Small Distillery Program
The Small Distillery Program provides grant payments to help Ontario distilleries grow their operations. Payments are based on production of spirits.
Offered by Ontario Agricorp
Amount
Up to $4.42 per litre of total eligible Spirits sold, up to a maximum of $220,000 per year per eligible Applicant, paid in two semi-annual payments
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Who can apply
“Small Distillery: means an Alcoholic Spirits producer (including its Affiliated Licensed Cideries) with annual sales of 900,000 litres or less of Worldwide Spirit Sales and 600,000 or less of Ontario Spirit sales (including Contract Production but not Contract Bottling).
These volumes are calculated as a combined total over the First Payment Period and the Second Payment Period.
To be eligible for funding, an Applicant is required to meet all of the following criteria:
- Be a legal entity that is a sole proprietor, corporation, partnership or unincorporated
association. Articles of Incorporation or other acceptable proof of legal name and status must be made available to Agricorp upon request;
- Be a Licensed Distillery and meet the definition of a Small Distillery or be deemed
eligible by the Ministry of Agriculture, Food and Agribusiness (OMAFA) to have sales of Spirits in Ontario assigned from a former business to the Applicant;
- Hold a valid Manufacturer’s Licence;
- Hold a valid Distillery Retail Store Endorsement;
- Hold a valid LCBO Direct Delivery Authorization if direct delivery sales of Spirits are
made in the Payment Period;
- Be an active producer of Alcoholic Spirits at the time of Application.
- Have appropriate governance structures, accountability and control processes in
place to administer and manage the grant funds;
- Submit a completed application form by the date and time indicated in these
Guidelines;
- Agree to comply with the terms and conditions of the Program as set out in these
Guidelines; and
- Be in compliance with and remain in compliance with all Requirements of Law.
Affiliated Licensed Distillers Only one affiliate within an Affiliated Licensed Distillery may apply to the Program in the Program Year on behalf of the entire group.
Not eligible:
If an Applicant sells more than 600,000 litres of Spirits in Ontario as the combined
total for the First Payment Period and Second Payment Period, or if Worldwide Spirit Sales exceed 900,000 litres as the combined total for the First Payment Period and Second Payment Period, the Applicant is no longer eligible to receive a Grant Payment in the Program Year
About the funding
The Small Distillery Program provides grant payments to help Ontario distilleries grow their operations. Payments are based on production of spirits.
To give Ontario distilleries more flexibility for planning and managing cash flow, the Small Distillery Program will now be paid on a semi-annual basis, instead of annually.
Table explaining the determination of Eligible Spirits Sales Volume that is not Spirits Fully Produced On-Site and the determination of Total Eligible Spirit Volume Sales Volume Sales Volume of Eligible Sales Total Eligible of Spirits Fully Spirits That Are Volume for Spirits Spirit Sales Produced On- Not Spirits Fully That Are Not Spirits Volume Site Produced On-Site Fully Produced On- (= Column A + (Column A) Site (Column B) Column C) (Column C – i.e. eligible Column B litres) Example 1 100,000 L 500,000 L 100,000 L 200,000 L Example 2 100,000 L 50,000 L 50,000 L 150,000 L Example 3 100,000 L 0L 0L 100,000 L Determination of Grant Payment Agricorp will determine the Applicant's Grant Payments based on their eligible Spirit sales volumes, within the limits of the Distillery Program Cap. Each eligible Applicant may receive up to $4.42 per litre of total eligible Spirits sold, up to a maximum of $220,000.00 per year, subject to the following:
- If an eligible Applicant’s total eligible Spirits sales volume exceeds 300,000 litres per
Show all funding details
calendar year, the Applicant will receive less than the Maximum Available Grant (i.e.
