Canadians have been made aware, through recent campaigns on social media and conventional advertising produced by Beer Canada*, that all Canadian brewers are supportive of another federal excise tax increase, albeit a 2% increase rather than a speculated 4.7% “escalator” increase government will implement on April 1, 2024. This plan does not address the issues of Canada’s independent craft brewing industry and does not address the modernization of the excise tax model, which has not been changed in almost two decades.
As the true representative and collective voice of the majority of Canadian independent craft brewers, the Canadian Craft Brewers Association (CCBA) cannot support any increase to federal excise. Over the last two years of economic impact studies with provincial brewers associations and the Canadian Coalition of Independent Craft Brewers (CCICB), we have proposed a more robust and impactful reduction of federal excise tax which not only helps secure the future of our industry it shows all levels of government that tax reform is an immediate necessity for the future of craft beer in Canada.
The CCBA and CCICB have proposed a 50% reduction in federal excise tax for all Canadian brewers up to 500,000 HL production. Simply reducing the escalator does nothing for the independent craft brewer – it mostly helps big beer, and in a big way.
What Would You Rather Pay?
The following tables illustrates what the annual excise payments would be by reducing rates by 50% versus increasing them by 2% for breweries operating from 2,000 HL to 10,000 HL. Beer Canada supports a tax increase. We do not.
Our aggressive proposal has shown the federal government that even with a 50% reduction in federal excise tax up to 500,000 HL, the amount of economic stimulus and additional tax revenue created by our industry will offset most of the tax revenue shortfall.
More Reasons to Support our Proposal and Turn Down Any Tax Increase
1. Our industry needs it.
Approximately 10-12% of craft breweries have closed in the last year due to escalating costs, downturns in hospitality and consumer spending moving to discounted big beer.
2. A recognition of tax reform in Ottawa means provincial governments should follow next.
While excise tax may not be the largest tax imposed on a small brewer, we need to translate this message from the top down. Let’s focus on excise and work on provincial reform.
3. Return on investment & job creation.
Depending on the size of brewery, tax savings can be invested to increase production, enhance tourism activity, hire more staff, and buy more local agriculture.
4. Cost increases cannot be passed on to our consumers.
Foreign-owned macro brewers have absorbed high input cost increases over the last two years to hold prices to consumers. We cannot.
5. US comparison.
Canadian craft brewers are taxed at over 4 times what a brewery would pay in the US. Modernization of the US excise system has proven successful.
6. Craft beer supports both rural & urban communities.
55% of all craft breweries are in rural communities where jobs are needed, and they also bring life, vitality, and people to urban cores.
7. Support craft beer tourism.
Our breweries and taprooms attract over $1 million in total craft beer tourism output, $500 million in total tourism GDP, $200 million in total tourism taxes, and support 6,300 in total tourism jobs.
The CCBA is your unified voice for Canada’s craft brewing industry.
As the national voice for Canadian craft breweries, the CCBA is seeking more meaningful cost savings for independent breweries beyond simply addressing the escalator tax. By proposing total reform, we are looking to give craft breweries the break they need to continue to make positive economic and social impacts in their local communities.
Any way you slice it, modernizing the excise tax structure and giving craft breweries a 50% tax cut is what is needed and a very different ask than just addressing the escalator. So, to Bob & Doug, I say take a hike, eh!
Executive Director, CCBA
*Beer Canada’s mission is to facilitate the commercial success of foreign-owned mainstream beer producers operating in Canada.