73rd ANNUAL REPORT YEAR ENDING JANUARY 31, 2021 Cover photo credited to Mary Jane Combe READY TO GROW OUR VISION OUR MISSION Ontario-grown grape products will be demanded To achieve sustainable growth and profitability at home and recognized internationally. by creating an improved environment for Ontario-grown grape products.

OUR VALUES ACCOUNTABILITY RESPECT We are accountable to the grape growers for We understand the value of people to our organization’s decisions made and for the rationale upon which success. As such, we trust, respect and value the opinions these decisions are made. of all employees and grape growers. INNOVATION RESPONSIVENESS We support innovation through research, new technology We are responsive to the needs of the grape growers in a and continuous improvement of services provided to the timely manner so that they are supported in their activities grape growers. which improve their livelihood and economic health. QUALITY SERVICE We promote quality by developing and setting standards We exist to serve grape growers by providing them with for vineyard management for the grape growers. current, informative and supportive services in order to maintain and grow the industry in Ontario.

We strive to make clear the true value of our business and promote strong relationships that are crucial to making this industry grow and thrive in a healthy marketplace.

INDEX Our Organization 2-11 A Year in Review 12-25 Research and Programs 26-27 Financials 28-39

Year Ending January 31, 2021 2020-2021 BOARD OF DIRECTORS

Matthias Oppenlaender Bill Schenck Doug Funk Jr. Steve Pohorly Jim Morrison Chair Vice Chair Director Director Director

Robert Peck Brock Puddicombe Kevin Watson Erwin Wiens Scott Wilkins Director Director Director Director Director GROWERS’ DELEGATES

Niagara Peninsula Fruit and Vegetable Growers’ Association Steve Pohorly Ontario Fruit and Vegetable Growers’ Association Bill George Ontario Federation of Agriculture Jim Morrison Canadian Horticultural Council Matthias Oppenlaender Niagara Grape and Festival Erwin Wiens Greater Niagara Chamber of Commerce Bill Schenck Niagara-on-the-Lake Chamber of Commerce Erwin Wiens Niagara Region Agricultural Policy and Action Committee Bill Schenck Vintners’ Quality Alliance Kevin Watson F.A.R.M.S. Kevin Watson Wine Grape Industry Advisory Committee Matthias Oppenlaender, Bill Schenck, Kevin Watson, Steve Pohorly, Brock Puddicombe, Doug Funk Jr. Juice Grape Industry Advisory Committee Matthias Oppenlaender, Bill Schenck, Jim Morrison, Brock Puddicombe, Doug Funk Jr. Ontario Grape and Wine Research Inc. Matthias Oppenlaender, 4 Steve Pohorly STAFF

Chief Executive Officer Debbie Zimmerman Executive Assistant Gillian Williams Market Analyst Mary Jane Combe Project Manager Nick Lemieux Grower Relations/Ontario Grape and Wine Research Inc. (OGWRI) Eleanor Hawthorn Canadian Grapevine Certification Network Darien Temprile

SHARED STAFF

Treasurer Maureen Connell Office Manager/Accounts Payable Sylvana Lagrotteria

2020-2021 GROWERS’ COMMITTEE

Matthias Oppenlaender ◆ Bill Schenck ◆ Jeff Duc ◆ John Fedorkow ◆ Ben Froese Doug Funk Jr. ◆ Dan Lambert ◆ Jim Morrison ◆ Robert Peck ◆ Steve Pohorly ◆ Brock Puddicombe Craig Schmidt ◆ Martin Schuele ◆ Albrecht Seeger ◆ Chris Van de Laar ◆ Kevin Watson Erwin Wiens ◆ Philip Wiley ◆ Tom Wiley ◆ Scott Wilkins ◆ Chris Wismer

5 GREETINGS FROM THE HONOURABLE ERNIE HARDEMAN

On behalf of the Ontario government and the Ministry of Agriculture, Food and Rural Affairs, I appreciate the opportunity to express my admiration in the Grape Growers of Ontario’s Annual Report for the many growers that strive for excellence in producing high quality grapes that are turned into world class wine.

To grow grapes in Ontario is not an easy job. The climate and weather can present challenges that test a grower’s skill and patience. This past year has been especially trying as growers had to deal with the normal business challenges while needing to keep your families and employees safe during a pandemic. The pandemic has made your jobs more difficult and has added additional stresses to your lives. I am so very impressed that while dealing with these challenges, growers managed to produce what I understand was a banner year’s harvest with excellent quality.

I am very pleased that the provincial government continues to have an excellent relationship with the Grape Growers of Ontario. By working together, I know that the province’s grape producers will continue to innovate and grow your sector and your local and provincial economies.

At OMAFRA, we are committed to the success of Ontario’s agri-food sector and take great pride in your accomplishments. Thank you all for your dedication and I wish you all great success in the coming year.

Sincerely,

Honourable Ernie Hardeman Minister of Agriculture, Food and Rural Affairs GREETINGS FROM THE HONOURABLE MARIE-CLAUDE BIBEAU

Thanks to our innovative farm families, Ontario’s grape sector is among the best in the world.

I am immensely proud of the successes that grape growers continue to achieve.

This past year has been a challenging one. The Grape Growers of Ontario extended their generosity early in 2020 with a substantial donation toward the purchase of a ventilator and personal protective equipment for health workers, which showed how much our farm families care for their communities.

To help producers weather the challenges of the pandemic, our government listened and acted fast. We have directed almost $85 million to defray the costs of worker quarantine for the 2020–21 growing season and $11.6 million to help Ontario producers install equipment to keep their workers safe.

As always, you have your eye on the future. The Government of shares your vision for a strong and sustainable sector. We are proud to support exciting climate-action innovations, such as 35 new state-of-the-art weather stations, to help growers respond to a changing environment and further assist vineyards in ensuring the long-term viability of the Canadian grape and wine sector through the Canadian Grapevine Certification Network. These actions complement our national agri-environmental strategy, through which over $350 million will be allocated to programs that will help equip producers with the latest technologies and practices.

Finally, we are supporting the participation of women, youth, Indigenous peoples, and other underrepresented groups in Canada’s agriculture and agri-food sector. I am encouraged to see more women follow the example of your Chief Executive Officer, Debbie Zimmerman, in taking a seat at the leadership table.

Canadians take great pride in our delicious grapes and . Let’s continue working together to bring the Ontario grape and wine industry to new heights.

Hon. Marie-Claude Bibeau, PC, MP Minister of Agriculture and Agri-Food

57 GREETINGS FROM SAM OOSTERHOFF

Niagara West is home to some of Ontario’s finest wines and grape growers, and I have had the privilege of working with many representatives of the industry in my riding. It has been a pleasure collaborating with them to strengthen Ontario’s grape and wine industry.

I want to thank you for your hard work and community spirit as we have faced the challenges of COVID-19 together. I know this has been an extremely challenging and difficult year, and the sacrifices of our local growers and producers have been truly unprecedented.

Our government has provided a number of supports for the local grape and wine industry, including enacting pandemic provisions for takeout and delivery of wine, increasing choice and convenience for consumers by working to expand made-in-Ontario options at the LCBO, extending the and Grape Strategy to 2021- 22, providing $7.5 million annually for VQA Support, $4.8 million annually for marketing and promotion, $250,000 for research and $250,000 for benchmarking and continuing to support the Marketing and Vineyard Improvement Program.

Thank you for all the work you do to promote and expand grape growing in our province. The wine and grape sector contributes $515 million to Ontario’s GDP and supports more than 9,000 direct jobs. Grape production from almost 500 Ontario growers is used to make award-winning VQA wines, which had $370 million in VQA sales for the 12 months ending October 10, 2020.

Our government is committed to being a strong partner of the Grape and Wine Industry as we seek to rebuild and recover from COVID-19.

I look forward to continue working with the Grape Growers of Ontario, and bring greetings for a fruitful 2021!

In your service,

Sam Oosterhoff, MPP Niagara West

8 2019-2021GRAPE KING JOHN FEDORKOW

The selection of a Grape King is part of Ontario’s grape growing history and an annual tradition that dates back to 1956. The title of Grape King carries the distinction of being chosen based on vineyard management and knowledge of the industry, and in ‘normal’ years serves as a representative for Ontario’s grape and wine industry at events across the country.

With COVID-19 restrictions in place since March 2020 and the pause in activities, John had very limited opportunity to fully experience the role he was selected for. In September 2020, John graciously accepted the Board of Director’s request to extend his tenure as Grape King for the year 2020/2021.

