Brewery Workers and Advocacy Groups Rally Against Federal Beer Tax Increase
More than a dozen unions representing Canadian brewery workers are intensifying their efforts to persuade Prime Minister Mark Carney to cancel the impending federal beer tax hike. Leaders from 13 unions have penned an open letter to Carney, urging the federal government to abandon the tax policy originally introduced under Justin Trudeau's administration.
The Impact of the Alcohol Escalator Tax
In place since the 2017 federal budget, the 2% alcohol escalator tax automatically increases each year, affecting beer, wine, and spirits. The next scheduled increase is set to take effect on April 1, 2026. Union leaders argue that this policy has led to significant challenges for the industry.
"Canadian workers who brew, package, deliver, and sell beer see the impacts of rising costs every day, both on the job and at home," the unions wrote in their letter. They highlighted that the cost of producing beer in Canada has risen sharply due to inflation, tariffs, and the automatic tax increases, which occur without parliamentary debate or vote.
Declining Sales and Competitive Disadvantage
Union leaders report that beer sales have declined "in lockstep" with the tax hike, which has increased by more than 18% since 2017. In contrast, U.S. federal beer excise rates have decreased over the past decade, creating a growing competitive disadvantage for Canadian breweries.
"We are increasingly concerned that another automatic beer tax increase, layered on top of tariffs, rising input costs, and stagnant sales, could push some breweries to reduce production and cut jobs," the unions stated. "For workers and their families, that uncertainty is real and deeply unsettling."
Advocacy Groups Join the Call
The Canadian Taxpayers Federation has also weighed in, calling on Carney's government to cancel the scheduled tax hike. Franco Terrazzano, the organization's federal director, emphasized the financial burden on Canadians.
"Canadians are struggling with the cost of everything and Carney shouldn’t make taxpayers pay more for a cold one," Terrazzano said in a statement. "Instead of making life even harder for brewers, distillers, pubs and restaurants, the federal government should cut taxes to make Canadian businesses more competitive."
Financial Implications and Democratic Concerns
Industry estimates suggest the alcohol tax hike will cost drinkers approximately $41 million in 2026-27. Since the inception of the escalator tax, the federal government has collected about $1.6 billion from alcohol consumers.
Terrazzano also pointed out that taxes from various levels of government account for roughly half the price of alcohol. "Automatic tax hikes are undemocratic, uncompetitive and unaffordable and they need to stop," he asserted. "If politicians think Canadians aren’t paying enough tax, they should at least have the spine to vote on the tax increase."
The unions are not only requesting the cancellation of the April increase but also advocating for the repeal of the automatic escalation mechanism. They argue that at a time when Canadians are grappling with affordability issues, additional taxes on a key manufacturing industry are unjustified.
