News / Canada

The tax on beer is going up this spring — and brewers are not happy about it

The federal government is set to increase the tax on local and imported beer by about 2 per cent starting this April. The increase will roll over every year in line with inflation.

Beer products on display at a Toronto beer store. The tax on beer is set to go up this spring.

Chris Young / The Canadian Press

Beer products on display at a Toronto beer store. The tax on beer is set to go up this spring.

Brewers want you to know the cold, hard truth about the price of your cold ones.

The federal government is set to increase the tax on local and imported beer by about 2 per cent starting this April. The increase will roll over every year in line with inflation — which has the brewing community up in arms.

"Obviously this is troubling because it's going to automatically increase prices for our customers, who are already paying a 47 per cent tax rate on average across the country," said Luke Harford, president of Beer Canada, the trade association advocating for the brewers.

(In the U.S., the excise tax on beer is at 40 per cent, according to The Beer Institute, the organization that represents American brewers.)

Beer Canada has launched a national campaign to get the government to scrap this tax increase. Axe The Beer Tax asks the public to sign a petition and write to their MPs voicing concerns.

"Our point is that, if they want to increase tax they should talk about it every year as opposed to hiding it in the legislation where it automatically goes up every year," Harford added.

The group believes the hike will hurt an industry that has already seen a decline in recent years. A report published Monday by the Conference Board of Canada shows per capita consumption of beer declined by 10 per cent over the past decade. The high price is among the contributing factors, according to the report.

The report also shows beer remains a popular beverage among Canadians, comprising as much as 40 per cent of all alcohol sales. Beer also generates some $5.7 billion in annual tax revenues, the report says.

According to a Ministry of Finance spokesperson, "The annual inflationary adjustment will provide alcohol producers with greater certainty in the future and is in line with actions taken by many provinces." The ministry added that the 2 per cent increase amounts to a nickel on the cost of a case of beer and that "the last effective increase ... was over 30 years ago."

Harford said the new increase could be especially harmful to local brewers whose industry is the main driver of the market.

"Right now, 85 per cent of beer sold in Canada is made in Canada. That's a large beer-making footprint, and we want to hold on to that," he said. "Driving the price up because of these tax increases is going to have a knock-on effect on our ability to make and sell good beer."

Beer tax comparison:

• U.S.: 40 per cent

• Finland: 33 per cent

• U.K.: 24 per cent

• France: 8 per cent

• Belgium: 4 per cent

Source: Beer Institute, European Commission

More on Metronews.ca