John Fedorkow was born and raised on a mixed tender fruit farm in St. David’s, and graduated from the University of Guelph in 1980 with a Bachelor of Science in Agriculture.

John briefly left the area to sell crop protection for four years, two in and two back in Ontario, but following his desire to return to Niagara he purchased Fruithaven Farms in 1984 not far from where he grew up. The farm was planted with Labrusca grapes which were removed and replaced with tender fruit and berries, including strawberries, raspberries, apples, cling peaches, pears and plums. A Pick-Your-Own operation that gave school tours in the fall was developed.

After removing the apples in 1999 John began planting wine grapes, and underwent a major expansion into grapes in 2008 after the canning factory closure. John is currently growing 75 acres of vinifera grapes for Peller Estates and Creekside Estate Winery including Cabernet Sauvignon, , , Syrah, , , and Semillon.

A current member of the Grape Growers of Ontario’s Growers’ Committee and the Town of Niagara-on-the-Lake’s Agricultural Sub Committee, John is also the past president of the Niagara Peninsula Fruit and Vegetable Growers’ Association (NPF&VGA), past Vineland Growers director, and past member of the Town of Niagara-on-the-Lake’s Irrigation Committee.

John is married to Debbie and they have three children: Michael, Alex and Camille. Alex passed away on September 22, 2007 of an undiagnosed heart condition, Michael is a police officer with the Niagara Regional Police and Camille is a registered nurse in the Hamilton General CCU.

9 MESSAGE FROM YOUR BOARD CHAIR MATTHIAS OPPENLAENDER

2020 will be remembered as the year the world changed. On March 11, 2020 the World Health Organization declared the outbreak of a new strain of the novel coronavirus (COVID-19). This pandemic required growers to adapt quickly to a series of public health and emergency measures which included quarantines, cohorting, hand sanitizing and personal protective equipment. These measures became a new way of life for the agriculture sector, and we thank Honourable Ernie Hardeman, Minister of Agriculture, Food and Rural Affairs, Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food Canada, and our industry partners and growers who went above and beyond to ensure the health and safety of their workers during the 2020 growing season.

Your Board of Directors also answered the call from the Niagara Health Foundation to help in purchasing a much needed ventilator for patients stricken with COVID-19. In April, the GGO donated $66,000 for the purchase of this life saving equipment.

Despite the challenges of COVID-19, 2020 was a remarkable year for weather and the 100% Ontario wine produced. A fairly warm winter was followed by below average temperatures in April that threatened to delay budbreak across Ontario. Long hot days coupled with short but heavy rains created a fairly early harvest but by September and through October, dry weather provided ideal harvest conditions. While the overall grape crop was smaller at 69,842 tonnes and valued at $100.5 million, our total grape quality was exceptional.

On July 27th, the GGO and Processors came to an agreement on the 2020 grape prices, with an overall price increase of 1% for grape classes 5 to 10f. On August 19th, an agreement was reached with Wine Growers Ontario for Classes 1, 2 and 3. Class 2 (Niagara and Wiley White) was increased to match Class 1 (Concord) and an overall 1% was agreed to for all varieties. In addition, a separate Plateau pricing schedule was established for and Chardonnay.

COVID-19 shuttered most events including the Grape Growers of Ontario Celebrity Luncheon and Grape King installation. Current Grape King John Fedorkow graciously agreed to extend his term for an additional year - a first in Grape King history.

We offer our deepest sympathies to the families of the following members we lost this year including Adam Cherrie, Lambert Hunse, Ernie G. Wiens, Marlene Wiley, Jean Matiuschuk, John Skubel, George Werner III, Phil Ryan, Don Wiley, Hertha Neumann, Lois Schenck, Bob Bowen, Joseph Pohorly, Mona Morrison, and Martin Molek.

While the world continued to struggle with COVID-19 there were some bright moments to celebrate and recognize members of our industry. I extend congratulations to both John Peller and Len Pennachetti who were named as members of the Order of Canada for their outstanding contributions to the grape and wine industry, and our CEO, Debbie Zimmerman, who was awarded an Honorary Doctorate of Laws from Brock University.

I know many of us will look back on 2020 as the year that reshaped our lives but working together, we accomplished much during very challenging conditions. A special thank you to our industry partners, research community, provincial and federal governments, our Board of Directors, Growers’ Committee and my dedicated Vice Chair, Bill Schenck for their continued support. Finally, thank you to our dedicated staff for their continued support to our members.

Matthias Oppenlaender Chair, Grape Growers of Ontario

10 MESSAGE FROM YOUR CEO DEBBIE ZIMMERMAN

2020 will be remembered as a “global stress” test. By mid-March, the world pandemic was announced - shuttering businesses, forcing emergency stay-at-home orders and establishing unprecedented safety protocols. GGO was able to seamlessly transition and maintain operations remotely through at-home technology and the wonders of “Zoom”. Committee meetings, staff meetings, and district meetings including annual elections were all conducted and managed successfully through video conferencing.

COVID-19 and early shut-down orders closed most winery retail stores in the spring. Wineries with expanded online sales pivoted quickly to expand these services. Many wineries who rely on tourism and hospitality saw their sales evaporate. The sale of wine has increased this past year for those who had access to open sales channels and the ability to pivot to e-commerce, for both VQA and International Domestic Blend.

The COVID-19 outbreaks on farms, particularly in Southwestern Ontario, required rapid response from Public Health and both the Federal and Provincial Governments to establish on-farm safety protocols. Working collectively with other commodity organizations, GGO participated in numerous housing standards meetings to ensure workable and reasonable solutions were developed to assist growers while maximizing workers safety. We thank Minister Hardeman and his team for their support and leadership, and the unwavering support of F.A.R.M.S.

In July, a partial agreement was reached between industry and the federal government on Australia’s World Trade Organization challenge to federal and provincial polices that have supported the domestic wine industry and 100% Ontario grown grapes. GGO, along with Ontario Craft Wineries (OCW), continue to press for replacement programs both federally and provincially that help grow and build on the reputation of the Canadian wine industry rather than undermine the future of our domestic industry.

GGO continues to work with other industry organizations through the Ontario Fruit and Vegetable Growers’ Association for improvements to the Business Risk Management programs, successfully achieving expanding crop insurance perils to include production losses due to COVID related labour issues.

In February, the final year of the Marketing and Vineyard Improvement Program was announced. GGO launched a new, near real-time industry weather network to replace an older network. Forty-nine weather stations that refresh every minute and can now provide information on temperature, wind, rain, humidity, barometric pressure, forecast and historical records were installed across the province. The data is also available as a smartphone app and through eGrape.

The CLEan plAnt extractioN SEquencing Diagnostics (CLEANSED) project led by Canadian Grapevine Certification Network (CGCN) received $6.35 million in federal funding to commercialize high-throughput sequencing for the certification of virus-tested propagation material.

Consumers are increasingly concerned where their products come from and sustainability of production. GGO and OCW are working together to simplify certification, and provide clear direction for both sustainable wine making and grape growing.

COVID-19 has created fear and uncertainty for everyone but I am very proud of the work of GGO staff through a challenging and unforgettable year. A special thanks to Matthias Oppenlaender, Chair, Vice Chair Bill Schenck, Board of Directors and Growers’ Committee for their commitment to the success of the GGO.

Debbie Zimmerman CEO, Grape Growers of Ontario

11 LOCAL GRAPES MAKE A DIFFERENCE The 2020 harvest produced a crop of 69,842 tonnes which includes 401 tonnes of juice grapes and 69,441 tonnes of wine grapes, valued at $100.5 million.

Grapes “naturally frozen” on the vine produce Ontario’s premier Icewine. This year 850 tonnes were left hanging for Icewine, which has the potential to produce between 127,500 and 148,750 litres. Temperatures dipped below -8oC in January for the Icewine harvest.

GOVERNMENT RELATIONS UPDATE

On July 27, 2020, Canada and Australia announced a partial agreement regarding Australia’s World Trade Organization challenge against Canada, DS537: Canada—Measures Governing the Sale of Wine.

