Brewery wants excise tax canned

The increase to an excise tax isn’t looking pretty to brewery owners, even after a few drinks.

The federal budget, tabled on Tuesday, revealed that the excise tax on alcoholic products will go up by 2 per cent, rather than the planned 6.3 per cent, but the smaller increase is still not sitting well with brewers.

Mark Heise, president of Rebellion Brewing Company in Regina, said the tax increase will hit smaller breweries harder than large, multinational breweries. He expressed his disappointment that it’s still going up by 2 per cent for all breweries across Canada.

“There’s all this talk these days about profiteering for these multinational companies. That’s what’s happening at the brewery level now,” he said.

He said the tax increase is yet another issue small breweries have to deal with, on top of rising inflation and the effects of the pandemic.

“We have to work twice as hard to make a nickel instead of making a dime,” he said.

“I’m extremely concerned for all of the breweries, because I know how hard it is for us to make a go of it.”

Currently, Heise said, his brewery pays 58 cents per 100 liters, but that price will jump to 61 cents on Saturday.

For almost three years, Heise said he has worked closely with the federal government to find a solution that will benefit small, independently owned breweries in the country.

He said the current excise on beer is very punitive, especially for small producers, and rates are exceptionally high compared to other countries.

“We’ve been asking to reform the rates in general, which would see smaller breweries pay less,” he explained.

Heise said he commissioned an economic study, at the request of the federal government, to show how it could be a revenue-neutral proposal.

“The third party proved that it could be revenue neutral and stimulate the economy by creating more jobs and more investment in these local communities,” he said.

“There was an opportunity for the federal government to be bold and truly help out Canadians and Canadian small business, and it’s disappointing that they chose not to this time around.”

There’s also a looming concern that consumers will reach a breaking point and not purchase products, said the business owner.

Heise said the brewery receives an incredible amount of support from the community, but there needs to be support from all levels of government to help ensure small businesses can thrive during times of high inflation.

Heise said his company will eat the tax increase and not pass it on to customers.

“Customers can only take so much,” he said.

CJ Hélie, president of Beer Canada, said other breweries are also choosing to absorb the higher tax.

He said Canadians probably won’t be seeing the price of beer rise immediately on liquor store shelves .

“It takes a little bit of time for any cost increase to pass through to the consumer,” he explained.

Hélie predicted that the price of beer will increase throughout this year, and that prices will reflect the higher tax on the shelves about six weeks after the increase is implemented on Saturday.