Deputy Prime Minister and Minister of Finance the Honourable Chrystia Freeland and the Minister of Small Business the Honourable Rechie Valdez today announced two significant new beer excise duty relief measures for Canadians.
First, Canada’s annual automatic inflation-based increase to beer, wine and spirits taxes was capped at no more than 2% for two years. Second, additional tax relief was provided for the next two years on each brewer’s first 15,000 hl[1] of annual beer production.
“Today’s federal beer excise announcements provide critical predictability for the Canadian beer sector and fiscal breathing room for brewers” said, CJ Hélie, President of Beer Canada. “The measures will have a positive impact not only on brewers, but all along beer’s added-value supply chain from the farm to the bar”, he added.
Under an inflation-based indexing formula introduced to Canada’s Excise Act in 2017, federal beer taxes were scheduled to increase 4.7% on April 1, 2024. This increase will now be capped at 2%. Under the expanded progressive beer banding excise duty relief structure announced, all Canadian brewers will be eligible for an 80% to 90% rate reduction on their first 15,000 hl of annual beer production for the next two years.
The new banding structure will benefit all brewers but will be particularly beneficial to the smallest 1,240 Canadian brewers producing less than 15,000 hl annually.
“This is really great news for the beer and hospitality sector, and we greatly appreciate all the support we have received from Members of Parliament in helping to address our current economic challenges”, Hélie added.
Stickier inflation than hoped for and the ongoing impact of aggressive interest rates hikes have combined to significantly impact family budgets and their discretionary spending, including enjoying a social pint of beer amongst family, friends, neighbours, or co-workers.
We appreciate the Government’s positive response to a vast coalition of consumers and local businesses across beer’s value- chain including brewers, bars and restaurants, organized labour, grain growers, and chambers of commerce that had called for the need for beer tax relief.