VQA WINE SUPPORT PROGRAM

PROGRAM GUIDELINES 2015–16

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What’s New?

� Beginning in 2015/16, the renewed VQA Wine Support Program is being delivered by Agricorp on behalf of the Ministry of Agriculture, Food and Rural Affairs (OMAFRA).

� Beginning in 2015/16, the program will fund completed project activities, rather than proposed project activities.

� Eligible applicants may submit applications for grants up to the amount of the Maximum Available Grant for eligible expenditures incurred between April 1, 2014 and March 31, 2015 that were not funded through a grant from the 2014/15 program administered by the Ministry of Economic Development, Employment and Infrastructure (MEDEI).

� Eligible applicants must submit receipts for eligible expenditures for both the MEDEI grant received in 2014/15 and to support the current grant claim in 2015/16.

� In 2016/17, eligible applicants may apply for grants for up to 50% of eligible expenditures incurred between April 1, 2015 and March 31, 2016 that are up to the amount of the Maximum Available Grant for that winery.

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Program Overview

The VQA Wine Support Program supports Ontario wineries to help increase competitiveness and innovation while growing the sale of Ontario VQA wines at the Liquor Control Board of Ontario (LCBO). The Program will continue to provide grants to help wineries invest in growing their VQA wine business, including export and tourism development activities.

The Program will run for two years, 2015/16 and 2016/17 only, and will be overseen by Agricorp, an agency of the Ontario government.

The VQA Wine Support Program is part of the Ontario government’s five year, renewed Wine and Grape Strategy to help increase the sale of Ontario wines in and out-of province, and enhance the marketing of Ontario’s wine regions as tourist destinations.

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Applicant Eligibility

A Licensed Winery is a winery with a valid Alcohol and Gaming Commission of Ontario (AGCO) manufacturer’s licence.

Licensed Wineries are considered affiliated if:

� one of them is the subsidiary of the other, or

� they are subsidiaries of the same body corporate, or

� each of them is controlled by the same person.

VQA Table Wines are VQA wines sold through the LCBO, excluding:

� icewines, fruit wines, duty-free and other non-VQA wines

� wines sold through channels other than the LCBO (e.g. on or off-site wine stores and duty free stores)

� wines sold under the LCBO’s direct delivery program

VQA Table Wine Sales data is information about sales listed for the period of April 1, 2014 to March 31, 2015, compiled by LCBO and provided to Agricorp for the purposes of delivering the Program.

To be eligible to apply for funding, applicants are required to meet ALL of the following criteria:

� be 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 Winery or a corporation with a controlling interest in one or more Licensed Wineries;

� have production and sales of VQA Table Wines in Ontario, including sales of VQA Table Wines through the LCBO in the Project year;

� 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 applicable laws.

Affiliated WineriesOnly one licensed winery of a group of affiliated wineries may apply for the Program in a Funding Year.

Incorporated Licensed Wineries that are affiliated body corporates within the meaning of the Business Corporations Act (Ontario) will be considered to be one entity for the purpose of applying for the Program in a Funding Year, regardless of the number of AGCO manufacturers’ licences held by the affiliated Licensed Wineries.

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Program Timelines

Funding Year – April 1, 2015 to March 31, 2016 is the period when grant applications are submitted and Grant Payments are issued.

Project Year – April 1, 2014 to March 31, 2015 is the period when eligible expenditures were incurred.

Intake Period – June 22, 2015 to July 31, 2015 is the period during which grant applications will be accepted for the Funding Year.

Prior to the Intake Period, eligible applicants will receive a grant application form from Agricorp, along with their VQA Table Wine Sales Data. The applicant must complete and submit the application form within the Intake Period.

Funding YearProject Year

(Period of Eligible Expenditures) Application Intake Period

2015/16 April 1, 2014 – March 31, 2015 June 22, 2015 – July 31, 2015

Applicants must submit a completed application with details of expenditures incurred during the Project Year and associated documentation as required by these Guidelines.

The completed application will be reviewed by Agricorp to determine if the Program criteria has been met.

Determination of Maximum Available Grant

Maximum Available Grant is based on VQA Table Wine sales, overall Program funding, and the total number of eligible Licenced Wineries that participate in the Program in accordance with these Guidelines.

Supplier Quote is the value of the volume in litres of VQA Table Wine sold through the LCBO, according to the VQA Table Wine Sales Data compiled and provided by the LCBO.

Agricorp will determine the Maximum Available Grant by calculating the value of up to 30 per cent of the Supplier Quote of the eligible applicant’s VQA Table Wine sold during the Project Year.

Agricorp will calculate Maximum Available Grants for all eligible applicants in 25,000 litre tier increments, i.e. tier 1: 0 – 25,000L; tier 2: 25,000 – 50,000L; tier 3: 50,000 – 75,000L.

Note that once the Program calculation enters the tier which causes it to exceed its budget, Agricorp will allocate available grant funds remaining among the eligible applicants with sales in that tier to determine the Maximum Available Grant for those applicants.

