Alberta's efforts to help out craft beer brewers came under fire at a trade panel hearing Thursday.
Last year, the Alberta government imposed a tax of $1.25 per litre on all beer sold in the province. However, small brewers in Alberta are eligible to receive monthly grants to offset the tax.
Out-of-province brewers say the program is discriminatory.
Artisan Ales of Calgary, which imports beer from places like Quebec and Belgium, argued the tax violates Canada's Constitution and the Agreement on Internal Trade by erecting barriers to out-of-province competition.
Artisan has said the markup led to a 40-per-cent decline in its sales.
But the province argued that under the Agreement on Internal Trade, incentives for economic development are allowed, and the craft beer program qualifies as such.
Government lawyer Shawna Vogel also argued the trade panel doesn't have jurisdiction to hear the issue at all, saying the complainant didn't follow the proper disputes-settlement process.
The panel is expected to make its decision public within 60 days.