Having to pay more for your favourite wine, beer or spirit on April 1st is not an April Fools’ joke.
Unless the annual “escalator tax” on beer, wine and spirits is repealed the prices of alcohol will grow in Canada on April 1. The tax is annual, meaning that prices increase in April of each year, making it the third increase in three years. Moreover, according to Spirits Canada, federal excise duty revenues on spirits has increased by a whopping 17.8% last year.
The “escalator tax” comes under the Excise Act, 2001, and allows the Government of Canada to raise the rates of excise duty on spirits, wine and beer. According to the government’s website, alcohol prices rates are “adjusted based on changes to the Consumer Price Index (CPI).”
Canadian alcohol producers have already expressed their concern regarding the task and are asking the federal Finance Minister Bill Morneau to repeal it, saying that it results in increase of consumer prices and makes domestic producers less competitive. Unless the parliament votes on ending the tax before April 1, taxes on beer, wine and spirits will automatically increase.
“Canada already imposes amongst the very highest taxes on alcohol in the world, and, in the case of spirits, 80% of what you pay are taxes. Today’s escalator tax is having the same negative effect it had when Canada last experimented with it in the 1980s; sky high prices, a freeze on investment, closed distilleries, lost jobs and Canada losing ground versus our international competitors.”Jan Westcott, President and CEO of Spirits Canada
Many Canadians expressed their discontent in face of rising alcohol prices, and voiced their support for repealing the escalator tax through participation in the spirits’ awareness campaigns by using the hashtags #NotOnMyTab and brewers’ #AxeTheBeerTax.
In addition, an online petition is also being circulated by members of the brewing industry, urging Canadians to Axe the Escalating Beer Tax. The petition claims that “47% of the price of beer is government tax,” and that “Canada has one of the highest beer taxes in the world.”
All cereal grains, including barley, rye, corn and wheat are sourced by Canadian spirits manufacturers from local Canadian farmers, supporting the local economy and farming practices. Moreover, Spirits Canada is the only national trade association which represents the interests of Canadian spirits manufacturers, exporters, marketers and consumers.