After a large outcry from distillers, brewers and the restaurant industry, the federal government has eased the April 1 tax hike on liquor.
As we reported on this site back on March 3, taxes on alcohol were set to increase by 6.3 per cent. But, in this week’s federal budget, the decision was made to lower that to a two per cent hike.
Shayna Hansen, co-owner of Edmonton’s Hansen Distillery, said the clemency from the feds is welcomed.
“We are encouraged that this year’s excise sales tax will be capped at two per cent in comparison to the projected 6.3 per cent increase, which would have severely restricted our ability to remain competitive both in local markets and outside of Alberta,” she stated in an email.
“As a small business, we have already felt the impacts of inflation — on everything from our ingredients to our supplies and the rising utility and operational costs. At Hansen, we take pride in using real ingredients – all of which have increased over the past year. The cap on this year’s excise tax also means that we can continue to make an affordable, high quality local product for our customers to enjoy without compromising our values. As a member of the Alberta Craft Distillers Association, we know that this sentiment is echoed by our partners and friends in the industry.”
The ACFA had been outspoken critics of the planned tax hike, as was Restaurants Canada. Local restaurateurs told us that the timing of such a large hike — when they’re already dealing with skyrocketing costs for ingredients — would have been very damaging to their businesses.