August 14, 2018 1:11 pm

Ontario beer tax to rise this fall despite return of ‘buck-a-beer’

Ontario Premier Doug Ford announced the provincial government's buck a beer plan while visiting a brewery in Picton, Ont.

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The cost of beer in Ontario is about to get more expensive this fall despite the province’s promise to offer buck-a-beer to consumers by Labour Day weekend.

According to the Ministry of Finance website, the basic tax rate for beer will rise three cents per litre on Nov. 1.

For craft brewers, the price of draft beer will go from 35.96 to 38.96 cents per litre, while non-draft beer will go from 39.75 to 42.75 cents per litre.

The increase is part of the 2015 Ontario budget brought in by the Liberal government, which called for a three-cent hike on Nov. 1 between 2015 and 2018.

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Global News reached out to the ministry’s office for comment but did not hear back by the time of publication.

READ MORE: Here’s how much it costs to make a can of craft beer

Many craft brewers who have come out against the “buck-a-beer” plan, which brings down the lowest price that beer can be sold for in Ontario by 25 cents from $1.25 starting Aug. 27, said they won’t be participating.

Mark Murphy, co-founder of Left Field Brewery in Toronto, said that given the significant equipment investment for a new brewery, rising prices for raw ingredients, operating expenses and paying employees a living wage, selling beer at $1 is almost impossible.

VIDEO: Peterborough craft brewer reacts to ‘buck-a-beer’

“It’s really so far removed from what’s possible for someone on our scale making more of a premium product,” he said. “We could sell beer for a dollar, but we’d be losing money on every can and that wouldn’t make sense long term.”

On top of production costs, consumers could be paying more for small-batch brews as aluminum prices are set to rise amid a trade war with the U.S.

READ MORE: Scott Thompson: Doug Ford’s ‘Buck-a-Beer’ doesn’t really lower the price

Speaking at a brewery in Picton, Ont., last week, Premier Doug Ford said the program, which was one of his promises during the spring election campaign, will not cost taxpayers anything.

“Nobody is being forced to lower their prices and there will be no subsidies or tax handouts,” Ford said, calling the move a “win-win.”

VIDEO: Doug Ford announces ‘buck a beer challenge’ for Ontario brewers

The Tories have said a return to buck a beer would see more competition in the beer market without affecting the province’s revenues from beer and wine taxes, which government documents show brought in roughly $589 million in 2016-2017.

READ MORE: Many Ontario craft brewers pan Doug Ford government’s ‘buck-a-beer’ plan as unaffordable

News of buck a beer’s return was met with concern from safety groups and criticism from the opposition parties.

“Lowering the price of alcohol carries implications and risks for public safety,” MADD Canada said in a statement.

“Lower alcohol prices can lead to increased consumption, particularly among those with alcohol problems, and among young people, and that increased consumption can, in turn, lead to increased alcohol-related problems, including impaired driving.”

Ontario’s New Democrats said Ford’s efforts to reduce beer prices show his priorities are “completely mixed up,” and suggested the plan effectively gives subsidies to beer companies.

VIDEO: The Napanee Beer Company owner says buck a beer not possible for craft brewers

— With a file from Andrew Russell and The Canadian Press

© 2018 Global News, a division of Corus Entertainment Inc.

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