As part of the agreement, the Government of Canada agreed to repeal by June 30, 2022, the federal excise duty exemption on wine as set out in subsection 135(2) of the Excise Act, 2001. There were also a number of measures within the challenge maintained by the province of Ontario that were agreed to as part of the understanding, including:

1 The Government of Ontario will ensure that no additional restricted and wine authorizations are authorized under Ontario Regulation 232/16 and that any existing restricted beer and wine authorizations are converted to unrestricted beer and wine authorizations by August 31, 2020. 2 The Government of Ontario commits to eliminate the tax difference between Ontario wine and non-Ontario wine sold in off-site winery retail stores, including wine boutiques. The existing tax differential on wines sold in off-site winery retail stores will be phased out within three years from the date this understanding takes effect. In furtherance of this commitment, the government will introduce legislation in Ontario’s Legislative Assembly to eliminate the tax difference, and fully support its passage. 3 The Government of Ontario commits to make the following amendments to Ontario Regulation 232/16: • By the end of Year one from the date this understanding takes effect, 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. • By the end of Year two from the date this understanding takes effect, amend subsection (2) in section 25 to reduce the amount of dedicated shelf space from 50% to no more than 45%. • By the end of Year three from the date this understanding takes effect, amend subsection (2) in section 25 to reduce the amount of dedicated shelf space to no more than 40%.

The Federal Government continues to work with the provincial governments and the domestic wine industry to seek a fair and equitable outcome for Canada’s 100% homegrown grape products.

124 LOCAL GRAPES ARE GOOD FOR ONTARIO

When you buy a VQA or 100% Ontario wine, you are buying a quality wine of origin, supporting local growers and the jobs they create, and giving back to Ontario’s economy and the environment!

This year we launched a #BetweenTheVines video series on Instagram and YouTube, which highlighted the hard work and dedication that goes into growing world class 100% Ontario grapes.

Our proximity, our vineyards and our shared community values gives growers a unique and viable role to play in the promotion of wines made of locally grown grapes. Increased demand for Ontario grape products translates into demand for Ontario grapes. Our goal is to ensure consumers and stakeholders alike understand that local grapes make a difference.

In addition to consumer targeted outreach, we have also partnered with CCOVI on a webinar series “Bringing Learning and Technology Together” which features videos on virus sampling, crop estimation and economic crop management.

(photo credit: David Wiley) (photo credit: Robert Tymczyszyn, Niagara Dailies) Peter Buis, grape grower Matthias Oppenlaender, Chair, Grape Growers of Ontario, on a Zoom call with Roger Ali, President and CEO, Niagara Health Foundation

John Fedorkow, Daniel Speck, Matthias Oppenlaender, Matthias Oppenlaender, MP Vance Badawey, Debbie Hon. Ernie Hardeman, MP Chris Bittle and MPP Sam Zimmerman, Hon. Mary Ng, Carolyn Hurst, MP Chris Oosterhoff at Henry of Pelham Estate Winery Bittle, Bill Schenck and Richard Linley at 13th Street Estate Winery

135 PRODUCTION TABLE I

Table 1 presents the production and disposition of grapes from 2016 through 2020. TABLE I – Tonnage Processed by Category

5.8 % 7.3 % 87.2 % 84.8 % 0.3 % 0.4 %

1.3 % 1.3 %

5.4 % 6.2 %

2016 | TOTAL TONNES 70,851 2017 | TOTAL TONNES 87,567

6.0 % 6.6 % 86.8 % 86.8 % 0.4% 0.5%

1.4 % 0.4 %

5.4 % 5.7 %

2018 | TOTAL TONNES 64,773 2019 | TOTAL TONNES 81,115

5.4 % 92.7 % 0.2% WINE

0.5 % ICEWINE AND LATE HARVEST WINE

1.2 % JAMS AND JUICE DISTILLING & PLATEAU PRICING 2020 | TOTAL TONNES 69,842

Processing Prices Icewine and Late Harvest Grapes On July 27, 2020, under unique circumstances the Grape Growers The minimum price to be paid for all grapes left on the vine to be of Ontario and the Processors came to a consensus on the 2020 used for Icewine is 129% of the price based upon normal harvest at grape prices of an overall 1% increase. the appropriate sugar level determined by samples taken at regular harvest time. On August 19, 2020, an agreement was reached with Wine Growers Ontario for Classes 1, 2 and 3. The price for Class 2 (Niagara and Late harvest hybrid and vinifera juice at 26° Brix $4.68 per litre Wiley White) was increased from $495 to $525, and an overall price Hybrid Icewine juice at 35° Brix $9.26 per litre increase of 1% was agreed to for each variety. Vinifera Icewine juice at 35° Brix $19.60 per litre

The minimum price established for each class of grapes sold for processing in 2020 compared with the 2019 prices is shown in TABLE II. 14 PROCESSING PRICES FOR GRAPES TABLE II

TABLE II – Processing Prices for Grapes ($ per tonne) CLASS VARIETY 2019 2020 PLATEAU PRICE

1 Concord, Fredonia, Patricia, President, Suffolk Red and Van Buren $525 $530 2 Niagara and Wiley White $495 $530 3 Delaware, Elvira, Himrod, Sovereign Coronation, Veeblanc and Veeport $601 $607 5 De Chaunac and Rosette $752 $760 5a Leon Millot and Marechal Foch $889 $899 5b Baco Noir, Castel, Chambourcin, Chancellor, GR7, Le Commandant and Villard Noir $964 $975 5c Frontenac, Marquette $962 $973 5d Experimental Red Hybrid, Florental, Landot, Red Amourensis, Varousset $733 $741 6 New York Muscat and V64111 $593 $600 7 , Cayuga White, J.S. 23-416 and S.V. 23-512 $554 $560 7a Seyval Blanc and Vidal 256 $674 $681 7b Geisenheim Hybrids, GM 311, GM 318 and GM 322 $582 $588 7c Experimental White Hybrid, Traminette, V65232 and White Amourensis $512 $518 9 J. Riesling $1,548 $1,554 $1,265 9a Auxerrois, Kerner, Scheurebe and Welsch Riesling $1,353 $1,368 9b Chardonnay Musque and Chardonnay $1,580 $1,593 $1,270 9c Gewurztraminer $1,729 $1,736 9d Pinot Gris, Pinot Blanc $1,808 $1,832 9e Sauvignon Blanc, Semillon $1,769 $1,792 9f Muscat Ottonel $1,446 $1,463 9g $1,446 $1,463 9h Aligote, Alsace Muscat, , Experimental White Vinifera, $1,377 $1,394 French Colombard, Gruner Veltliner, Melon de Bourgogne, Morio Muscat, Ortega, Rieslaner, Riesling Traminer, Savignin, Sylvaner 10 Gamay and Zweigeltrebe $1,401 $1,418 10a $2,122 $2,147 10b Cabernet Sauvignon $2,050 $2,075 10c Cabernet Franc $1,830 $1,852 10d Merlot, Petit Verdot $2,067 $2,092 10e Shiraz and Syrah $2,396 $2,425 10f $1,653 $1,673 10g Blauberger, Experimental Red Vinifera, Limberger, , Nebbiolo, $1,483 $1,501 Petite Sirah, Pinot Meunier, , St. Laurent, Blau, Zinfandel Distilling $128 $128 Sherry $306 $306

15 VALUE OF CROP PURCHASED TABLE III – Farm Gate Value of Grapes Purchased by Processors

$115,011 $109,082 $100,518 $95,316

$82,527

2016 2017 2018 2019 2020

GROSS FARM GATE VALUE ($’000)

2020 Cheque Day was held on Monday, November 16th under unusual circumstances due to COVID-19. New protocols were in place to ensure the health and safety of staff and our members, with cheques distributed through a pick-up window located before the main entrance of the GGO Board office and everyone practicing physical distancing. With the pandemic restrictions throughout the year, GGO was pleased with the opportunity to greet growers in person and provide branded face masks.

164 LICENCE FEES TABLE IV

In the aggregate, licence fees for the 2020-2021 fiscal year represent approximately 1.2% of the total farm gate value of the crop, consistent with 2019-2020.

