Beer Canada is urging the federal government to provide targeted tax relief for the sector in its Budget 2022.
In its brief, Beer Canada highlights the vital role and impact Canadian brewers of all sizes have on the economy and communities across the country. It stresses that 85 per cent of beer sold in Canada is produced domestically from barley and other grains grown here, by highly skilled and, often, unionized workers.
Beer Canada’s key recommendations in support of the government’s stated focus on jobs, growth, and making life more affordable begin with a call for the government to defer the April 1, 2022, and 2023 federal beer excise duty increases to respond to “dramatic increase in global inflation and the unique economic challenges facing brewers, the broader hospitality sector, and consumers”.
Beer Canada also wants the government to halve the excise duty rates applicable to draught beer primarily sold in restaurants, bars, and taprooms across Canada to help mitigate the rising food and beverage costs across the hospitality sector and help these businesses successfully recover from the pandemic. This echoes a call that the organization issued back in summer 2021.
Finally, it is asking the government to eliminate alcohol excise duties on non-alcoholic beer to support healthy lifestyle choices, promote socially responsible health policy, encourage investment, improve product selection, and provide non-alcoholic beer with the same excise exemption already afforded non-alcoholic wine and spirits and given to beer by many countries.
Due in large part to the intermittent closure of restaurants, Beer Canada estimates an overall beer sales volumes decline of 3.2 per cent in 2021 versus 2019. Draught beer sales declined by 55 per cent alone in 2020 and remain well below pre-pandemic levels.
Now, as businesses begin to safely emerge and recover from the pandemic, says a Beer Canada release, the industry faces unprecedented rising input costs and supply-chain disruptions that are creating additional challenges at the worst possible time and threaten to further increase beer prices.
“Now is the time for targeted beer and hospitality tax relief, not to make things worse by increasing federal excise duties on beer,” said CJ Hélie, President. “Adding to inflationary pressures by imposing new taxes on consumers, brewers and the hospitality sector at this time would work against the government’s objective of doing its part to make life more affordable for Canadians”.
Before the pandemic, there were over 1200 brewing facilities and brewers directly supported 19,000 jobs in Canada. The sale of beer accounted for 149,000 jobs across the industry’s value chain, contributing $13.6 billion to gross domestic product. The domestic beer industry, says Beer Canada, has three times the economic impact of wine and spirits combined.