Tuesday’s federal budget announcement, “A Made-In-Canada Plan” lowered the proposed beverage alcohol duty from 6.3 per cent to two per cent, to help fight tax hikes and inflationary costs.
But not everyone is convinced the move will benefit the industry overall, as much as it will large companies.
“We are grateful that Minister Freeland responded to today’s unique business circumstances, a struggling hospitality sector and a fragile consumer and reduced this year’s increase in federal excise duties from 6.3 per cent to 2 per cent,” said CJ Hélie, president of Beer Canada.
According to Beer Canada, Canada has the highest beer tax rates amongst G7 countries and beer sales are still 15 to 20 per cent below pre-pandemic levels.
The previous tax hike to 6.3 per cent, originally scheduled for April 1, would have been the largest beer tax increase for Canadians in 40 years.
“Faced with already very high tax rates, increased operating costs and depressed beer sales volumes, a 6.3 per cent federal beer tax increase this year would have been devastating to brewers, brewery workers, the hospitality and tourism sector and hard-working Canadian consumers and we are appreciative that Minister Freeland took action to provide the sector some breathing room to recover,” said Hélie.
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However, some Saskatchewan breweries think the government’s promise falls short of what they were actually looking for.
“It’s just a huge tax break for multi-national corporations that really don’t have jobs here and don’t invest here,” said Mark Heiser, owner of Rebellion Brewery.
He is also a board member for Canadian Craft Breweries and said they have been advocating for excise reform for years.
“We have been asking the federal government to look at the tiers and the amounts paid instead of just looking at that inflationary thing,” said Heiser. “It would allow better rates and better benefits to the smaller breweries in Canada, the independently owned breweries in Canada.”
Given inflation, Heiser still said that the tax cut is great, but it won’t impact their small business significantly.
“We have been lobbying for the smallest, smallest breweries to pay almost nothing,” said Heiser. “In the scheme of things, it’s not a large tax amount for the government, but it is really impactful for these really, really small breweries, especially where cash flow is so important right now.
“We know that they would take those tax savings and invest in jobs and invest in their equipment and invest in their community, as opposed to the big companies that got the tax break today. They are just going to line their pockets.”
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