Wednesday, 05 July 2017 11:14

Small brewers should be exempt from tax hikes

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Full disclosure: I am one of the owners of Theoretically Brewing Company based in Lethbridge, so the move to tie Federal Excise Tax on alcohol to the CPI directly affects my business.
On June 22, the federal budget was approved which included measures to tie federal excise taxes on alcohol to the Consumer Price Index, which means that as inflation goes up, so will taxes on booze.
Now, excise tax is applied to many different things: almost everything imported — petroleum, alcohol, tobacco, shampoo (yes, really), but only the excise tax on alcohol was selected to be tied to the CPI in the budget.
Excise tax is paid by manufacturers/importers of alcoholic products on a per-litre basis, and makes up a good portion of the cost of your beverage. Often these taxes are passed down to the consumer, which means that starting next year, and indefinitely, the price of alcohol will climb steadily.
This is not a good thing, particularly for a fledgling brewing/distilling industry just getting on its feet in Alberta.
We would like to propose an equitable solution to the tax increases: exemption for craft producers making less than 5,000hL annually and using 100 per cent -Canadian-grown/processed malts in their product.
Malt (including barley and other grains) is the key ingredient in beer. Small craft producers focus on sourcing ingredients as close to home as they can —  which is important in southern Alberta where malting barley is becoming one of the biggest crops. We proudly source all of our ingredients (hops, yeast, and malt) from Canadian suppliers.
There is already precedent for this as wine made with Canadian-grown grapes is exempt from excise taxes. We think the same should apply to beer and spirits.
This will accomplish three things:
1. Make locally-made craft beer more competitive in the market, which will ensure employment opportunities as the businesses grow (craft brewers hold five per cent market share in Alberta but employ over 80 per cent of the people in brewery-related jobs);
2. Ensure that local barley farmers (our heroes) have a constant and growing demand for their crops (bolsters local economy); and
3. Give rise to a small-batch malting industry already in its infancy in the province — more jobs.
We call upon the federal government to support the growing craft-brewing industry across the nation, and provide an exemption for your small, local brewers.
Kelti Boissonneault, Lethbridge, Alta.

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