Three vignerons walk into a bar. This isn’t a joke; it’s true. I saw it happen and it was the beginning of a sort of wine tasting put on by friends—two old and one new—not long ago at the Archive Wine Bar in Toronto’s Little Portugal.

Google translates vigneron into “winemaker”. That’s not false, but it doesn’t quite cover the expanse of the word in French, at least as I understand it. For instance, my 1994 Oxford-Hachette French dictionary translates vigneron (and its feminine version, vigneronne) as “winegrower”. While one can certainly be both, it’s not necessarily the case.

Without authority, I have always thought the closest translation to vigneron was “vintner”. But when I looked up that word in my wife’s two-volume New Oxford Shorter English Dictionary (Thumb Index Edition, 1993), the definition for vintner was:

“A person who deals in or sells wine, a wine merchant. Formerly also, an innkeeper selling wine.”

This definition is similarly not a whole translation of my working knowledge of the word vigneron, but it’s certainly part of it. The three gentlemen, in progressive stages of middle age, who walked into the bar qualify for all three meanings of the term, though strictly speaking they rely on another person to physically make the wine under the label for which they bear at least some responsibility.

The first man in the door was Trevor Gulliver of London, England and La Livienère, France, who I have previously written about at The Hub, as both a vigneron and a restaurateur, at the famous St. John. Trevor, who is a friend, came bearing bottles of both the St. John label of French wines and Boulevard Napoleon, the label he owns and operates in the Languedoc with Benjamin Darnault.

The second man in the door was Artur Gama, proprietor with his wife Eva Moura Guedes, of Quinta da Boa of Esperança near Lisbon, Portugal. He and Trevor are themselves friends and most recently toured Artur’s newest venture the Quinta do Cardo vineyards in the uplands of the Douro Valley in the Northern end of the country, along with the third man.

And the third man was Charles Baker of Toronto, Ontario. Charles is also a friend who, nearly two decades ago, took me on my very first vineyard and winery tour (a story for another column). Charles runs Cru Wine Merchants, which imports Trevor and Artur’s wines, as well as Loop Line, a bottle shop and wine bar in its own right. Charles also lends his name to Charles Baker Riesling, his line of single vineyard Niagara white wines made at the winery at Stratus.

Of course, they all brought wines. Too many to enumerate and comment on in this limited column space. But, what danced for me in particular were the wines below.

The Charles Baker Riesling 2019 is a kind of Platonic ideal of the Niagara expression of the grape. It’s got a bit of sugar because it needs it to balance its northern climate acidity. It’s all lemons and, at a relatively young age, a hint of what the Brits would call petrol. It’s also $20 at my local provincial liquor retail monopoly, which is a feat on its own for this fancy wine. Charles Baker’s Riesling reminded me how much I like this grape and how well it does in Upper Canada.

Artur’s wines played on Atlantic maritime influence at Esperança or altitude from the hills of the upper Douro at Cardo. The 2020 Quinta da Boa Esperança Aristo Branco was a lovely mineral and citrus splash of white wine, which conjured dreams of a seaside lunch as long as its persistent finish. Cardo means “thistle”, a thorny plant that’s usually at home in northern latitudes like Scotland but also thrives in higher latitudes, like the 750 meters above sea level that the organic vineyards that make the 2019 Quinta do Cardo Tinto lie. A graphite seasoning, courtesy of granitic soils, ran through the deep black and blue fruit in this weighty yet spry wine. I’d save it for a slow-cooked, braised meat dinner on a cold autumn night.

Of Trevor’s wines, two stood out in particular. The 2019 St. John Claret is exactly as a decent bottle of Bordeaux red ought to be, which is to say it precisely delivers on the St. John brand, and at the first sip I was transported to a long lunch in London. This is a taste that’s hard to find on this side of the pond: a calm cassis-driven quaffer of a red. Nothing green, just a perfect balance of fruit, acidity, and a bit of sandy tannin to hold it all together. 

The star of the night for me, though, was from Trevor’s Minervois winery: the 2019 Boulevard Napoleon Carignan. The old vines that make this wine come from the La Livinière sub-appellation of Minervois, which lies in the rolling hills between Narbonne and Carcassone. But this wine can only be labelled “Vin de France”, the lowest possible designation, because making red wine with only Carignan is forbidden in the Conseil’s Cahier des Charges (book of rules).

As a young man, Trevor Gulliver made his mark in the London restaurant scene by converting old public buildings in looked-over neighbourhoods, like a firehall near Waterloo Station, into hip new destinations. He still does, and I like to think the Blvd. Napoleon single variety wines are a sort of extension of this vision. Carignan, in particular, is a grape that attracted little respect until recently. It was meant as a sort of filler to a blend from the Languedoc.