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Determination of Grant Payments

Grant Payment is the amount of funds granted to an eligible applicant based on the Maximum Available Grant and the value of receipts for eligible expenditures submitted minus funds already provided to the applicant through the 2014/15 VQA Wine Support Program administered by MEDEI.

In 2015/16, grants may be provided for up to 100% of eligible expenditures incurred in the Project Year LESS funds already provided through the 2014/15 VQA Wine Support Program administered by MEDEI, up to the applicant’s Maximum Available Grant.

Grant Payment (Up to Maximum Available Grant) equals Total Eligible Expenditures (Incurred April 1, 2014 to March 31, 2015) minus MEDEI Grant amount previously received (Payment disbursed by MEDEI in 2014/15)

Example – Maximizing a Winery Grant Payment for 2015/16 onlyABC Winery received $50,000 in funding from the 2014/15 VQA Wine Support Program administered by MEDEI and the winery is eligible for a Maximum Available Grant of $60,000 from the Program in 2015/16.

SCENARIO 1:

� ABC Winery submits eligible expenditure receipts totalling $110,000 for the period April 1, 2014 to March 31, 2015

� Grant Payment (2015/16) is $110,000 minus $50,000 MEDEI Grant received previously = $60,000

� ABC Winery submitted sufficient receipts to claim its Maximum Available Grant

SCENARIO 2:

� ABC Winery submits eligible receipts totalling $90,000 for the period April 1, 2014 to March 31, 2015

� Grant Payment (2015/16) is $90,000 minus $50,000 MEDEI Grant received previously = $40,000

� ABC Winery did not submit sufficient receipts to claim its Maximum Available Grant

In both scenarios, the receipts are applied first to the funds received from the 2014/15 VQA Wine Support Program administered by MEDEI, and the remaining eligible receipts will be used to support the 2015/16 Grant Payment. At no time will Grant Payments exceed the total of eligible receipts submitted.

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Application ProcessPrior to the Intake Period, Agricorp will send application forms to all Licensed Wineries for which LCBO has reported eligible VQA Table Wine sales. Applicants must complete and submit an application during the Intake Period.

Applicants are asked to include on the application form a description of eligible business development projects and associated eligible expenditures as set out in the Guidelines. Receipts for all eligible expenditures must be submitted with the application.

If the application submitted is incomplete, Agricorp reserves the right to deem it ineligible.

Applying in Funding Year 2015/16 � complete and submit the application form

within the Intake Period

� include receipts for eligible expenditures with the application form

Note: Receipts for eligible expenditures will be applied first to the MEDEI Grant and any remaining receipts for eligible expenditures will be applied to the calculation of the Grant Payment for 2015/16.

Applying in 2016/17 Funding YearFor the 2016/17 funding year, grants may be available for up to 50% of eligible expenditures incurred during the project year April 1, 2015 to March 31, 2016, up to the applicant’s Maximum Available Grant. Receipts for eligible expenditures must be submitted with the application form.

Maximum Available Grants will be based on VQA Table Wine Sales Data for the period beginning April 1, 2015 and ending March 31, 2016, compiled by LCBO and provided to Agricorp for the purposes of delivering the Program.

Eligible ExpendituresApplicants must submit receipts for eligible expenditures, which must be related to business development and must have been incurred within the Project Year to be considered eligible.

Eligible expenditures include: � purchase of new production machinery

and equipment or a new technology

� purchase of Information and Communication Technology (ICT) equipment, software or services

� costs associated with the development of growth strategies, including export development and tourism development

� costs associated with the introduction of a new product to the domestic or export market

� salaries and wages that directly contribute to eligible project activities, e.g. implementation and set-up of new equipment, technology, systems, or growth strategies

� all marketing and promotion related expenditures consistent with Alcohol and Gaming Commission of Ontario Liquor Advertising Guidelines: Liquor Sales Licensees and Manufacturers, including salaries and wages directly related to sales, marketing and promotion activities in all markets (www.agco.on.ca/pdfs/en/guides/3099_a.pdf).

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Ineligible expenditures include: � expenditures claimed under any other

government program(s)

� harmonized sales tax

� payments to shareholders

� payments or rewards to owners/management

� any costs associated with government relations or advocacy efforts

� entertainment expenses, meals and alcoholic beverages

� salaries, wages, materials (such as wine grapes) and overhead costs associated with ongoing operations

� equipment depreciation and maintenance

� general working capital requirements, including debt services and taxes

� purchase of land or buildings

� mergers or acquisitions

� costs incurred outside of the Project Year.

Applicants will be required to provide invoices or equivalent documentation to support all expenditures submitted. Acceptable documentation for expenditures may be a paper copy, faxed copy, scanned copy or PDF of any of the following:

� invoice

� payment receipt

� cleared cheque (front and rear view)

� payroll ledger

� contract

� bank statement

� credit card slip/statement

� proof of on-line payment

� other documentation that supports the expenditure.

Additional information may be required at Agricorp’s request, if needed, to support the determination of whether the expenditure qualifies as an eligible expenditure. The determination of whether an expenditure is eligible for the purpose of the Program is at the sole discretion of Agricorp.

