Beer industry calls for tax freeze

A coalition of brewers, unions, consumers, farmers, retailers, and hospitality industry members are calling on Parliament to implement a beer tax freeze or at the very minimum, continue the two per cent cap that was introduced in 2023.

If no action is taken, federal beer taxes will rise by 4.7 per cent in April, which would be the largest beer tax increase in 40 years due to inflation and a rigid indexing formula used to adjust rates.

According to a statement by Beer Canada, the inclusion of a cap in 2023 benefitted breweries of all sizes, workers, and supply chain partners. “It also provided brewing companies with greater flexibility to respond to rising input costs and retail prices, and to invest in modern equipment, particularly for the phase-out of single-use plastic packaging like flexible plastic ring carriers,” it added.

A steep tax hike will negatively impact beer sales, which is down 6.5 per cent since 2019. Despite the decline in beer sales, 88 per cent of all beer purchased in Canada was made local brewers.

At 46 per cent of the price, Canada has one of the highest beer taxes among all G7 countries. An additional increase of nearly five per cent will deeply hurt the industry, said the statement.