Beer Canada is urging the Government of Canada to take immediate action to prevent the unintended consequences of a nearly 5% federal beer tax hike scheduled for April 1, 2024.
The delayed tabling of the 2024 Budget until April 16 leaves no opportunity for Parliament to review or intervene before the tax increase takes effect.
CJ Hélie, President of Beer Canada, highlighted the urgency of the situation, saying, “The inflexible automatic increase on beer taxes is set to proceed without giving Parliament a chance to weigh in. We believe the majority of MPs from all parties support either a freeze or a cap on beer taxes, and their views should be considered, even if the Budget is not ready until after April 1st.”
Last year’s Budget, presented on March 28, 2023, introduced a temporary cap on the excise tax increase, limiting it to 2%.
Beer Canada is advocating for a similar cap this year, consistent with the recommendation from the House of Commons Standing Committee on Finance (FINA). On February 15, 2024, FINA passed a unanimous motion to limit the excise tax increase to 2%, in line with the Bank of Canada’s target inflation rate.
Hélie urged Deputy Prime Minister and Minister of Finance Chrystia Freeland to instruct the Canada Revenue Agency to implement FINA’s recommendation as soon as possible. He stressed that failing to do so could harm Canadian consumers and businesses across the beer value chain, from farmers to brewers and the hospitality sector.
A broad coalition of consumers, brewers, bars, restaurants, organized labor, grain growers, and chambers of commerce is calling for Parliament to vote on any beer tax increases. They also want to end the practice of tying beer tax hikes to inflation spikes.
At nearly 50% of the typical retail price, Canada already has the highest beer taxes among G7 nations. Beer Canada warns that further increases will place additional strain on an industry already facing economic challenges and could negatively impact jobs, businesses, and consumers alike.
