A hike in a “beer tax” that could make brews more expensive for Canadians is again being considered by Ottawa after a delay earlier in the year.
Federal beer excise duties are set to increase by 4.7 per cent in April 2024, an increase that could make beer up to 20 cents more expensive for a case of 24, according to CJ Hélie, president of Beer Canada.
Since 2017, the tax has increased in line with inflation. This year, it was set to go up by 6.4 per cent but was then capped at a two per cent increase due to lobbying from the industry and constituents.
Now another large increase is scheduled for 2024, albeit smaller than the one avoided this year.
Hélie hopes that can be avoided again and the two per cent increase cap can remain. Beer Canada is calling on Finance Minister Chrystia Freeland to announce such a cap in her next fall economic statement, which is expected in late November or early December.
“Why not announce it early … so that we can all spend our time on more productive things than talking about this for the next four or five months?” Hélie told Global News.
The Liberals scrapped the 6.4 per cent increase in their budget, which Hélie said came too late and caused anxiety in the industry and investments to be delayed.
Hélie said the current proposed tax increase of 4.7 per cent would cause about $33 million in additional excise duties for beer consumers. However, since the tax is implemented at the point of production, the 4.7 per cent gets inflated by about 30 per cent by the time it gets to consumers, so a 15-cent increase for a case of beer becomes a 20-cent increase, he said.
The tax was one of the first in Canada’s history, according to Hélie, and was previously approved in Parliament every time it was increased until 2017, when then-finance minister Bill Morneau decided to make the increase automatically calculated based on inflation. However, that was before the rapid increase in inflation, which remains above target and which has caused the beer tax to balloon as well.
Given the cost-of-living struggles facing many Canadians, Hélie said many voiced their disapproval. Still, he said it was an “uphill battle” to get the increase axed that included hiring actors Rick Moranis and Dave Thomas to reprise their roles of Bob and Doug McKenzie of Second City Television fame to advocate for it to not go through.
“Our fingers are crossed that we won’t have to again spend lots of our time and effort … working through this again, given that the circumstances are so similar,” Hélie said. “I don’t know why you would come to a different decision.”
