2% Cap on Canadian Alcohol Excise Tax Extended for Two More Years

Canada’s food service and alcohol industries are breathing a collective sigh of relief as the Federal Government announced a freeze on the alcohol excise tax which was set to increase by 4.7% on April 1, 2024. On March 9, Finance Minister Chrystia Freeland announced the cap on the current 2% tax for an additional two years.

As reported by CBC News, alcohol industry advocates had been lobbying the government to scrap the planned increase, which would place more financial pressures on already struggling Canadian businesses. Restaurants Canada, an advocate for the food services sector applauds the move saying that “the financial relief will give operators a chance to catch their breath as they try to cope with inflation and bounce back from the COVID-19 pandemic.”

Other industry advocates and stakeholders, including ABLE BC, Beer Canada, and the BC Craft Brewers Guild had been pushing for an excise tax cap on behalf of their member businesses. The government also announced a 50% reduction in excise duty rates for breweries on the first 15,000 hectolitres (hL) of beer brewed in Canada. According to Canada’s Department of Finance backgrounder on the announcement “This would lower excise duties on all beer brewed in Canada below the 15,000 hL threshold, and would benefit a broad range of producers, with 94 per cent of Canadian brewers having total production below 15,000 hL.”

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