TABLE IV – Licence Fees per Tonne by Class and Variety (*R & D fees not collected in 2020) CLASS VARIETY 2019 2020

1 Concord, Fredonia, Patricia, President, Suffolk Red and Van Buren $7.00 $7.00 2 Niagara and Wiley White $7.00 $7.00 3 Delaware, Elvira, Himrod, Sovereign Coronation, Veeblanc and Veeport $7.00 $7.00 5 De Chaunac and Rosette $14.35 $12.35 5a Leon Millot and Marechal Foch $15.30 $13.30 5b Baco Noir, Castel, Chambourcin, Chancellor, GR7, Le Commandant and Villard Noir $15.80 $13.85 5c Frontenac, Marquette $15.80 $13.85 5d Experimental Red Hybrid, Landot, Lucy Kuhlman and Red Amourensis $14.20 $12.20 6 New York Muscat and V64111 $13.20 $11.20 7 Aurore, Cayuga White, J.S. 23-416 and S.V. 23-512 $12.95 $10.95 7a Seyval Blanc and Vidal 256 $13.80 $11.80 7b Geisenheim Hybrids, GM 311, GM 318 and GM 322 $13.15 $11.15 7c Experimental White Hybrid, Traminette, V65232 and White Amourensis $12.65 $10.65 9 J. Riesling $19.90 $17.90 9a Auxerrois, Kerner, Scheurebe and Welsch Riesling $18.55 $16.60 9b Chardonnay Musque and Chardonnay $20.15 $18.15 9c Gewurztraminer $21.15 $19.15 9d Pinot Gris, Pinot Blanc $21.75 $19.85 9e Sauvignon Blanc, Semillon $21.45 $19.55 9f Muscat Ottonel $19.20 $17.25 9g Viognier $19.20 $17.25 9h Aligote, Alsace Muscat, Chenin Blanc, Exp. White Vinifera, French Colombard, $18.70 $16.80 Gruner Veltliner, Melon de Bourgogne, Morio Muscat, Ortega, Rieslaner, Riesling Traminer, Savignin, Sylvaner 10 Gamay and Zweigeltrebe $18.90 $16.95 10a Pinot Noir $23.90 $22.05 10b Cabernet Sauvignon $23.40 $21.55 10c Cabernet Franc $21.90 $20.00 10d Merlot, Petit Verdot $23.55 $21.65 10e Shiraz and Syrah $25.85 $24.00 10f Dornfelder $20.65 $18.75 10g Blauberger, Experimental Red Vinifera, Limberger, Malbec, Nebbiolo, $19.45 $17.55 Petite Sirah, Pinot Meunier, Sangiovese, St. Laurent, Wildbacher Blau, Zinfandel Distilling $5.50 $5.50 Sherry $7.75 $7.75

Note: 2020 Vertically Integrated Tonnage licence fee rebate is $2.00 per tonne.

175 PRODUCTION OF PROCESSED GRAPES BY VARIETY TABLE V

TABLE V – Purchases by Processors by Variety (in tonnes)

Class Variety 2016 2017 2018 2019 2020

1 Concord, Fredonia, etc. 1,143 1,491 1,004 417 242 2 Niagara and Wiley White 636 535 509 185 159 3 Sovereign Coronation, etc. - 2 9 5 0 SUB-TOTAL (Labrusca) 1,779 2,028 1,522 607 401 5 De Chaunac and Rosette 259 240 317 251 187 5a Leon Millot and Marechal Foch 923 819 1,018 899 879 5b Baco Noir, Chambourcin, etc. 4,464 5,282 5,967 5,835 5,275 5c Frontenac, Marquette 189 380 768 903 915 5d Exp. Red Hybrid 104 85 76 77 94 6 New York Muscat and VG4111 13 12 3 0 2 SUB-TOTAL (Red Hybrids) 5,952 6,818 8,149 7,965 7,352 7 S.V. 23-512, Aurore, etc. 167 138 82 74 44 7a Seyval Blanc and Vidal 256 16,291 22,686 16,595 21,192 19,007 7b Geisenheim Hybrids 1,013 1,089 941 907 617 7c Experimental White Hybrid 41 69 59 122 89 SUB-TOTAL (White Hybrids) 17,512 23,982 17,677 22,295 19,757 SUB-TOTAL (Hybrids) 23,464 30,800 25,826 30,260 27,109 9 J. Riesling 8,764 11,642 7,383 10,688 7,989 9a Auxerrois, Kerner, etc. 229 318 131 161 148 9b Chardonnay Musque and Chardonnay 9,772 11,406 7,604 9,552 7,746 9c Gewurztraminer 1,982 2,222 1,199 1,645 1,424 9d Pinot Gris, Pinot Blanc 3,064 3,627 2,804 3,708 3,385 9e Sauvignon Blanc, Semillon 2,291 3,439 1,809 3,308 2,670 9f Muscat Ottonel 404 507 353 488 420 9g Viognier 158 154 88 144 94 9h Aligote, Alsace Muscat, Chenin Blanc, 337 183 112 148 160 Exp. White Vinifera, etc. SUB-TOTAL (White Vinifera) 27,001 33,498 21,483 29,842 24,036

18 10 Gamay and Zweigeltrebe 1,724 1,889 1,586 1,770 1,529 10a Pinot Noir 2,957 3,295 2,296 2,803 2,563 10b Cabernet Sauvignon 3,193 3,650 2,646 3,470 2,861 10c Cabernet Franc 5,547 5,998 4,467 5,955 4,994 10d Merlot, Petit Verdot 4,071 5,231 4,112 5,337 5,163 10e Shiraz and Syrah 677 791 524 693 819 10f Dornfelder 105 99 107 159 140 10g Blauberger, Experimental red vinifera, 333 288 204 219 227 Petite Sirah, Pinot Meunier, Sangiovese SUB-TOTAL (Red Vinifera) 18,607 21,241 15,942 20,406 18,296 SUB-TOTAL Vinifera 45,608 54,739 37,425 50,248 42,332 TOTAL Hybrid & Vinifera 69,072 85,538 63,251 80,508 69,441 GRAND TOTAL 70,851 87,567 64,773 81,115 69,842

TABULATION OF GROWERS WITH PRODUCTION TABLE VI

The number of growers with production registered with the Grape Growers of Ontario in 2020 decreased by 3 from 471 in 2019 to 468 in 2020.

TABLE VI – Number of Growers with Production Registered with the Board

2016 2017 2018 2019 2020 District 1 Niagara-on-the-Lake and Niagara Falls 190 188 184 180 179 District 2 St. Catharines, Fort Erie, Pelham, Port Colborne, 36 34 31 31 32 Thorold, Wainfleet and Welland District 3 Town of Lincoln 147 145 150 142 143 District 4 Wellington and Hamilton, Grimsby and West Lincoln 18 15 14 9 8 District 5 Brant, Chatham-Kent, Essex, Elgin, Haldimand, Lambton, 37 38 30 30 27 Middlesex, Norfolk and Oxford District 6 Prince Edward and all other geographic areas not included 62 67 72 79 79 in Districts 1 to 5 TOTAL 490 487 481 471 468

19 WINE SALES IN ONTARIO TABLE VII

Table VII below shows the five-year history of wine sales in Ontario. VQA wine sales in Ontario increased by 1.1%, and total wine sales in Ontario increased by 2.6% to 205.5 million litres in 2020. Ontario (VQA & NON-VQA/ICB) wine sales increased by 2.7% to 89.3 million litres. Imported wine sales increased by 2.5% to 115.6 million litres, while out-of-province wine sales in Ontario decreased by 0.4% to 599 thousand litres.

Table VII – Wine Sales in Ontario (by Volume, ‘000s litres) % Change 2016 2017 2018 2019 2020 2019 TO 2020 VQA Sales in Ontario** 17,929 17,889 19,350 19,800 20,018 1.1% Non-VQA/ICB Sales in Ontario 63,048 66,034 68,046 67,110 69,267 3.2% Ontario VQA & Non-VQA/ICB Wine 80,977 83,923 87,396 86,910 89,285 2.7% Sold in Ontario* Imported Wine Sold in Ontario 111,481 112,954 115,808 112,754 115,614 2.5% %Out-of-Province Sales in Ontario 684 648 668 601 599 -0.4% Total Wine Sold in Ontario 193,142 197,525 203,871 200,265 205,498 2.6% VQA Sales Outside Ontario** 1,597 2,407 2,648 2,376 1,904 -19.9

Fiscal Year April 1 to March 31 (statistical data provided by the LCBO) * Includes sales through LCBO, Winery Retail Stores, Direct Delivery to Licensees, embassies, airlines and industrial sales ** VQA figures from VQAO Annual Report – March 31, 2020

Virtual Election of the 2020/21 Growers’ Committee This Davis Vantage Pro2 weather station is one of almost 50 stations in the GGO’s ever growing real-time weather network.

