Alberta government corks added-value levy on wine, returns to standard flat tax

Bottles of British Columbia wine are displayed at a liquor store in Cremona, Alta., on Feb. 7, 2018. THE CANADIAN PRESS/Jeff McIntosh

Those in the wine and hospitality industries are applauding a move from the Alberta government to scrap a wine tax that they say reduced transparency and created business uncertainty.

Alberta had introduced an ad valorem markup that taxed wine based on the value of a bottle in its budget last year.

In its new budget tabled last week, the government walked back on the tax after industry backlash.

Starting April 1, the government will instead re-introduce a flat tax and increase the standard volume-based markup for wine products by 58 cents per litre.

Phoebe Fung, who owns three Vin Room restaurant locations in Calgary, said she had to absorb $60,000 a year in additional costs because of the ad valorem tax system.

“With the economic climate … and we’re in an affordability crisis, we thought and felt that we could not add any more price increases to our customers,” Fung said in an interview Thursday.

“So it was a necessity for survival for us to absorb the tax and not pass it on to the customer.”

She said the tax also caused the demand for Canadian wine to go down, because the ad valorem tax kicked in on wine that cost more than $11.25 a bottle.

“I can’t remember the last time I saw a Canadian bottle that was $11.25 wholesale even,” Fung said.

She said although the new flat tax still includes an increase, it’s a system that is straightforward.

“We understand the government needs to raise money, but this way is a much simpler way of doing it and it makes it fair across all bottles,” Fung said. “And it makes it fair across Canadian products, especially.”

Earlier this year, Wine Growers British Columbia called the markup a “blatant tax grab” at a time when boosting interprovincial trade in the face of U.S. tariff threats was a major priority.

Jeff Guignard, the group’s president and CEO, said Thursday that some B.C. wine producers were starting to drop out of the Alberta market.

“At the end of the day, what was happening was we were experiencing serious declines of direct-to-consumer wine sales from British Columbia to customers in Alberta — people were cancelling wine club shipments,” Guignard said.

“Customers were getting frustrated that they were suddenly seeing the case of wine that they’d ordered last year was one price, and then this year it was $50, $60, $70 more entirely because of the Alberta wine tax.”

He said B.C. wine producers now feel positive about Alberta reverting back to a flat-tax system.

“Alberta has always had a flat tax system. It’s very logical, it gives you envy of producers across the country,” he said. “The good news is they switched back.”

However, he said the tax only targets wine and he would like to see it distributed across beer and spirits.

Service Alberta Minister Dale Nally said the ad valorem markup only applied to about 16 per cent of wines and, even with it in place Alberta was still the most affordable province for wine.

“Alberta has the most open, competitive and tax-friendly liquor market in Canada, and we listen when industry brings forward ideas that can make it even better,” Nally said in a statement.

“Moving to a simpler system helps supports small businesses and ensures we continue to have a strong and viable hospitality and liquor industry.”

This report by The Canadian Press was first published March 5, 2026.

Daniela Germano and Lisa Johnson, The Canadian Press