Canada has some of the highest taxes on beer in the world. Today, almost 50% of the price we pay for beer is taxes, which includes a federal excise tax, federal sales tax, provincial and territorial beer commodity tax, and provincial and territorial sales tax, as well as charges and markups. Most of these taxes end up falling on the consumer.
The beer industry also supports 1 in every 120 jobs in Canada, either directly or indirectly. In 2019 alone, it contributed about $13.6 billion to Canada’s GDP, and in 2016, it was responsible for $5.7 billion in government tax revenues.
But, like many industries, COVID-19 has impacted the brewers and their ability to stay viable. It is time for a re-examination of this situation—and as conversations concerning the “pandemic recovery” spread, now is a good time to undertake a review of steadily increasing taxes on the beer industry.
As Canada charts its course to post-pandemic recovery, it’s imperative that we approach our tax structures with a lens of fairness. That means, we’ve got to critically examine who’s paying their share for recovery, and who’s shouldering the financial burden. Multinational companies, particularly those who pay no or inadequate taxes at the moment, need to pay their fair share. Tax structures, therefore, should be reviewed through a lens of fairness. Governments will inevitably need to raise revenue, but they should resist the urge to return to the familiar playbook of raising beer taxes further.
Read the full report: Moving Toward Fairness in TaxationDownload An Examination of Beer Taxation in Canada