204 MARKET SHARE OF WINE SOLD IN ONTARIO TABLE VIII

TABLE VIII – Market Share of Wine Sold in Ontario (by Volume)

9.29 % 9.06 % 9.49 % 9.89 % 9.74 %

32.64 % 33.43 % 33.38% 33.51% 33.71% 58.07 % 57.51 % 57.13 % 56.60 % 56.55 %

2016 2017 2018 2019 2020

VQA ONTARIO NON-VQA/ICB IMPORTED

BLENDING MATERIALS IMPORTED INTO ONTARIO TABLE IX

TABLE IX shows the quantity of blending grape product imported into Ontario over the last five years. The requirement of 25% Ontario grape content in a bottle of wine continues to be in effect. Wine imported for blending purposes decreased by 22% from 26.5 million litres to 20.8 million litres.

TABLE IX – Blending Materials Imported into Ontario 2016 2017 2018 2019 2020 Wine (litres) 33,108,056 30,279,644 28,635,023 26,535,787 20,756,701

Statistical data provided by LCBO

215 IMPORTATION OF WINE TABLE X

TABLE X presents the quantity of importation of wine categories from 2016-2020. The total imports of wine categories in Canada increased 3.48% from 334.7 million litres in 2019 to 346.4 million litres in 2020.

TABLE X – Quantity of Importation of Wine Categories (‘000 litres) 2016 2017 2018 2019 2020 Aperitif 700 643 415 407 410 1,386 1,470 1,568 1,549 1,600 Miscellaneous wines 8,817 9,112 8,667 8,384 7,872 Port 1,530 1,461 1,415 1,383 1,446 Sherry 481 469 446 419 429 (includes crackling table) 12,975 14,473 16,343 17,040 17,655 Still wine 301,243 303,968 306,068 303,630 314,852 Vermouth 2,075 2,015 1,988 1,942 2,156 TOTAL 329,207 333,611 336,910 334,754 346,420

Statistical data provided by Association of Canadian Distillers and Wine Growers Canada.

TABLE XI

TABLE XI shows the volume of still table wine by country of origin imported into Canada from 2016-2020 inclusive. In 2020, total importation of still table wine into Canada increased by 3.7% from 303 million litres in 2019 to 314.8 million litres in 2020. Italy remains the largest importer into Canada for 2020.

TABLE XI – Importation of Still Table Wines by Country of Origin (‘000 litres) 2016 2017 2018 2019 2020 Australia 40,970 40,520 40,726 39,584 41,884 Eastern Europe 461 373 400 339 286 France 48,350 49,959 52,184 52,808 56,173 Germany 4,057 3,896 3,656 3,260 3,370 Italy 57,629 59,783 60,773 59,360 58,781 Portugal 7,960 8,459 9,634 10,306 10,863 South Africa 8,365 8,316 7,997 7,395 6,857 South America 41,538 39,885 37,859 36,492 37,052 Spain 19,227 20,305 20,878 23,037 24,274 United States 60,077 57,717 56,220 55,203 58,597 Other Countries 12,608 14,754 15,741 15,846 16,715 TOTAL 301,242 303,967 306,068 303,630 314,852

Statistical data provided by Association of Canadian Distillers and Wine Growers Canada.

22 CROP INSURANCE TABLE XII

Data included in TABLE XII below was supplied by Agricorp, the Corporation responsible for delivering Crop Insurance Programs and providing the statistical history of the Grape Crop Insurance Program, 2016-2020 inclusive. The number of accounts decreased by 10 in 2020. In total, 86 claims were made in 2020 valued at $1.08 million.

TABLE XII – Crop Insurance No. of No. of Total Premiums Total Claims Premiums less Accounts Claims * $’000 $’000** Claims $’000 2016 268 48 5,670 622 5,048 2017 266 26 4,953 347 4,606 2018 278 147 4,518 4,171 347 2019 280 50 4,364 791 3,573 2020 270 86 4,397 1,084 3,313

* Total grower and government premiums **Claims data refers to approved claims only - Data is as of January 27, 2021 and is subject to change Crop Insurance data for 2018 has been adjusted MEMBERSHIPS TABLE XIII

The Grape Growers of Ontario is a contributing member to a number of agricultural and trade organizations. The organizations supported in the 2020/2021 year include:

Membership Amount Agricultural Adaptation Council 150 British Columbia Grape Growers Association 150 Canadian Horticultural Council 12,177 Drinks Ontario 1,200 Farm and Food Care 1,950 Greater Niagara Chamber of Commerce 346 Grimsby and District Chamber of Commerce 275 Lincoln Chamber of Commerce 270 Ontario Agricultural Commodity Council 1,000 Ontario Fruit & Vegetable Growers’ Association 25,000 Ontario Federation of Agriculture 500 President’s Council 400 St. Catharines Club 800 TOTAL 44,218 SPONSORSHIPS TABLE XIV

The Grape Growers of Ontario is a contributing sponsor to a number of agricultural and trade organizations. The organizations supported in the 2020/2021 year include:

Sponsorships Amount 2020 i4C Virtual Weekend Celebration 5,000 OFVC Women in Agriculture Breakfast 1,000 Ontario Fruit & Vegetable Convention 1,000 Official Guide To Wineries of Ontario 2,475 Total 9,475

PROMOTION EXPENSES TABLE XV

In 2020-2021, the Grape Growers of Ontario continued to engage consumers and industry through social media: Facebook, Twitter, Youtube and Instagram. While limited in-person events took place throughout the year, the GGO continued to support a number of activities including a virtual International Cool Climate Chardonnay Celebration (i4C).

TABLE XV – Promotion Expenses Promotion 2018/2019 2019/2020 2020/2021 Promotions, Sponsorship & Public Relations 104,744 109,590 51,262 Miscellaneous – Wines 6,928 7,047 144 SUB-TOTAL 111,672 116,637 51,406

Grape & Wine Festival and Grape King’s Crowning 22,578 23,080 930 International Cool Climate Chardonnay Celebration 20,000 20,000 $5,000* Niagara on the Hill 4,999 Consumer Mobilization Campaign 57,255 MNP Economic Impact Study 28,959 Proof Strategies 37,000 TOTAL 154,250 250,930 94,336

*2020 Virtual Event

24 2020 WEATHER REPORT

Summary of 2020 growing season for Ontario’s Weather in June was superb with warmer than average grape growing regions temperatures and drier conditions (see Figure 1). These optimal Prepared by Dr. Jim Willwerth, Brock University growing conditions continued with warm temperatures, low humidity and some periodic rains to provide adequate moisture Overall summary of the 2020 growing season to the vines. The ideal conditions during the bloom period, in late The 2020 growing season will be remembered as a very strong June (Table 2), resulted in excellent fruit set for most cultivars. vintage for Ontario’s viticultural areas. Summary of growing degree day (GDD) and total rainfall during the growing season The warm weather continued to be above average in July with for the Niagara Peninsula, Lake Erie North Shore, and Prince below average rainfall. Heat waves occurred in July that led to Edward County can be found in Table 1. GDD some periods of high humidity and periodic heavy rainfall in accumulation was very slow at the start of the season but heat some regions in Ontario, such as Lake Erie Northshore and the units accumulated rapidly with the warmer temperatures from Niagara Peninsula (Figure 1). The trend of warmer than average June through September. In fact, by the end of July the growing temperatures continued into August across all of Ontario’s season in the Niagara Peninsula had the most heat accumulation appellations. Veraison began in the 2nd and 3rd week of August since 2012. Heat units continued to accumulate between veraison in most regions (see Table 2). September and October were fairly and harvest, into November with an extended growing season dry and sunny, albeit a bit cooler than normal at times as shown without a severe frost. This led to a long maturation window for in Figure 1. Cooler nights, warm, but not hot fall days led to great optimal sugar accumulation and colour/flavour development for maturation and very clean fruit, even for rot-sensitive cultivars later maturing cultivars. Overall heat accumulation was warmer such as Pinot noir. Greater heat accumulation between veraison than the past 15-year average and similar to the 2016 vintage. and harvest led to an earlier harvest for some cultivars such as Precipitation was lower than average. Pinot gris and Sauvignon blanc and created optimal conditions for later maturing red cultivars such as Cabernet franc. A Growing season temperatures, precipitation events can be found combination of good yields and excellent fruit quality at harvest in Figure 1. The winter was warmer and longer than average will result in superb wine quality across most cultivars and wine which had mainly positive implications for the growing season. styles from sparkling to red wines. The warmer winter, with no prolonged periods of cold, limited any freeze injury in grapevines heading into the growing season. While winter had no significant freeze events, late winter and early spring were colder than normal across Ontario’s grape growing regions (See Figure 1)

The cold spring delayed bud break until a few weeks into May (see Table 2), which spared the grapevines from any frost damage. These colder temperatures got the growing season off to a slow start especially in cooler regions like Prince Edward County. Fortunately, temperatures warmed up rapidly following bud break. Very warm temperatures coupled with high soil moisture levels led to exceptional vine growth in late May and into June.

