Federal beer tax will sting local brewers, consumers

The federal government’s planned beer tax increase will take an even bigger sip out of the profits of Canadian brewers — and that means beer drinkers will likely be paying more for their suds this spring.

'Nova Scotians are already paying their share and then some,' says Garrison Brewing president

The federal government is planning to increase tax on beer each year, beginning this April. (Paul Palmeter/CBC)

The federal government's planned beer tax increases will take an even bigger sip out of the profits of Canadian brewers — and that means beer drinkers will likely be paying more for their suds this spring.

"As brewers, we certainly pay our fair share in tax and fees," said Brian Titus, president and general manager of Garrison Brewing. "In Nova Scotia, it's about 52 per cent of our price. The average in Canada is 47 per cent, so at 52 per cent, I kind of feel like Nova Scotians are already paying their share and then some."

The government plans to increase the tax on local and imported beer by about two per cent on April 1. The increase will take place every year in line with the cost of inflation.

Brian Titus, the president and general manager of Garrison Brewing, is encouraging customers to sign the Axe the Tax petition. (Paul Palmeter/CBC)

While the increase in the price of beer might only be about a nickel per 24-bottle case, brewers are saying enough is enough.

"We know that the prices are going up every single year and it's being driven not by natural forces like rising expenses, but because the government has built in this escalator," said Titus. "We don't think that's the best way to approach it."

National campaign

Garrison Brewing is one of many Canadian brewing companies who are encouraging beer drinkers to stand up and push back against the beer tax.

Beer Canada has launched a national campaign asking the Trudeau government to kill the tax. The Axe The Beer Tax petition is asking the public to get engaged and email Finance Minister Bill Morneau and local MPs.

"Beer drinkers are going to be faced with higher prices because of higher taxes. That's not favourable for sales," said Luke Harford, Beer Canada's president. "Brewers are going to be left with less money to invest in their plants, their people and their communities — and that's not a good thing either."

Beer Canada represents 50 brewers who make more than 90 per cent of domestic beer consumed in the country. The association says future tax increases would further hurt an industry facing challenging times, as beer consumption is declining in Canada.

"We all have a voice," said Titus. "By letting people in power know and by talking to your MP and signing on to the Axe the Tax petition, maybe there will be some adjustment."

Last increase 30 years ago

Finance Minister spokesperson Chloe Luciani-Girouard said in an email that the annual adjustment "will provide alcohol producers with greater certainty in the future and is in line with actions taken by many provinces."

"It's worth remembering that the last effective increase to the federal excise tax was over 30 years ago," Luciani-Girouard said, adding that small Canadian brewers are charged decreased rates on the first 7.5 million litres of beer.

The Conference Board of Canada published a report this week showing beer sales in Canada generate $5.7 billion in annual tax revenues.

Those numbers are expected to rise dramatically with the annual increase to the beer tax.

With files from The Canadian Press