Additional Requirements for Grant RecipientsAs a condition of funding, recipients must provide accurate, timely and complete information to Agricorp when requested, including, without limitation, supporting documentation as required to verify the eligibility of the Applicant or to verify the accuracy of the Grant Payment to the Applicant. All project expenses must be supported by documentation as specified in these Guidelines. Any applicant who provides false or misleading information to Agricorp and/or its agent(s) may be disqualified and required to repay any payments received under the Program.

As a condition of funding, recipients must agree to participate in a benchmarking survey of wine and grape businesses that may be conducted as part of the Ontario government’s Wine and Grape Strategy.

Record Maintenance and ReviewEach Program applicant shall keep and maintain:

a) all financial records (including invoices) relating to the Grant Payment or otherwise to the project for which Grant Payment was provided in a manner consistent with generally accepted accounting principles; and

b) all non-financial documents and records relating to the Grant Payment or otherwise to the project, for which Grant Payment was provided, including all documents substantiating its competitive purchasing.

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Agricorp may conduct an audit or investigation of any applicant in respect of the expenditure of the Grant Payment and/or the project for which Grant Payment was provided. As a condition of funding, recipients must agree to provide information related to the Grant Payment and the project, as requested, and must also agree to permit access for audits, which may include site inspections, to be conducted by Agricorp and other persons as specified by Agricorp.

Agricorp reserves the right to recover any debts to Her Majesty the Queen in Right of Ontario. Any overpayments and other program debt will be recovered in a manner consistent with the Her Majesty the Queen in Right of Ontario’s collections practice and in consideration of applicable Government of Ontario legislation and directives. Should a recipient have any pre-existing debts owing to Her Majesty the Queen in Right of Ontario, Agricorp may recover against that pre-existing debt through a set-off against any payments a recipient may be eligible to receive under the Program.

Freedom of Information and Protection of PrivacyPlease note that Agricorp, as an agency of the Government of Ontario, is subject to the Freedom of Information and Protection of Privacy Act (Ontario). The Act provides every person with a right of access to information in the custody or under the control of Agricorp, subject to a limited set of exemptions.

Section 17 of the Act provides a limited exemption for third party information that reveals a trade secret or scientific, commercial, technical, financial or labour relations information supplied in confidence where disclosure of the information could reasonably

be expected to result in certain harms. Any trade secret or any scientific, technical, commercial, financial or labour relations information submitted to Agricorp in confidence should be clearly marked as such before submitting it to Agricorp. Before granting access to a record that is marked in that way, Agricorp will notify the applicable Program applicant before granting access to that record so that the applicant may make representations to Agricorp concerning its disclosure.

As a condition of funding, recipients acknowledge that Agricorp, OMAFRA and the LCBO may disclose and use reported VQA wine sales information for the purpose of determining Grant Payments under the Program.

The names and addresses of grant recipients, the amount of the Grant Payment, and the purpose for which Grant Payments are awarded is information that OMAFRA may make available to the public upon request.

ComplianceAs a condition of funding, recipients are responsible for complying with all applicable laws, including federal, provincial and municipal laws and regulations.

Failure to comply in any material respect with applicable laws and regulations may result in the termination of the Program application and approval process and termination of the Program payments, and may require the repayment of any funds received under the Program.

Agricorp and the Government of Ontario, including its ministries and public bodies, are not legally responsible for the consequences if the Program recipients fail to comply with any applicable laws and regulations.

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Other Considerations for Grant RecipientsAgricorp reserves the right to require repayment of funds provided pursuant to the Program that were obtained by ineligible participants or used for ineligible expenditures.

All Program payments are considered taxable income.

OMAFRA and Agricorp reserve the right to revise these Guidelines from time to time. It is recommended that applicants confirm with Agricorp that they have the most recent version of the Guidelines prior to making an application.

The Program is a discretionary non-entitlement program. OMAFRA and its agent, Agricorp, make no guarantees that all or any eligible applicants will receive funding under the Program. Applying to the Program does not create any legal or other right to payment under the Program.

Other Sources of FundingThe Program applicants will not receive grant funding under any program financed in part or in whole by the Government of Ontario for the same expenditure. Accordingly, applicants should take care not to receive or apply for funding for the same expenditure submitted for provincial funding under the Marketing and Vineyard Improvement Program.

Applicants are required to declare all other sources of federal, provincial and/or municipal funding, including the program(s) under which the funding is being provided, in relation to their Licensed Winery.

As a condition of funding, recipients acknowledge and agree to share upon request information on file with the Government of Ontario, or any of its agencies, in relation to any program which the Government of Ontario has funded, in whole or in part, for the purpose of ensuring against funding duplication and identifying funds that may be owing to the Province under any other provincial funding program.

For more information about the Program contact Agricorp:Telephone: 1-888-247-4999 orEmail: vqa@agricorp.comwww.agricorp.com

For more information about VQA Table Wine Sales Data contact LCBO:Jason Quan (416) 365-5717

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