Canada’s beer industry launches fight against ‘runaway taxation’

Despite a decline in per capita consumption, beer remains Canada’s most popular alcoholic beverage and accounted for $13.6bn ($11bn USD) in economic activity in 2016.​​

However, Canada has one of the highest beer taxation rates in the world, with almost half (47%) of the cost of a bottle of beer being tax.

Beer Canada warns that on April 1, an automatic ‘escalator’ is due to kick in: ‘that will continue to drive the tax rate up, unchecked, with no end in sight’.​

The ‘Axe the beer tax’ campaign is calling on drinkers to sign their petition to axe the escalator.

‘Threat is real’​

Beer makes up 40% of Canada's total alcohol sales, making it the most popular alcoholic beverage in the country.

But Beer Canada says that a 10% decline in beer consumption over the last ten years means the tax ‘threat to Canada’s beer industry is real’.

Since 2012, provincial taxes on beer have increased 58% in Quebec, 18% in Ontario, 19% in Manitoba, 24% in Saskatchewan and 28% in Alberta.

Now, a 2% federal excise tax that came into effect in March 2017 will climb annually, with the automatic tax escalator coming into effect on April 1 this year.

"That means even higher prices for beer in Canada,"​ said Beer Canada chair George Croft. "Governments are punishing beer drinkers with these price hikes for no good reason and it's time brewers and consumers said enough is enough."​

Beer Canada represents 90% of the industry, with members coming from both large and small breweries. 

Economic contribution​

This week The Conference Board of Canada has released figures on the economic impact of the Canadian beer industry, in a study funded by Beer Canada.

Per capita consumption of beer in Canada has declined by 10% over the past ten years, thanks to demographic changes, increased competition from other alcoholic beverages such as wine, and competition from non-alcoholic drinks such as coffee and tea.

Economic factors such as higher input costs and increases in provincial beer taxes have also contributed to the decline.

The report estimates that the tax impact attributable to Canada's beer economy in 2016 exceeded $5.7bn [$5bn USD], with $1.9bn [$1.53bn USD] going to federal government, $3.5bn [$2.8bn USD] to provincial/territorial governments, and $378m [$305m USD] to various municipal governments.