Ottawa breweries say alcohol tax hike will hurt them

Local brewers in Ottawa are pushing for the federal government to freeze or lower the federal alcohol tax.

“We cannot afford to absorb a full six-plus percent increase on our taxes,” said Paul Meek the president of Kichesippi Beer Co.

On April 1st the 6.3 per cent federal excise tax is slated to go into effect on beer, wine and spirits.

Taxes already make up 50 per cent of the cost of beer, 65 per cent of the price of wine and 75 per cent of spirits, according to the Canadian Taxpayers Federation,

“We’re not saying don’t increase it. We’re saying let’s keep it in the one to three range,” Meek said. “This is the highest tax increase the industry has seen in over 40 years.”

The tax was introduced in 2017 and climbs every year, tied directly to the rate of inflation.

Like many industries, bars and restaurants have been hit hard by the pandemic and are still recovering while keeping up with inflation and the rising costs of raw materials. 

“The price of cans have gone up; yeast, labour... pretty much everything has gone up,” said Kichesippi Beer Co. head brewer Philip Kochanke.

“Before the pandemic we were talking about growth. Now we’re talking about survival,” said Mark Plante the co-owner of Stray Dog Brewery. 

Like many businesses during the pandemic, Stray Dog took on $60,000 of government aid intended for small businesses to keep them afloat. But come December, they'll have to pay most of it back.

“If you can’t, they’re going claw that back and you have to pay the entire amount plus interest,” Plante said. 

Advocates want an extension to pay back the money until 2024 as the hospitality industry continues to recoup losses and keep up with tax hikes at both the federal and provincial level.

“We’re not asking for favours. Just give us an even playing field,” said Meek. “To hit on an industry that’s struggled the last few years this is not doing anything to help that industry.”