Table 1. Summary of Growing Degree Days and total rainfall across Ontario’s Appellations Figure 1. Summary of temperature and rainfall data throughout the 2020 growing season. Vineland, ON. (May to December 2020)

Appellation Region Growing Precipitation Degree Days (mm) Table 2. Snapshot of key phenological stages within the Niagara Peninsula. 2020.

Niagara NOTL 1610 343 Peninsula Variety Location Bud Bloom Veraison Niagara Vineland 1550 335 break Peninsula Lake Erie Colchester 1516 416 Chardonnay Beamsville May 22 June 22 Aug 23 North Shore Bench Prince Edward Hillier 1306 301 County

255 ONTARIO GRAPE AND WINE RESEARCH INC. (OGWRI)

The objective of OGWRI is to enhance the profitability and sustainability of the Ontario grape and wine industry through directed and coordinated financing of research and development activities.

Matthias Oppenlaender is the Chair, and the Board of Directors has representatives from GGO, Ontario Craft Wineries, and Wine Growers Ontario. A technical committee establishes annual research priorities and reviews research project proposals. The top research priorities for OGWRI in 2020 were: Red Blotch, Leafroll and Multi-coloured Asian Lady Beetle (MALB).

In 2020, OGWRI administered the Research and Innovation Development Initiative under the Marketing and Vineyard Improvement Program. Funding from Year 4 went towards the following projects: • Fine tuning PCR detection for quantification of Spotted Wing Drosophila and evaluating fruit susceptibility • Field evaluations of a weather-based model for timing fungicide treatments for grapevine fungal diseases • Pathway markers of cold hardiness in Merlot, Cabernet Franc and Cabernet Sauvignon enhanced by treatment with Abscisic Acid Analog • VineAlert 2020-2021

MVIP projects are funded by the Ontario Ministry of Agriculture, Food and Rural Affairs.

OGWRI is also supporting the Canadian Grape and Wine Science Cluster by providing the industry contribution for Ontario led research activities within the national cluster.

All completed projects and information on current projects can be found on the Ontario Grape and Wine Research Inc.’s website: www. ontariograpeandwineresearch.com

MARKETING AND VINEYARD IMPROVEMENT PROGRAM (MVIP)

The new Marketing and Vineyard Improvement Program (MVIP) assisted grape growers by providing cost-share funding through the Canadian Agricultural Partnership by the Ontario Ministry of Agriculture, Food and Rural Affairs for projects to help vineyards across the province adapt to ongoing and emerging growing challenges. The program will also contribute to vineyard investments that implement new technologies to supply high-quality grapes to Ontario wine producers. MVIP was delivered by Agricorp, an agency of the Ontario government.

Growers are investing in a variety of vineyard improvements including: • trickle irrigation • weather sensors • non-acoustical pest management • viticulture consulting • viticulture equipment – spray drift reduction, leaf removal

2645 CANADIAN GRAPEVINE CERTIFICATION NETWORK

The objective of the Canadian Grapevine Certification Network (CGCN) is to advance the Canadian grape and wine industry by ensuring a sustainable supply of certified propagative grapevine material. The CGCN is the culmination of a collaborative effort between the Grape Growers of Ontario, Grape Council, Conseil des vins du Québec, and the Grape Growers Association of .

The CGCN, led by Chair Hans Buchler and Vice Chair Bill Schenck, has actively engaged with CFIA, researchers and nurseries across the country in order to work toward the common goal of ensuring Canadian growers and wineries have access to clean grapevine material. CGCN has recently amended their long-term Certification Program to allow certification of existing vineyard blocks using High-Throughput Sequencing (HTS) technology. This will allow CGCN to fast-track the availability of certified virus-free grapevine material from three years to only one year or less! They are open to applications from nurseries at any level(s) to join this program.

CGCN has also developed an Interim Verification Program to aid nurseries in producing saleable grapevines with a low risk of virus infection of Leafroll 1, Leafroll 3, Red Blotch and Pinot Gris Virus through virus testing of the existing propagative blocks and removal of infected plants and associated plants with high risk of infection. Custom Propagation is also available for grape growers and wineries under the Interim Verification Program. Please visit the CGCN website for more information regarding the Interim Verification and long-term Certification programs under the certification tab: cgcn-rccv.ca/site/grapevine-certification.

CGCN pays due-diligence to the Canadian grape and wine industry by ensuring that grape varieties of importance now and in the future are made available to the propagating sector. If you have one or more varieties that you would like to see available through the Certification Program, submit your recommendations at www.cgcn-rccv.ca/site/contact. By following this link, you will also be able to subscribe to CGCN’s e-newsletter.

In addition to developing a Certification Program, the CGCN has led the Canadian Grape and Wine Science Cluster under the Canadian Agricultural Partnership AgriScience program which is administered by Agriculture and Agri-Food Canada.

CROP PROTECTION REPORT

In 2020, the industry obtained registration of several pesticides through the efforts of Jim Chaput, Minor Use Coordinator, OMAFRA, and Pest Management Regulatory Agency (PMRA). Dr. Wendy McFadden-Smith, OMAFRA, assisted with various pest management issues including those related to minor use registrations and represented grapes at the virtual Minor Use Priority Setting Workshop to highlight priorities. Wendy also represented the industry at the Fruit Technical Working Group which is responsible for the inclusion of products in Publication 360C “Crop Protection Guide for Grapes”. New registration and label expansions have been approved for LifeGard, Aceta and Vayego as of December 2020.

Pest Management Regulatory Agency (PMRA) is currently re-evaluating many pesticides. These products are at different stages of review with target dates of publication of final decisions. The GGO and OFVGA are working with the industry task force to engage PMRA in further discussion regarding re-evaluations. The decisions could range from something as innocuous as ensuring proper personal protective equipment to cancellation of uses. Until that date, growers will be able to use the product; however, sales are generally terminated the year before. Check current labels at the Pest Management Regulatory Agency (PMRA) website at http://pr-rp.hc-sc.gc.ca/ls-re/index-eng.php.

There are over 70 documented spotted lanternfly hosts in North America, including grapevines, fruit trees (apple, peach, plum, cherry), hops and hardwoods (black walnut, maple). Swarms of nymphs and adults damage plants directly by feeding on plant sap and indirectly by excreting large amounts of honeydew (sugary waste) that promotes the development of sooty mold and interferes with photosynthesis. The sooty mold also attracts insects such as ants, wasps and bees. It has recently been detected in Michigan and New York. To date, this insect has not been detected in Ontario but it is an excellent hitchhiker. There are currently no insecticides registered for spotted lanternfly in Canada. For more information refer to this post ONFruit blog: https://onfruit.ca/spotted-lanternfly-getting-too-close-for-comfort/.

275 Grant Thornton LLP 80 King Street Suite 200 St. Catharines, ON L2R 7G1

T +1 905 682 8363 F +1 905 682 2191 www.GrantThornton.ca INDEPENDENT AUDITOR’S REPORT

To the Members of Grape Growers of Ontario

Opinion We have audited the financial statements of Grape Growers of Ontario, which comprise the statement of financial position as at January 31, 2021, and the statements of operations and unrestricted net assets, restricted net assets, and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the organization as at January 31, 2021, and its results of operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

Basis for opinion We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the organization in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of management and those charged with governance for the financial statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the organization’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the organization or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the organization’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit.

