‘You’ve gone too far with this:’ Beer Canada slams federal tax hike hitting 18% total this year

Richard Alexander, president of Beer Canada, joins BNN Bloomberg to discuss the federal alcohol tax increase.

The automatic tax increase on beer has got to stop, as the industry struggles to survive in the current economy, says the president of Beer Canada, the national advocate for the brewing industry.

Richard Alexander’s comments come after the federal alcohol tax increased by two per cent on Wednesday as part of the alcohol escalator tax program launched in 2017, which automatically increases excise taxes on beer, wine, and spirits every year.

Since then, he says, taxes on beer have increased by 18 per cent, harming restaurants, the brewing industry, and farmers.

“About 90 per cent of beer that’s sold in Canada is grain to glass. It’s produced here in Canada,” says Alexander.

“We are a Canadian industry, and at a time when we’re under threat by the U.S. and by Donald Trump in particular, it doesn’t make sense for the federal government to be increasing taxes on a true Canadian product that Canadians love.”

Alexander says beer sales have dropped roughly 18 per cent in that same time period.

“We believe that that’s not in the best interest of Canadians right now. We still have an affordability crisis. The industry is struggling,” he says.

• Here’s a list of the U.S. tariffs still hammering Canadian industries

Let’s have a debate in the House of Commons

The federal excise tax on alcohol is indexed to inflation, which means it increases automatically every year without a vote in Parliament.

Alexander says the industry is not opposed to the taxes as a whole, but wants a fair discussion in the House of Commons so the government can consider the industry’s economic concerns.

He says breweries, which use aluminum extensively for packaging beer, are already seeing costs increase because of U.S. tariffs on aluminum.

“It’s hard for Canadians to accept that a $14 million increase in taxes on beer in one year is helping them with affordability, or helping our industry survive the Trump tariffs,” says Alexander.

The federal government introduced a two per cent cap on the alcohol tax increase three years ago, but that doesn’t help, says Alexander.

• Ottawa extending 2% alcohol tax hike cap for another 2 years

“Inflation is about two per cent so even without the cap this year, it would have gone up two per cent,” he says.

Last month, he said “all the unions in the brewing industry got together, published an open letter to the Prime Minister, saying, ‘Look, jobs are at risk. You’ve gone too far with this.’”

Canada’s beer industry supports 149,000 jobs, contributes $13.6 billion to the GDP, and generates $5.7 billion in taxes, according to Beer Canada.

Alexander says that despite years of advocacy from unions, businesses, farmers, and MPs to stop the tax, the Prime Minister’s Office remains unwilling to act.