Beer Canada, alongside Restaurants Canada, Spirits Canada and the Canadian Vintners Association has launched corkthetax.ca to get Canadians on-side and raise awareness of the escalator tax mechanism on beer, wine and spirits buried within Budget 2017.
The proposed tax mechanism still has to be approved by the Senate of Canada which may yet disallow the policy as it imposes future tax increases while avoiding Parliamentary scrutiny.
Beer Canada explained that Canadians already pay some of the highest taxes on beverage alcohol in the world.
The average price of 24 bottles of beer in Canada is 50% tax. That is over and above payroll taxes, income taxes, municipal property taxes, licensing fees and a myriad of other taxes that are built into the price.
“Two things in Budget 2017 negatively impact domestic brewers: a 2% increase to the excise duty on beer and a mechanism that will automatically hike excise by the rate of inflation every year,” said Luke Harford, President of Beer Canada. “The 2% is not helpful but this escalator, the automatic annual tax hikes, will do far more damage and we are hopeful the Senate will stop it.”
A hidden excise escalator that automatically increases the tax on beverage alcohol is unfair to lower and middle income Canadians, the organisation added.
They add that excise is a regressive tax and is based on volume, not on price. The hidden escalator will have the biggest regressive impact on Canada’s “value priced” wines, beers and spirit brands where excise makes up a higher proportion of the final price.
The proposed legislation to implement the escalator tax is included in Bill C-44 and will make its way through the Parliamentary process by mid-June. The coalition hopes the Senate will take note of the opposition to never ending tax hikes on beverage alcohol.
For more information and to join the campaign, go online at corkthetax.ca #corkthetax