Federal government caps alcohol excise tax at 2%

Ottawa – The federal government announced it is capping the alcohol excise duty at two per cent.

The government is proposing to cap the inflation adjustment at two per cent for beer, spirit, and wine excise duties; and cut by half the excise duty rate on the first 15,000 hectolitres of beer brewed in Canada, to provide the typical craft brewery with up to $86,952 in additional tax relief in 2024-25.

The government said in a news release these measures will be effective for two years starting on April 1, 2024.

Restaurants Canada applauded the move. “We have been advocating tirelessly for this decision to support the foodservice industry, and this news demonstrates that our concerns have been heard and are taken seriously,” said Kelly Higginson, president and CEO of the industry association.

“The cap on the alcohol tax gives operators a chance to catch their breath. For the past four years, restaurants have been dealt one blow after another. Our most recent data shows 62 per cent of restaurants in Canada are operating at a loss or barely breaking even, compared to 12 per cent pre-pandemic.”

This change came about through collaborative advocacy efforts between Restaurants Canada and a coalition of brewers, unions, consumers, farmers and retailers.

“On behalf of our members, we thank the Minister of Small Business, Rechie Valdez, for working so hard on this file and seeing it through and to Finance Minister Chrystia Freeland for signalling the government’s commitment to helping our industry make it through a difficult time,” Higginson said.