments at all levels to make it the normal practice to work with the private sector to craft policies and procedures in the first place. With a true business lens, all arms of government should take the position of supporting startups and local businesses and ‘default to yes’ wherever possible. We know the government is seeking ways for government to support business without providing direct financial support - this is an industry with potential waiting to be unlocked with the removal of red tape and policies that are solely focused on ANBL’s bottom line. Government isn’t just competing with business in this sector, it is holding it back.

As Premier Higgs wrote to the Fredericton Chamber of Commerce on 26 October 2020: “We recognize every decision and new policy needs to consider what the impact will be on the private sector. This lens is foundational to our pro-growth agenda and ensuring the right conditions for the private sector to thrive.” We could not agree more.

In November 2019, speaking about Cannabis NB, you stated that the “government should not be in the business of business.” While we understand you were speaking in general terms, it would seem that the only discernable difference between Cannabis NB and ANBL in this regard would appear to be the profitability of ANBL. The fact remains that government is in the alcohol business and, for better or

worse, this does have an impact on local small business. We ask that you and your government recognize this reality and work more closely with industry to better understand the impacts ANBL policy has on their operations so that both the public and private sector participants can be successful and sustainable.

Cordially,

Anne McGraw, Executive Director, The Greater Shediac Chamber of Commerce Barbara Meed, President, Florenceville-Bristol, and District Chamber of Commerce David Duplisea, CEO, The Saint John Region Chamber of Commerce John Wishart, CEO, Chamber of Commerce for Greater Julie Bilodeau, Executive Director, Chambre de commerce du Grand Tracadie-Sheila Julie Pinnette, General Director, Chaleur Chamber of Commerce Krista Ross, CEO, Fredericton Chamber of Commerce Rebecca Preston, Executive Director, Chambre de commerce de Caraquet Sheri Somerville, CEO, Atlantic Chamber of Commerce

cc: Hon. , Premier, Province of New Brunswick Hon. , Minister of Aboriginal Affairs, Minister Responsible for Economic Development & Small Business, ONB and Immigration Carol Alderdice, President and CEO, Tourism Industry Association of NB