Tax on your favourite alcoholic drink has just been capped at 2% — at least until 2026
The bad news: the alcohol tax is about to go up. The not-so-bad news: it’s going up less than initially anticipated.
On Saturday, March 9, Deputy Prime Minister and Minister of Finance Chrystia Freeland and Minister of Small Business Rechie Valdez announced that the planned 4.7 percent alcohol excise tax has just been capped at 2 percent for the next two years.
“Canada’s small craft brewers are among the finest in the world and are an important contributor to our growing economy by creating jobs in communities across the country,” stated Freeland at a press event. “Today’s announcement is good news for Canadians and for the craft breweries they visit, which will now benefit from thousands of dollars in new tax relief every year.”
The 2 percent tax will apply to beer, spirits, and wine and will take effect on April 1.
Local Canadian brewers are valued parts of communities across our country. Today we’re announcing additional relief and support for Canadian brewers by capping the excise duty increase for two years and cutting taxes for small craft breweries. pic.twitter.com/iqt45MD0Mm
— Chrystia Freeland (@cafreeland) March 9, 2024
Valdez stated in a post on X that the cap will help keep “costs low for small businesses in the industry.”
Great news for 🇨🇦 beer! Today, we announced that we are:
➡️ cutting excise taxes in HALF for small craft breweries
➡️ capping the excise duty increase for 2 more years for beer, wine & spirits
➡️ keeping costs low for small businesses in the industry 🍻 pic.twitter.com/LjHmUNHEJD— Rechie Valdez (@rechievaldez) March 9, 2024
According to the Canadian Craft Brewers Association, there are an estimated 1,100 small and independent breweries in Canada, and 95 percent of them generate less than $10 million in revenue annually. Nearly 23,000 Canadians work at breweries, according to a 2022 labour report by Statistics Canada.
Despite efforts to lower taxes, not everyone sees it as a glass-half-full situation.
But it’s still going up.
— Freek (@zwaaggy) March 9, 2024
You’re still raising taxes. On everyone and everything. 🤦♀️
— NoName (@CarmenS45679267) March 10, 2024
So they just didn’t raise it as much as they planned, wow, still raised it, another tax grab
— Andrew MacMillan (@AndrewMacMilla4) March 9, 2024
However, others agree that the announcement will benefit small businesses.
I don’t really drink beer but these measures will actually support small businesses and stimulate productivity. Better late than never Rechie.
— George 🍎 (@georgematta) March 10, 2024
What are your thoughts on this tax cap?
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