I had thoroughly enjoyed my share of a bottle of the 2015 Napoleon Carignan at lunch with Trevor in the summer of 2022, so I greedily eyed the bottle of the 2019 when it was pulled from Charles’ bag and put onto the table. I was not disappointed. Old vine Carignan from the terroirs of the Western Mediterranean can deliver a lightning-like energy of black fruit. It’s almost always tamed with red fruit Grenache in a blend, and it takes a kind of courage to let it be on its own. It might be too much. But sometimes too much is just enough. And this wine just makes me happy.

Perhaps the word vigneron defies definition because all really good things do. I am glad for the vignerons and vigeronnes out there pushing their vision and finding space in the market for it. Please keep the bottles coming.

Canada’s finance minister, Chrystia Freeland, will provide a fiscal update next Tuesday. It will not be pretty. 

Federal finances are under increasing strain from slowing economic growth, expanded affordability measures, new social programs (such as dental care), massive subsidies for battery plants, and, perhaps most important of all, rapidly rising interest rates. 

In fact, the monthly interest costs of the federal government are now at an all-time high. The latest available data for August shows federal interest costs exceeded $4.3 billion, surpassing the previous record of $4.03 billion set in December 1995. It’s more than double the pre-COVID amounts, as I illustrate below. And it’s the fastest acceleration in interest costs in recorded history.^{1While the fiscal monitor data does not extend further back than 1995, my own estimates of monthly costs inferred from the historical public accounts suggest very strongly that August 2023 is indeed an all-time record but I’m willing to be corrected.}

At this rate, annual interest costs could exceed $50 billion—four years ahead of schedule. 

All this means that when Minister Freeland updates the numbers next week, the federal deficit will almost surely grow. A lot.

In the PBO’s latest economic and fiscal outlook, they anticipated a $46.5 billion deficit this year—up from the budget’s $40 billion.

Other projections suggest we may see an even larger deficit. The latest projection by Finances of the Nation, which releases new figures every month, including a new set published last week, projects a deficit of just under $56 billion this year. 

That may be overly pessimistic, of course. But if it is even close to accurate, then it would be a very large increase indeed. Excluding the COVID-19 years, which are obviously an exception, it would be an over $20 billion increase over last year. That’d be the largest increase since the financial crisis. And controlling for the health of the economy (using what’s called the “cyclically adjusted budget balance”), it would be the largest deficit, as a share of the economy, since 1995.  

This doesn’t mean we’re headed over a fiscal cliff. 

Relative to the size of government or the overall economy, the burden of these high interest costs remains lower than it was in the mid-1990s. Far lower. In 1995, interest costs were 35 percent of revenue and nearly 6 percent of our entire economy. Today, even if interest costs exceed $50 billion, that would be 11 percent of revenue and less than 2 percent of GPD. And central banks should start lowering their policy rates next year, perhaps by spring or earlier, as inflation pressures recede. 

Canada is also not alone. Indeed, the situation abroad is even worse. Based on the latest data compiled by The Economist, the U.S. federal deficit is set to reach 5.7 percent of GDP this year, equivalent to roughly $165 billion in Canada. Borrowing in the Euro area is 3.4 percent. The U.K. is 3.9 percent. Indeed, of all the countries it tracks—developed and developing alike—only three expect a surplus: Australia, Denmark, and Norway. 

However good the company we may be in, though, Canada has a challenge on its hands. 

The federal government’s 2023 budget was based on a 10-year interest rate of approximately three percent. That may now have to increase by half a point, which could increase borrowing costs by several billion per year for the foreseeable future.

And if rates stay higher for longer, as many (including the Bank of Canada) now expect, the government’s debt levels may not be sustainable. 

Consider a situation where federal borrowing costs average 3.5 percent, government revenue and economic growth slow to an average of 3 percent, and government spending grows at 3.5 percent. I estimate that federal debt GDP by 2028 would reach 47 percent—roughly where it was at its highest level following COVID-19. This is far higher than the government’s plan for 40 percent that year.

Federal debt that grows faster than the economy is not sustainable. If the fiscal update shows that, alarm bells should ring.

What can Canada do? As I’ve noted before, sticking with the government’s own previous plans would be a good start. Ratcheting up spending plans with every single budget is an important reason why we’re in this situation. Looking ahead, those seeking to replace the current prime minister—whether within the Liberal Party or Pierre Poilievre of the Conservatives—should start considering options.

The longer we delay, the larger and more difficult our fiscal challenges will become.