Smaller bump in alcohol excise tax draws muted applause

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This article was published 30/03/2023 (1132 days ago), so information in it may no longer be current.

Local breweries and restaurants are breathing a sigh of relief after the federal government poured out any plans to implement the largest alcohol excise tax jump in more than 40 years.

The federal beverage alcohol duty was set to increase on beer, wine and spirits by 6.3 per cent April 1.

Tuesday’s federal budget announcement decided to cap the hike to two per cent.

“We can get away with two per cent for now,” Torque Brewing operations manager Matthew Wolff said Thursday. “It’s a little relaxing, because we are in the midst of doing our budget work, but any increase is never welcome.”

Beer Canada, a trade association representing Canadian brewers of all sizes, said earlier this week brewers, hospitality and tourism businesses are still trying to recover from COVID-19 pandemic losses, with all beer sales outside of homes down by 15 to 20 per cent from pre-pandemic levels.

“A 6.3 per cent federal beer tax increase this year would have been devastating to brewers, brewery workers, the hospitality and tourism sector, and hard-working Canadian consumers,” Beer Canada president CJ Hélie said in a statement.

Torque general manager Camila Bellon said it’s tougher for microbreweries to handle increases than for large national companies.

“How many breweries do we have in Winnipeg?” Bellon said. “We all work on really tight margins.

“Already, the (Manitoba) minimum wage is also going up, as well as the price of ingredients — some things went up 20 per cent this year… Two per cent doesn’t seem a lot, but for some businesses it is the difference between a business running or not.”

Shaun Jeffrey, chief executive officer of the Manitoba Restaurant & Foodservices Association, said its members are breathing a sigh of relief.

“I think the general synopsis is that our industry’s happy that the recognition is there by the federal government that we’re still struggling,” Jeffrey said.

“They made the necessary changes to assist in our recovery, and this was due to heavy advocacy by associations, both provincially and federally.”

Jennifer Henshaw, Restaurants Canada vice-president, Prairies and North, said: “We commend the federal government for listening to (advocacy association) Restaurants Canada and all the other stakeholders… (An increase of) 6.3 per cent would have placed a crippling financial burden on restaurants. They would have needed on average an extra $30,000… that’s a heavy hit.”

kevin.rollason@freepress.mb.ca