National beer day puts spotlight on taxes
By Al Beeber - Lethbridge Herald on September 26, 2024.
LETHBRIDGE HERALDabeeber@lethbridgeherald.com It’s part of Canada’s cultural fabric, a beverage people can enjoy together after a long day at the office or a hockey game.It’s long been the beverage of choice for summer barbecues, family celebrations and just to relax after a day of yard work.
But high taxes are impacting the ability of Canadians to enjoy that cold jug of draught at a pub or a bottle of their favourite micro-brew at home.
Beer Canada is trying to bring to the attention of politicians – both federally and provincially – as well as the public the impact taxes are having on the brewing industry, hospitality industry and consumers.
So for the sixth straight year, it’s running Canadian Beer Day which in 2024 is Oct. 10.
CJ Helie of Beer Canada says Canada has the highest beer taxes of any nation in the G7. That tax amounts to 46 per cent of the retail price of beer, according to Beer Canada figures. In neighbouring United States, taxes amount to only 17 per cent of the retail price.
Luckily for Albertans, its markups – which are provincially regulated like those in all other provinces – are among the lowest in the country, says Helie, but that doesn’t take away the sting. And it doesn’t lower the bite at the cash register when Albertans are purchasing their brew of choice.
Alberta’s markup rate schedule for beer according to aglc.ca as of Dec. 21, 2022 was $1.25 per litre for brews less than or equal to 11.9 per cent alcohol by volume. For manufacturers who produce less than 400,000 hectolitres per year the markup for beers less than or equal to 11.9 per cent by volume ranged between 10 cents and 80 cents per litre.
A planned federal 4.7 per cent tax hike on alcohol for 2024 that was scheduled to be implemented on April 1 was instead capped at two per cent until 2026 shortly before that increase went into effect.
With Canadian beer prices considerably higher than brews purchased in the U.S. – as much as 40 per cent higher, according to Helie – the impact of shoppers heading south to buy beer is a concern because of the economic impact that has on the Canadian beer industry.
And a big part of that industry is draught, which is king of the beer market in pubs and restaurants and a driving factor in profitability, says Helie.
“Beer taxes have gotten ahead of the curve,” says Helie, noting the industry has no problem paying taxes to an extent.
“It’s time to look at freezing beer taxes,” says Helie.
All brewers from multi-national corporations to small outfits in towns across the country are impacted by beer taxes, says Helie.
“We’re in an affordability crisis right now,” says Helie of the impact inflation is having on Canadians’ disposable income. And the affordability of beer is an issue for residents of a country in which beer is arguably part of the national identity, a beverage whose appeal is universal.
“There needs to be a turnaround” or the country is going to see brewers and its partners close, says Helie.
“We’re in a very delicate position right now and we need breathing room for the sector,” he says.
And a large part of that sector consists of local brewers. In 2023, 88 per cent of all beer purchased and consumed in Canada was brewed in Canada which Beer Canada says makes the product “a true leader amongst Canada’s agri-food processing sector.”
The brewing industry contributes more than $13.6 billion to Canada’s gross domestic product every year and Canadian beer supports 149,000 jobs in a range of industries including hospitality, tourism, agriculture and transportation. Beer also generates $5.7 billion annually in taxes.
Presently, 1,320 breweries operate nation-wide providing direct employment to more than 23,000 people. In Alberta alone, there are roughly 140 licenced breweries operating. 3
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