Audit | Tax | Advisory © Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd

284 We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the organization’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the organization’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the organization to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

St. Catharines, Canada Chartered Professional Accountants February 25, 2021 Licensed Public Accountants

Audit | Tax | Advisory © Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd

295 GRAPE GROWERS OF ONTARIO STATEMENT OF OPERATIONS AND UNRESTRICTED NET ASSETS - YEAR ENDED JANUARY 31

Revenues 2021 2020 Licence fees $ 1,162,186 $ 1,683,594 Vertically integrated rebate (29,538) (35,458) Appropriation for research and development (341) (340,984) 1,132,307 1,307,152 Government and industry funding for research projects 189,507 17,641 Canada emergency wage subsidy 55,976 - Government and industry funding for promotional projects 5,137 39,850 Government grant, loan and subsidy 28,220 - Interest and other income 119,976 117,908 1,531,123 1,482,551 Expenses Directors’ fees and honoraria 112,170 95,165 Salaries and benefits (Note 3) 607,852 611,996 Travel 29,574 78,911 Meetings and conventions 3,981 31,965 Office supplies and expenses 46,871 38,459 Postage 7,243 7,153 Telephone 18,046 20,195 Dues and subscriptions 31,205 28,622 Professional fees (Note 4) 198,307 300,570 Utilities and maintenance 17,965 25,294 Building insurance and property taxes 14,153 13,242 Amortization 15,320 18,222 Community support covid 66,000 - Assessment O.F. & V.G.A. 25,000 25,000 Research and other projects (Note 5) Grape Growers funded portion 132,105 149,739 Government and industry funded portion 189,507 17,641 Promotional projects (Note 5) Grape Growers funded portion 52,336 139,718 Government and industry funded portion - 35,526 Professional development 130 279 Maintenance agreements 7,273 17,000 Labour issues coordinating committee 5,000 5,000 Loss on disposal of capital assets - 1,985 Bad debts (recovery) (979) 353 Expense recoveries from other associations (37,313) (40,342) 1,541,746 1,621,693

(Deficiency) excess of revenues over expenses (10,623) (139,142) Unrestricted net assets - beginning of year 1,056,502 1,195,644 Unrestricted net assets - end of year $ 1,045,879 $ 1,056,502

See accompanying notes to the financial statements

304 GRAPE GROWERS OF ONTARIO STATEMENT OF RESTRICTED NET ASSETS - YEAR ENDED JANUARY 31

Research and promotion fund 2021 2020

Revenues $ - $ - Expenses International cool climate chardonnay celebration (5,000) (20,000) Niagara Day on the Hill - (4,999) MNP Economic Impact Study - (28,959) Consumer Mobilization Campaign - (57,255) Advocacy Campaign (37,000) - Deficiency of revenues over expenses (42,000) (111,213) Fund balance - beginning of year 315,323 426,536 Fund balance - end of year $ 273,323 $ 315,323

Operational Reserve Fund balance - beginning of year $ 2,000,000 $ 2,000,000 Transfer from unrestricted net assets - - Fund balance - end of year $ 2,000,000 $ 2,000,000

Ontario Grape and Wine Research Fund

Growers contributions Revenues Growers fees $ 226 $ 164,579 Interest contribution - 42,136 Expenses Contributions to OGWRI (292,623) (197,400) (Deficiency) excess of revenues over expenses (292,397) 9,315 Fund balance - beginning of year 559,954 550,639 Fund balance - end of year $ 267,557 $ 559,954 Processor contributions Revenues Processors fees $ 115 $ 176,405 Interest contribution - 42,136 Expenses Contributions to OGWRI (292,623) (197,402)

(Deficiency) excess of revenues over expenses (292,508) 21,139 Fund balance - beginning of year 522,348 501,209 Fund balance - end of year $ 229,840 $ 522,348 Total Ontario Grape and Wine Research Fund $ 497,397 $ 1,082,302

See accompanying notes to the financial statements

315 GRAPE GROWERS OF ONTARIO STATEMENT OF FINANCIAL POSITION - JANUARY 31

Assets 2021 2020 Current Cash $ 1,263,070 $ 1,726,749 Guaranteed investment certificates (Note 6) 2,504,169 2,979,665 Accounts receivable (Note 7) 97,064 70,722 Contributions receivable (Note 5) 96,083 17,186 Prepaid expenses 51,691 65,173 4,012,077 4,859,495

Long-term Due from related parties (Note 8) 107,786 116,814 Investments (Note 9) 191,867 191,867 Property and equipment (Note 10) 10,748 12,371 310,401 321,052 $ 4,322,478 $ 5,180,547

Liabilities Current Accounts payable and accrued liabilities (Note 11) $ 362,483 $ 520,646 Government remittances payable 52,996 155,374 Deferred contributions (Note 5) 50,400 50,400 465,879 726,420

Long-term Loan Payable (Note 12) 40,000 - 505,879 726,420

Net assets Unrestricted Invested in other entities 191,867 191,867 Available for operations 854,012 864,635 1,045,879 1,056,502

Restricted Research and promotion fund (Page 4) 273,323 315,323 Operational reserve (Page 4) 2,000,000 2,000,000 Ontario Grape and Wine Research Fund (Page 4) 497,397 1,082,302 2,770,720 3,397,625 $ 4,322,478 $ 5,180,547 On behalf of the board

Director Director See accompanying notes to the financial statements

324 GRAPE GROWERS OF ONTARIO STATEMENT OF CASH FLOWS - YEAR ENDED JANUARY 31

(Decrease) in cash 2021 2020

Operating (Deficiency) of revenues over expenses for the year $ (10,623) $ (139,142) Research and promotion fund deficiency of revenues over expenses (42,000) (111,213) Ontario Grape and Wine Research Fund Growers deficiency of revenues over expenses (292,397) 9,315 Processors deficiency of revenues over expenses (292,508) 21,139 Amortization 6,043 6,319 (631,485) (213,582)

Changes in non-cash working capital Accounts receivable (26,342) (47,270) Contributions receivable (78,897) 28,553 Interest receivable 39,485 (53,713) Prepaid expenses 13,482 (18,219) Accounts payable and accrued liabilities (158,163) 117,911 Government remittances payable (102,378) 49,590 (944,298) (136,730)

Financing Long-term loan proceeds 40,000 -

Investing Repayments from related parties 9,028 (8,396) Purchase of property and equipment (4,418) (6,293) Purchase of guaranteed investment certificates (1,782,097) (2,157,106) Proceeds of guaranteed investment certificates 2,218,106 2,248,328 440,619 76,533

(Decrease) in cash (463,679) (60,197) Beginning of year 1,726,749 1,786,946 End of year $ 1,263,070 $ 1,726,749

See accompanying notes to the financial statements

335 GRAPE GROWERS OF ONTARIO NOTES TO THE FINANCIAL STATEMENTS - JANUARY 31, 2021

1. Nature of operations The Grape Growers of Ontario is a board which operates under the Farm Products Marketing Act, established for the purpose of marketing and promoting Ontario grapes for processing. The board is a not-for-profit organization incorporated without share capital under the laws of Ontario, and is exempt from income taxes under the Income Tax Act.

2. Significant accounting policies The financial statements were prepared in accordance with Canadian accounting standards for not-for-profit organizations in Part III of the CICA Handbook and include the following significant accounting policies:

Financial instruments

Measurement The board initially measures its financial assets and liabilities at fair value, except for certain non-arms length transactions.

Financial assets or liabilities obtained in related party transactions with a person or entity whose sole relationship with the board is in the capacity of management are accounted for in accordance with financial instruments.

The board subsequently measures all of its financial assets and financial liabilities at amortized cost.

Financial assets and liabilities measured at amortized cost include cash, guaranteed investment certificates, accounts receivable, contributions receivable, amounts due from related parties, accounts payable and accrued liabilities, government remittances payable, deferred revenue and deferred contributions.

Impairment Financial assets measured at cost are tested for impairment when there are indicators of impairment. Previously recognized impairment losses are reversed to the extent of the improvement provided the asset is not carried at an amount, at the date of the reversal, greater than the amount that would have been the carrying amount had no impairment loss been recognized previously. The amounts of any write-downs or reversals are recognized in excess of revenues over expenses for the year.

Fund accounting The board follows the deferral method of accounting for government and industry contributions and reports using fund accounting.

The board follows the restricted fund method of accounting for grower contributions. Revenues and expenses related to marketing operations and administrative activities are reported in the operating fund. Revenues and expenses related to research activities are reported in the research fund. Fees and payments collected from growers and processors and contributed to Ontario Grape and Wine Research Inc. (OGWRI) are reported in the Ontario Grape and Wine Research Fund. The operational reserve fund reports the net assets which have been restricted by the board as an operational reserve.

Revenue recognition The Grape Growers of Ontario has the authority to collect licence fees under the provisions of the Farm Products Marketing Act. Fees are recognized as the crop is received, weighed and graded by processors and collection is reasonably assured.

