MP calls for federal alcohol excise tax increase to be scrapped

Stop the tax hike

Increases in taxes are top of mind for businesses and families.

For many local small businesses in Kelowna-Lake Country and across Canada, there's growing concern about the 4.7% alcohol excise tax increase hitting their bottom line by on April 1.

Local wineries, breweries, cideries and distilleries will face this significant tax hike. The increase, known as an "escalator” tax, is tied to inflation, so it is higher in years when inflation was high the previous year. "Escalator" is just a fancy bureaucratic word for automatic.

It is an automatic tax increase put in by the current government and, therefore, it is not included in the budget and there is no debate or vote in Parliament.

I am against this and believe any tax increases should be debated and voted on by parliamentarians.

This dates back to 2017, when the current government set this escalator tax increase and tied it to the Consumer Price Index. In practical terms, that means the excise tax increase is tied, via a formula, to Canada's inflation rate.

The government proceeded at that time, despite objections from Conservatives, industry leaders and small businesses. There were also warnings it might lead to trade disputes, which it did with Australia.

When I was first elected in 2019, I spoke out against annual escalator tax increases and have made the case about its unfairness every year since.

The excise tax increase comes at a time when our local beverage producers, and those in the hospitality industry such as restaurants and pubs, are already grappling with rising costs of everything, including raw materials, packaging, energy, rent, and transportation. Many have incurred extra debt loads and have not seen sales return to 2019 levels.

With interest rates high, more of their bottom line goes to debt financing.

Canada’s alcohol producers stepped up during the pandemic to retool and manufacture sanitizer and they are thanked by yearly excise, payroll and carbon tax increases.

More than 95% of wineries, breweries, cideries and distilleries in Canada are small businesses. Many local producers have reached out to me expressing their concern about costs and tax increases.

Ultimately, the excise tax increase will be passed onto the consumer and will perpetuate higher inflation. It’s estimated this increase will cost Canadian taxpayers around $100 million in 2024-25. This, at a time when Canadians are dealing with the highest cost of living and highest interest rates in decades.

Appeals have been made to the federal government by industry organizations and, most recently, in an open letter to the Minister of Finance with an urgent appeal from a group of unions representing brewery, beer retail and distribution workers from across the country, who said the increase jeopardizes the livelihoods of their workers

The Conservatives have continually called for an end to all new taxes and all tax increases, including the excise tax increase. Canadians, whether trying to look after their families, businesses or homes, cannot afford the federal government taking more money out of their pockets.

I will keep pushing to stop this April Fools Day tax increase so local producers and those in the hospitality industry won't have to shoulder an additional financial load that will be passed onto consumers and further fuel our cost of living crisis.

If you need assistance with federal programs or have any thoughts to share, feel free to reach out, at 250-470-5075 or at [email protected].

Tracy Gray is the Conservative MP for Kelowna-Lake Country.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

More In Your Service articles

About the Author

Tracy Gray, Conservative MP for Kelowna-Lake Country, is her party's critic for Employment, Future Workforce Development and Disability Inclusion

She is a member of the national caucus committee’s credit union caucus, wine caucus, and aviation caucus.

Gray, who has won the RBC Canadian Woman Entrepreneur of the Year Award, and the Kelowna Chamber of Commerce Business Excellence Award, worked for 27 years in the B.C. beverage industry.

She founded and owned Discover Wines VQA Wine Stores, which included the No. 1 wine store in B.C. for 13 years. She has been involved in small businesses in different sectors — financing, importing, oil and gas services and a technology start-up — and is among the “100 New Woman Pioneers in B.C."

Gray was a Kelowna city councillor for the 2014 term, sat on the Passenger Transportation Board from 2010-2012 and was elected to the board of Prospera Credit Union for 10 years.

In addition, she served on the boards of the Okanagan Film Commission, Clubhouse Childcare Society, Kelowna Chamber of Commerce, Okanagan Regional Library and was chairwoman of the Okanagan Basin Water Board.

She volunteers extensively in the community and welcomes connecting with residents.

She can be reached at 250-470-5075, and [email protected]


The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

Previous Stories