44th Parliament223Government response tabledMay 8, 2023441-01195441-01195 (Taxation)PatKellyCalgary Rocky RidgeConservativeABMarch 23, 2023May 8, 2023March 22, 2023Petition to the House of CommonsWHEREAS:
  • Canada produces quality beer, wine, and spirits which can compete on world markets when not hobbled by excessive taxes and excise duties;
  • The annual, inflation-adjusted, escalator on excise duties on beer, wine, and spirits raises the cost of producing beverage alcohol, making Canadian products less competitive and increasing costs for consumers;
  • The cost of living has risen rapidly in 2021 and 2022, making essentials like food, fuel, and housing more expensive for Canadians;
  • Parliament has a responsibility to vote on revenue and spending measures, not hide tax increases in the background by tying them to inflation; and
  • Repealing the excise escalator on alcohol would help Canadian producers compete, would slow the increase in cost of living, and would restore democratic accountability in voting for revenue measures.
We, the undersigned, supporters of Canadian industry, call upon the House of Commons to:
  • Vote in favour of Bill C-266 to repeal the inflation-adjusted escalator on excise duty rates.
Response by the Deputy Prime Minister and Minister of FinanceSigned by (Minister or Parliamentary Secretary): The Honourable Chrystia FreelandThe Government of Canada recognizes the significant contribution that the Canadian wineries, breweries, cideries and distilleries make to the national economy through job creation and sales of high-quality products. This is why the government implemented the Wine Sector Support Program, providing up to $166.2 million to Agriculture and Agri-Food Canada in the 2022-23 and 2023-24 fiscal years, to support wineries in adapting to ongoing and emerging challenges.The government also recognizes the temporarily increased burden that elevated inflation could have on alcohol producers. As a result, Budget 2023 proposed to cap the annual inflationary adjustment to 2 percent for one year.The adjustments to excise duty rates do not generally represent an increase in real dollar terms – they are intended to preserve the effectiveness of the excise duties over time, to ensure that these duties continue to meet their policy objectives and to help avoid disproportionate ad hoc increases in the future.Indexation to inflation is a common feature of the tax and benefit systems, used in many other taxes, for example: the tobacco excise duties, income tax bracket thresholds, and the key tax credit amounts Canadians use when calculating their tax returns, such as the Basic Personal Amount and the Goods and Services Tax Credit. This practice is in line with many other countries that also annually adjust their alcohol taxes to account for inflation.Small- and medium-sized Canadian brewers also currently benefit from lower excise duty rates on the first 75,000 hectolitres (1 hectolitre equals 100 litres) of beer produced per year. In fiscal year 2023-24, the reduced duty rates would provide support of up to $868,464 for each domestic brewer. The Government of Canada included in Bill C-19 (Budget Implementation Act, 2022, No. 1), which received royal assent on June 23, 2022, the repeal of excise duty on non-alcoholic beer as of July 1, 2022, to encourage growth in this sector of the beer industry.
Alcoholic beveragesC-266, An Act to amend the Excise Act and the Excise Act, 2001 (adjusted duties - beer, malt liquor, spirits and wine)Excise taxes