Taxes on beer set to climb by close to 5% in Canada

An advocacy group representing Canadian brewers is asking the federal government to avoid hiking taxes on beer in 2024.

Today (Nov. 1), Beer Canada, a group representing brewers of all sizes across the country, said that without remedial action from Parliament, federal beer excise duties will climb 4.7 per cent on April 1, 2024. 

Beer Canada says that the increase, if passed, will be the biggest in 40 years. 

According to the Canadian government, excise duties are charged on spirits, wine, beer, and tobacco products. The government says that when alcohol and tobacco products are manufactured in Canada, duty is payable on the goods at the point of packaging rather than at the point of sale. 

When the goods imported into Canada, duty is generally payable by the importer when the goods are imported.

Beer Canada is calling on Deputy Prime Minister and Finance Minister Chrystia Freeland to include federal beer excise duty relief in the upcoming Fall Economic Statement.

“We appreciate the critical importance Minister Freeland and the government places on affordability, stabilizing prices and supporting hard-working middle-class Canadians,” said CJ Hélie, president of Beer Canada, in a statement. 

“Freezing or capping beer tax hikes in this era of sticky high inflation is a practical, sensible policy lever that should be included in the upcoming Fall Economic Statement.” 

Beer Canada says last year’s federal budget replaced the previously scheduled 6.3 per cent inflation-tied federal beer tax increase with a cap of 2 per cent for the current year with the expectation that inflation would cool.

In a statement, Hélie said that with inflation still high, a hike of 4.7 per cent will be “damaging.” 

“We had tremendous support from Members of Parliament from all parties last year to ensure we avoided a catastrophic 6.3 per cent tax hike, but unfortunately, persistent higher than expected inflation means a damaging 4.7 per cent beer tax increase next year unless Parliament takes appropriate action again,” said Hélie.  

In a news release, Beer Canada said its call for action from the government is supported by unionized workers and those in the barley, hospitality and tourism sectors. It also said a freeze on federal beer taxes will help the Bank of Canada reign in CPI inflation. 

According to Beer Canada, the production, distribution and sale of beer supports 149,000 jobs and generates $13.6 billion in GDP and $5.7 billion in tax revenue.