EN FR

Let's Not Hop to Increase Beer Taxes

Author: Paige MacPherson 2015/07/03

This op-ed was published in the Calgary Herald on Friday, July 3, 2015.


Welcome to Alberta, home of great beer selection and competitive beer taxes (for now). However, calls for higher taxes and potentially less access to our favourite suds are a real buzz kill.

Currently, the provincial graduated beer tax structure taxes beer from both in-and out-of-province brewers at the same rates. Tax differences are dependent only on a beer’s alcohol content (high alcohol beers are taxed more) and brewery size. Small brewers (like Alley Kat) are taxed less than medium or large breweries (like Sleeman), similar to a small business tax rate. That gap widened further when the Prentice government increased the tax on standard (large production) beer to $1.20 per litre in March. Sorry, Keith’s drinkers.

Importantly, brewery location does not impact brewery taxation.

The Alberta Small Brewers Association (ASBA) recently held their annual general meeting. Though asked, they’ve yet to make public their current position on this. They’ve expressed excitement about working with the NDP government to address tax and red tape, as the Alberta Liquor and Gaming Commission (ALGC) is continuing a review of its laws.

However, in the past, the majority of the founding members of the ASBA were unhappy with the tax equality between in-and out-of-province brewers. In 2013, 12 of 16 ASBA’s members got together and asked the provincial government to impose higher taxes on out-of-province small and medium-sized brewers.

They argued that other provinces tax Alberta brews at higher rates than the locals, so we should do the same.

We wouldn’t impose a sales tax just because New Brunswick has one. That would hurt Albertan consumers. So why would we increase our beer taxes and potentially limit our beer selection because other provinces do?

As its members prepare to once again lobby the government, it’s time the ASBA clarified their position.

Previously, ASBA members argued taxing small brewers from outside Alberta at higher rates would signify ‘supporting the local beer industry.’ But pushing someone else down is no way to pull oneself up.

To truly support the industry, the government should lower beer taxes across the board, making beer easier to sell and buy.

Further, the government could change the way they apply taxes to all small and medium brewers. All growing breweries are pinched by a retroactive taxation scheme that makes expanding a brewery unnecessarily expensive.

As an individual in Alberta, your income is tax-free up to about $18,000. Any income above that, up to $125,000, is taxed at 10%.

Brewers get a tougher deal. Beer is taxed at 40 cents per litre up to 20,000 hectolitres, but the second they cross that arbitrary 20,000 threshold, every drop they’ve brewed is taxed at 51 cents. At a 22 per cent increase, modest growth doesn’t seem all that lucrative.

Alberta has unmatched beer selection, access and low taxes on all our favourite beers. It’s a great place for brewers across Canada to sell beer, because they aren’t slapped with out-of-province taxes. This means more selection for Albertans.

The ASBA members’ position from 2013 called for changing that.

The ASBA has the opportunity to shift away from their members’ bitter protectionist pushes, and toward increased accessibility for Albertan beer-drinkers. But they first need to come clean on their current position.

Some of us enjoy a hoppy Big Rock Rig Pig Ale. Some prefer a malty Propeller Porter. Some like a refreshing Steamwhistle Pilsner.

It would be unfair to tax one of these Canadian craft brews more than the others. Albertans shouldn’t be penalized for cracking the cold one they like best.

Paige MacPherson is Alberta Director of the Canadian Taxpayers Federation. 


A Note for our Readers:

Is Canada Off Track?

Canada has problems. You see them at gas station. You see them at the grocery store. You see them on your taxes.

Is anyone listening to you to find out where you think Canada’s off track and what you think we could do to make things better?

You can tell us what you think by filling out the survey

Join now to get the Taxpayer newsletter

Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

Join now to get the Taxpayer newsletter

Hey, it’s Franco.

Did you know that you can get the inside scoop right from my notebook each week? I’ll share hilarious and infuriating stories the media usually misses with you every week so you can hold politicians accountable.

You can sign up for the Taxpayer Update Newsletter now

Looks good!
Please enter a valid email address

We take data security and privacy seriously. Your information will be kept safe.

<