A 6.3% liquor excise tax increase is hitting Canadians next month

Mar 20 2023, 9:30 pm

Canadians are set to pay slightly more for beer, wine, and other alcohol starting April 1 as the federal government’s annual excise tax adjustment kicks in.

By law, the excise tax adjusts every year on April 1 according to the Consumer Price Index (aka inflation). This year, because inflation has been so high, the federal excise tax on alcohol is going up by 6.3%.

But before you start sprinting to your nearest liquor store to stock up, remember that this increase is only to the tax itself — not the entire cost of the product.

Adrienne Vaupshas, press secretary with the prime minister and minister of finance’s office, told Daily Hive the April 1 adjustment will work out to approximately three-quarters of a cent ($0.0078) per can of beer.

Excise taxes are imposed at the manufacturing level, at the time of packaging for domestic products and at the time of import for foreign ones. The federal government says that, overall, excise taxes make up a relatively small portion of the liquor product’s cost — with liquor board fees and provincial taxes taking up the bulk.

Beer Canada, an organization representing Canadian brewers, is calling on the federal government to put a stop to the automatic excise tax increases every year. It says brewers are already facing cost increases, and the tax hike could have negative consequences for businesses and workers.

Revenues from federal alcohol taxes go to the Consolidated Revenue Fund, which is used to pay for all federal government expenses.

Megan DevlinMegan Devlin

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