$220,000.00). Specifically, the Applicant’s Grant Payments will be reduced, or phased-out, proportionate to the volume above 300,000 litres that the Applicant has in eligible Spirits sales, based on the following formula:
Grant Payment = Maximum Available Grant - ((Applicant’s total eligible Spirits sales volume - 300,000) x phase-out rate of 0.73) Grant Payment = $220,000 – (Applicant’s total eligible Spirits sales volume – 300,000) x 0.73 Phase-Out Rate = $220,000 (Maximum Available Grant÷ (600,000 (Phased -Out End Volume) – 300,000 (Phased-Out Beginning Volume)) = 0.73
- The funding will be split into two Semi-Annual Payments; one for the First Payment
Period and one for the Second Payment Period. Each Semi-Annual Payment will be based on the Eligible Sales Volume that occurred in the corresponding Payment Period.
- The payment for First Payment Period will not include sales made by Direct Delivery
to Licensees and On-site retail store sales. Sales made by Direct Delivery to Licensees and On-site retail store sales for the full year (both Payment Periods) will be included in the payment for the Second Payment Period calculation.
- If an Applicant sells more than 600,000 litres of Spirits in Ontario as the combined
total for the First Payment Period and Second Payment Period, or if Worldwide Spirit Sales exceed 900,000 litres as the combined total for the First Payment Period and Second Payment Period, the Applicant is no longer eligible to receive a Grant Payment in the Program Year. The Grant Payment will be $0 and any payment received in the First Payment Period must be returned; and
- If total potential payments to all eligible Recipients under the Program exceed the
annual Distillery Program Cap, a proration rate will apply to each of their payments.
The proration rate will reduce proportionately each Recipient’s payment until the total payments to all eligible Recipients are within the annual Distillery Program Cap.
For greater clarity, this would result in each Recipient’s Grant Payments being reduced below the amount the eligible Recipient was originally calculated to receive, and therefore below the maximum $4.42/litre rate.
The formula for the proration rate is:
Proration rate = Distillery Program Cap Ă· total payments to all eligible Applicants The formula for the Grant Payment in this scenario would be:
Grant Payment = original Grant Payment – (original Grant Payment x proration rate).
Determination of Semi-Annual Grant Payments and Holdbacks The Grant Payment will be split into two Semi-Annual Grant Payments; one for the First Payment Period and one for the Second Payment Period. Each Semi-Annual Grant Payment will be based on the eligible spirit sales that occurred in the corresponding Payment Period and in accordance with the payment rates and calculations used to determine Payments.
The Grant Payment will be based on the sales of the two Payment Periods of eligible spirit sales.
LCBO sales data used for the purpose of calculating the Semi-Annual Grant Payment will align with the reporting dates described by the LCBO’s Financial Reporting Period Calendar, and may therefore differ from the dates of the Payment Period A minimum 25% holdback will be applied to the payment made for the First Payment Period to all eligible recipients under the Program and the maximum any Distillery may receive in the First Payment Period will be 50% of the Maximum Available Grant Payment, $110,000.
At Agricorp’s discretion, the holdback may be increased if Agricorp determines that a 25% holdback does not sufficiently protect from the risk that the Distillery Program Cap will be surpassed. Agricorp may also apply an additional holdback on an Applicant if there is a risk that an Applicant’s total Eligible Sales Volume for the Program Year will exceed 300,000 litres and be subject to the phase-out calculation.
This holdback will be fully or partially released with the payment for the Second Payment Period subject to the annual Distillery Program Cap (potential proration) and the volume of eligible Alcoholic Spirits sold not exceeding 300,000 litres (in which case the phase-out rate will be applied). If the volume of Alcoholic Spirits sold exceeds 600,000 in Ontario, , the Grant Payment will be $0 and any payment received in the First Payment Period must be returned.
The payment made for the First Payment Period sales volumes will not include sales made by Direct Delivery to Licensees and On-site sales. Sales volumes made by Direct Delivery to Licensees and On-site sales for the full calendar year will be included in the payment made for the Second Payment Period payment calculation.
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