NDP, Ottawa tapping province’s beer drinkers

The recent announcement from the Calgary Stampede that Alberta craft brewers had finally breached the event’s Budweiser monopoly is great news for our province’s burgeoning industry.

It’s a small foot in the door, but during this year’s Stampede visitors to the Big Four Station will have the opportunity to partake in nearly two dozen different offerings from a variety of Alberta small brewers. It’s an ideal showcase for some of the amazing products these brewers are creating.

Unfortunately, what visitors to our city and province might also notice is the high prices for beers of all kinds. But it’s not just the Alberta government that is to blame for that — the federal government is piling on, too.

While the Alberta government has certainly emphasized the steps it has taken to assist Alberta’s craft beer industry, recent legal challenges over the government’s policy have shed some light on a different kind of motivation.

As the Canadian Constitution Foundation discovered through internal government documents filed in court, the motivation for raising beer taxes was not really any different from the motivation for raising any other tax: revenue.

Finance Minister Joe Ceci had directed his department to find “an additional $85 million in revenue from liquor markups.”

While there is much to envy about Alberta’s system — privatized retail, abundant selection, and now a thriving craft industry — we’ve been steadily losing ground when it comes to price competitiveness. Successive governments have long viewed beer drinkers as a revenue source to be tapped.

The last PC budget in 2015 increased the beer markup, and then the NDP subsequently increased that rate by another five cents, to its current rate of $1.25 per litre. There was a brief experimentation with more favourable rates for Alberta small brewers, but various legal challenges prompted the government to apply the full rate across the board and instead offer subsidies to craft brewers.

The result is still higher prices and more government revenue.

In a piece he wrote recently for Postmedia, Ceci made the rather bizarre claim that “Alberta’s markup for beer remains among the lowest in the country.” While the top rate in Saskatchewan is indeed higher ($1.56 per litre), the top rate is lower in B.C. ($1.08), Ontario ($0.85), and Quebec ($0.63).

A typical 24-pack of beer from one of the big brewers, for example, is cheaper here than in Saskatchewan and Newfoundland, but more expensive than in every other province.

Now, the feds are moving to compound the situation. The recent federal budget included not only a two per cent increase in beer taxes, but also a built-in, perpetual automatic annual increase. According to the industry group Beer Canada, this new inflation-adjusted alcohol tax will generate nearly half a billion dollars over the next five years.

To add insult to the injury of beer drinkers, both the premier and the prime minister are constantly boasting of how they’re making “life more affordable” for the middle class. That was a major theme, for example, in the Alberta government’s speech from the throne three months ago. And just last week, in rejecting a tax on Internet service, Prime Minister Trudeau declared, “we’re not raising taxes on the middle class, we’re lowering them.”

Certainly, beer drinkers would beg to differ on all counts.

Beer Canada has also warned that the ever-increasing taxes on beer could further damage the industry, pointing to an 11 per cent decline in per capita beer consumption over the past decade. If governments are going to position themselves as champions of the local beer industry, making it more expensive for consumers to buy the product in the first place seems rather counterproductive.

There’s much more that needs to be done to help grow the industry, such as eliminating protectionist rules that limit interprovincial beer trade. But first and foremost, governments need to break their habit of treating beer drinkers as an easy source of revenue.

“Afternoons with Rob Breakenridge” airs weekdays 12:30-3 p.m. on NewsTalk 770. rob.breakenridge@corusent.com twitter.com/RobBreakenridge