Simcoe County businesses brace as federal alcohol tax goes into effect

Local businesses deal with increased alcohol tax Although the tax has now been capped at two percent instead of its initial 6.3 some say it is still not enough.

Local businesses are bracing for the Federal Government's increase in alcohol tax.

"We're not happy that there's an increase in the tax because even in downtown Barrie, we've had the pandemic we've had construction downtown, so we've gone through a litany of upheavals," said Colin Johnson, Manager of Donaleigh's Irish Public House.

Although the tax has now been capped at two percent instead of its initial 6.3 percent, some say that's still not enough.

"I think any increase in this time of day is punishment," said Walter Vaz, Heritage Estates Winery and Cidery Owner. "Certainly, we believe that any increase is going to affect us in a negative way in both our winery property and the hospitality."

Vaz said small businesses and the hospitality industry suffered the most from the pandemic, with many still trying to recover.

"We were one of the first to be locked down, we were one of the last to open up. I took on huge debts just to survive and now we're faced in the marketplace where the playing field is being artificially increased," he said.

However, that's just one increase businesses will deal with this year. The provincial government will raise the minimum wage from $15.50 an hour to $16.55 in the fall, a 6.8 percent increase tied to inflation.

"We recently had to deal with a larger jump than that in the server and bartender wage, which just increases the bottom line in the cost of doing business, any further increase in the minimum wage, it's going to hurt us," said Johnson.

Both Donaleigh's and Heritage Estate Winery say they don't plan to raise their prices right now and will find other ways to supplement the increases.

However, if costs continue to rise, they may be left with no other option.

Ontario's minimum wage is set to rise on Oct. 1.