Canada: Beer Canada disappointed by government’s Fall Economic Statement

Brewery trade organization Beer Canada has expressed its concern that the Fall Economic Statement 2022, released on November 3 by the Government of Canada, “fails to address the strong consensus recommendation from brewers, hospitality, tourism, and labour unions to freeze beer taxes in recognition of today’s challenges and the current unique business environment.”

“It is extremely disappointing and frustrating that [the] update has no measure to address next year’s looming federal tax increase on beer”, said CJ Hélie, President of Beer Canada, in a statement. “A further inflation-indexed tax hike on beer next year will impose unnecessary and willful harm on Canadian consumers, the hospitality sector and Canadian brewers of all sizes.”

Federal alcohol excise duties automatically increase each year on April 1st based on a Consumer Price Index (CPI) inflation-indexing formula determined the previous September. In 2023, these duties are set to increase by 6.3%, the largest jump since the formula was introduced in Budget 2017.

“Tying beer taxes directly to CPI inflation creates a vicious upward spiral,” added Hélie. “A 6.3% tax increase that is further magnified by provincial beer and sales taxes will place upward pressure on consumer beer prices already rising due to increased production costs, and these higher beer prices push inflation even higher.”

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