COV E R F E AT U R E
Escalator
Tax Draws
Critics
In 2017, 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.
By Lisa Kopochinski
Canada is known for many wonderful things. Having one of
the highest taxation rates on alcohol in the world is prob-ably
not one of them. For example, 47 per cent of the price
of a bottle of beer is tax, while for a bottle of Canadian whisky or
other spirits, 80 per cent of what consumers pay is tax.
Yet, on April 1, 2018, an “escalator tax” was introduced that
automatically increases the tax rate annually. Suffice to say, this
was no April Fool’s joke. Many in the industry are not pleased and
are loudly opposing this recurring annual increase.
“At 47 per cent of the price already, we believe Canadian
beer drinkers pay enough tax on their beer,” said Luke Harford,
president of Beer Canada, an Ottawa-based association that is the
national voice of beer, representing more than 50 Canadian brew-ing
companies and 90 per cent of beer made in Canada. The asso-ciation
is a leading proponent in the moderate and responsible
consumption of alcohol.
“Canadians pay one of the highest beer taxes in the world.
The tax on beer is five times higher here than it is in the U.S. Here,
you pay $20 in tax on a case. In the U.S., you pay just four. 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 by the rate
of inflation.”
Dan Paszkowski is president of the Canadian Vintners
Association (CVA), the national voice of wine in Canada. Located in
Ottawa, CVA represents large, medium and small wineries across
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