the country. He says the rigidly applied automatic annual inflation
adjustments to the excise duty on wine, without Parliamentary
oversight, are inappropriate for the wine industry and are jeopar-dizing
the competitiveness and growth of Canadian vintners.
“Producers will either absorb the tax increase, leaving them
slimmer margins for investment in their vineyards and wineries
(undermining growth and international competitiveness), or pass
the added cost to consumers, risking a decrease in sales and poten-tial
displacement by imports.”
He adds that Parliamentarians should have the right to vote
on tax increases.
“Even without inflation indexation, Canadian excise duty
rates on wine are already amongst the highest in the world – more
than double the rate of our largest trading partner, the United
States. And, effective January 2018, the U.S. government expanded
its excise tax credit to U.S. wine producers, thus reducing the excise
rate from $0.37 (Canadian) to as low as $.024 (Canadian) per litre,
compared to the 2018 rate of $0.64 (Canadian) per litre.”
Paszkowski adds that a 2017 economic study commissioned
by the Canadian Vintners Association concluded that given the
price sensitivity of consumers, a two per cent annual escalation
of the excise duty on Canadian producers – over the 2018 to 2023
COV E R F E AT U R E
“Our beer industry is threatened by runaway
taxes, yet in the spring of 2017 – with
no industry consultations or economic
assessments – the Government of Canada
quietly slid an automatic tax escalator
mechanism into legislation which imposes
an automatic hike to excise duty rates on
all beverage alcohol every April 1.”
– Luke Harford, President, Beer Canada
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