News / Edmonton

Panel says Alberta must change 'discriminatory' beer rebate

The panel says the rebate for Alberta-based small breweries violates Canada’s Agreement on Internal Trade

Edmonton-based Situation Brewing Company founder Wayne Sheridan said if the province has to scrap its rebate policy for small breweries, it could affect the sustainability of his business.

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Edmonton-based Situation Brewing Company founder Wayne Sheridan said if the province has to scrap its rebate policy for small breweries, it could affect the sustainability of his business.

An expert panel has determined Alberta’s rebate program for small Alberta brewers is “discriminatory” and violates Canada’s Agreement on Internal Trade (AIT).

Now they're asking the province to change its policies to comply with the agreement within six months. The panel is assembled under the AIT to adjudicate disputes, which in this case was between Calgary-based Artisan Ales and the Government of Alberta.

After introducing a new tax structure for small breweries in 2015, the Alberta government tweaked their policy in 2016 to have a consistent tax rate across the board for all small brewers. But they also introduced a rebate program for Alberta-based companies, which out-of-province breweries objected to.

A spokesperson from Finance Minister Joe Ceci’s office told Metro the government is reviewing the decision and will have more to say in the coming days.

Edmonton-based Situation Brewing Company founder Wayne Sheridan said the rebate program has been a boon to his business and helps "level the field" for small brewers because they pay much higher costs for labour and equipment when compared to large companies.

“It will put us back at a slight disadvantage (if changed) … it kind of throws us into the world market, whether we’re exporting or not, we’re getting no protection,” he said.

“It’ll call into question our sustainability,” he added. 

Derek James From, a lawyer for the Canadian Constitution Foundation, said while it’s perfectly fair to support local breweries, the government’s approach was unconstitutional.

"Alberta’s going to have to come up with a new way to accomplish the same goal," From said. "They can support local brewers … what they can’t do is punish people like Artisan Ales who are importing into the province."

Sheridan wouldn’t characterize the ruling as good or bad, but said he does ultimately believe it will make small Alberta brewers less competitive if the rebate is eliminated.

“Do you want cheapest beer from the widest number of (providers)? Or do you want a burgeoning local craft beer scene? Because you can’t really have both.”

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