Canadian craft brewers won't have to shell out extra cash to sell their beer in Alberta — for now.

Steam Whistle Brewing has been granted a court injunction this week suspending the increased tax on craft beer produced in provinces outside Alberta, British Columbia and Saskatchewan.

The province announced the "New West Partnership" tax plan last October, adding a 260 per cent tax increase on small beer producers from elsewhere in Canada — a jump from $0.48 per litre to $1.25 per litre.

"This whole idea of aggressive tax to injure the businesses of craft brewers from within our own country but are entering Alberta to us makes no sense," said Greg Taylor, co-founder of Steam Whistle Brewing.

The Ontario-based brewer says it took on the legal challenge on behalf of other craft brewers excluded from the New West Partnership. Their lawyer argued the tax provided a barrier to interprovincial trade.

"It was specifically a tax to stop craft brewers from outside the province of Alberta from prospering within Alberta," said Taylor.

Greg Taylor

Greg Taylor is a co-founder of Toronto-based Steam Whistle Brewing. He says the tax placed on craft brewers from outside of Alberta makes no sense. (YouTube)

Finance Minister Joe Ceci has told CBC news the tax increase was brought in to help grow the brewery business in Alberta, create jobs and diversify the economy.  

"I think that's probably what the spirit of the province's move was, to try to level the playing field," said Neil Herbst from the Small Brewers Association of Alberta.

While Herbst hasn't seen a direct increase in sales of Alberta craft beer, he's seen more small breweries popping up. 

He says Alberta has an open-listing system where the province does not determine who can sell beer. Yet, Ontario and Quebec can decide which beers are sold in the province under a restricted listing system.

But Taylor says Alberta's new law is too harsh, and will consider taking Steam Whistle off Alberta shelves if the new tax is adopted permanently.

"It's tough growing a craft beer in Canada, there's a lot of barriers, but gosh, to face these punitive measures that are brought in by governments, it's very tough."  

There will be a hearing on the tax on July 21.