June 22, 2017 12:12 am
Updated: June 23, 2017 9:18 am

Canadian breweries take on Alberta government’s beer tax

Beer produced by Saskatoon-based Great Western Brewing Company.

File / Global News

A case that’s been brewing since last summer will go to trial Thursday and Friday in Calgary.

Great Western Brewing and Steam Whistle Brewing put forth separate but similar complaints last year, alleging that a markup on beer by the Alberta government is unconstitutional.

On Aug. 5, 2016, the markup was set to $1.25 per litre. It applies no matter where the beer is brewed, but a separate action gave Alberta brewers access grants that offset the tax.

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READ MORE: Great Western, Steam Whistle earn court injunction in Alberta beer battle

According to CEO of Great Western Brewing Michael Micovcin, this discriminates against out-of-province beer.

“We certainly have no issue with the government supporting local craft breweries. But we think there are other options that are constitutional, that are trade compliant,” said Micovcin.

“But unfortunately the current government has chosen not to introduce a policy that’s constitutional and trade compliant.”

He said the tax has had a devastating effect on out-of-province brewery revenue. Alberta makes up for over 60 per cent of Great Western’s market, so lower sales have a big impact.

“It’s our largest province, it’s our number one invest to grow province, so this change that took place last year has had significant impact on the business,” he said. “Our future viability is at risk, so we had no choice but to launch this legal challenge.”

READ MORE: Great Western Brewing expects ‘substantial’ hit on sales after Alberta beer markup

Due to the higher tax, the cost of a 24-case of beer has gone up by about $7. This means some breweries have been pulling products off the shelves in Alberta, because they just aren’t selling at the hiked prices. Micovcin also says this puts a strain on the relationship between the western provinces, and could even result in an interprovincial trade war.

“There’s been talk, and there’s risk of, retaliation from other provinces,” he said. “B.C., Alberta, Saskatchewan and Manitoba are supposed to be all part of what we call the New West Partnership.”

“You now have the new Canadian Free Trade Agreement, yet this is going to potentially derail interprovincial trade relations across the country.”

The case is expected to last two days. On Thursday, Great Western Brewing and Steam Whistle Brewing will present their arguments before the government gets a chance to defend itself on Friday. (KLM)

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