344 GRAPE GROWERS OF ONTARIO NOTES TO THE FINANCIAL STATEMENTS - JANUARY 31, 2021

Amortization Property and equipment which are shared with other marketing boards are capitalized by Grape and Tender Fruit (Ontario) Limited. The amortization charge for property and equipment is reported according to the cost sharing arrangement by each benefiting board.

Property and equipment which are used exclusively by The Grape Growers of Ontario are capitalized by the board. Amortization is recorded for property and equipment that it owns and carries in its financial statements.

Investments Investments in joint ventures and significantly influenced investees are accounted for using the equity method. The equity method is a basis of accounting for investments whereby the investment is initially recorded at cost and the carrying value, adjusted thereafter to include the investor’s pro-rata share of post-acquisition earnings of the investee, computed by the consolidation method. Profit distributions received or receivable from an investee reduce the carrying value of the investment.

Investments in the subsidiaries are accounted for using the cost method.

The cost method is a basis of accounting for investments whereby the investment is initially recorded at cost; earnings from such investments are recognized only to the extent received or receivable.

Property and equipment Property and equipment are initially measured at cost and subsequently measured at cost less accumulated amortization. Amortization is provided over the estimated useful life of the asset using the following methods and rates: Computer hardware 30% Declining balance Computer software 100% Declining balance Furniture and equipment 20% Straight-line

The estimated useful lives of property and equipment are reviewed by management and adjusted if necessary.

The company tests for impairment whenever events or changes in circumstances indicate that its carrying amount of an item may not be recoverable. An impairment loss is recognized when the carrying amount of the asset exceeds the sum of undiscounted cash flows resulting from its use and eventual disposition. The impairment loss is measured at the amount by which the carrying amount of the long-lived asset exceeds its fair value.

Use of estimates Management reviews the carrying amounts of items in the financial statements at each statement of financial position date to assess the need for revision or any possibility of impairment. Many items in the preparation of these financial statements require management’s best estimate. Management determines these estimates based on assumptions that reflect the most probable set of economic conditions and planned courses of action.

These estimates are reviewed periodically and adjustments are made to excess of revenue over expenses as appropriate in the year they become known.

Items subject to significant management estimate include the allowance for doubtful accounts and amortization.

355 GRAPE GROWERS OF ONTARIO NOTES TO THE FINANCIAL STATEMENTS - JANUARY 31, 2021

3. Salaries and benefits 2021 2020 Total salaries and benefits $ 676,643 $ 675,405 Recoveries: Project management (25,391) (30,409) Ontario Grape and Wine Research Inc. (43,400) (33,000) $ 607,852 $ 611,996

4. Professional fees 2021 2020 Audit $ 19,800 $ 18,650 Legal 92,251 187,709 Industry consulting 86,256 94,211 $ 198,307 $ 300,570

364 GRAPE GROWERS OF ONTARIO NOTES TO THE FINANCIAL STATEMENTS - JANUARY 31, 2021

5. Contributions for research and other activities

(Deferred) Government/ Government/ Grape Growers (Deferred) Receivable Industry Industry of Ontario Receivable Contributions Contributions Expenses Portion Contributions Received January February 1, 2020 (Repaid) 2020/21 2020/21 2020/21 31, 2021 Research and other Projects: Pesticide initiatives $ (19,692) $ - $ - $ - $ (19,692) Grape Mealybug Research (1,920) - - - (1,920) Canadian Experience Fund - International Cool Climate Wine Symp. 147 70,820 137,528 - 66,855 CAP 0167 - Wash Water 3,365 3,876 1,015 1,340 504 CAP 0174 - Weather Monitoring 13,674 35,914 50,964 101,372 28,724 (4,426) 110,610 189,507 102,712 74,471

Non-grant funded research 29,393 GGO portion of research activities $ 132,105

Promotional projects: Celebrity luncheon (28,788) - - - (28,788) (28,788) - (28,788)

Non-grant funded promotion 52,336 GGO portion of promotion activities 52,336

$ (33,214) $ 45,683

Comprised of: Contributions receivable $ 17,186 $ 96,083 Deferred contributions (50,400) (50,400) $ (33,214) $ 45,683

6. Guaranteed investment certificates

The board has guaranteed investment certificates that mature in 2021 and 2022 and earn interest between 0.85% and 3.10% (2020 - 2.5% and 3.10%).

7. Accounts receivable 2021 2020 Accounts receivable $ 41,088 $ 71,701 Canada emergency wage subsidy 55,976 - Allowance for doubtful accounts - (979) $ 97,064 $ 70,722

375 GRAPE GROWERS OF ONTARIO NOTES TO THE FINANCIAL STATEMENTS - JANUARY 31, 2021

8. Related party transactions

The Grape Growers of Ontario exercise significant influence over Ontario Grape and Wine Research Inc. (OGWRI), an entity incorporated to perform research and development activities related to the grape and wine industries. Transactions with OGWRI, include recovery of salaries (disclosed in note 3) and contributions to research projects (disclosed in the statement of changes in internally restricted net assets).

The Grape Growers of Ontario is related to Grape & Tender Fruit (Ontario) Limited (GTFOL), a jointly controlled enterprise who operates the marketing boards’ shared offices and who owns the shared land and building.

The Grape Growers of Ontario’s proportionate share of GTFOL is as follows:

2021 2020 Assets $ 361,719 $ 361,719 Liabilities 169,872 169,872 Net assets $ 191,847 $ 191,847

Expenses include a $116,529 (2020 - $121,603) charge for the board’s share (50% (2020 - 50%)) of management operation costs incurred during the year by GTFOL. These amounts are recognized in the form of allocated rent payments at the exchange amount by the board, and represent the board’s share of the revenue and expenses of the joint venture.

Amounts due from / to related parties:

2021 2020 GTFOL $ 107,787 $ 116,814 Trade payable with GTFOL 2,001 3,491

9. Investments

2021 2020 Grape & Tender Fruit (Ontario) Limited 94 common shares (47% interest) $ 47 $ 47 1,918 special shares (40% interest) 191,800 191,800 Ontario Grape and Wine Research Inc. 20 common shares (50% interest) 20 20 $ 191,867 $ 191,867

384 GRAPE GROWERS OF ONTARIO NOTES TO THE FINANCIAL STATEMENTS - JANUARY 31, 2021

10. Property and equipment Accumulated Net Book Value Cost Amortization 2021 2020 Furniture and equipment 12,568 10,054 2,514 5,027 Computer hardware 23,953 15,719 8,234 7,345 Computer software 2,749 2,749 - - 39,270 28,522 10,748 12,372

The Grape Growers of Ontario’s portion of amortization for property and equipment carried on its balance sheet for 2021 was $6,043 (2020 - $6,319).

11. Accounts payable and accrued liabilities

2020 2019 Accounts payable and accrued liabilities $ 164,872 $ 200,371 Grading fees payable 197,611 320,275 $ 362,483 $ 520,646

12. Loan Payable

During this fiscal period, the organization applied for the CEBA loan and received $40,000 to cover current year expenses impacted by the COVID-19 pandemic. At year-end the board believes that they will be able to repay the loan by December 31, 2022 and therefore the forgivable portion of the loan has been recognized as grant income. No principal payments are required until 2022 but voluntary payments can be made at any time without fees or penalities. In the event that there is a remaining balance after December 31, 2022, it shall be converted to a non-revolving three-year term loan at a 5% interest, maturing on December 2025.

13. Financial instruments

The board is exposed to various risks through its financial instruments. The following analysis provides a measure of the board’s risk exposures and concentrations at January 31, 2021:

Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The board’s main credit risks relate to its accounts receivable. The board provides credit to its growers in the normal course of its operations.

Market risk Market risk is the risk that the fair value or expected future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. The board is mainly exposed to interest rate risk.

(i) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The board is exposed to interest rate risk with respect to its fixed rate guaranteed investment certificates. Given the composition of financial instruments, the board is subject to a fair value risk. ADDRESS 1634 South Service Road, St. Catharines, Ontario L2R 6P9 Phone: 905.688.0990 Fax: 905.688.3211 Email: [email protected] Web: www.grapegrowersofontario.com 2019-2021GRAPE KING www.localgrapes.ca JOHN FEDORKOW

John Fedorkow was crowned Grape grapegrowersofontario King on September 18th, 2019 at his @grapegrowersont family’s Niagara-on-the-Lake vineyards @grapegrowersont and graciously agreed to extend his term for an additional year