Craft distillers’ program to be based on brewers’ model
CALGARY A new government grant program aimed at giving Alberta’s small distillers a boost is being cheered by the province’s fledgling craft spirits industry, even though it will be modelled on an existing craft beer program that has sparked lawsuits from out-of-province brewers.
The Notley government announced in Thursday’s budget a plan to grow the province’s craft distillery business. While details were not provided, Finance Minister Joe Ceci said it will be modelled on the Alberta Small Brewers Development Program introduced last July.
“The Alberta small brewery grant program is creating jobs and driving new investment,” Ceci said in his budget address. “This year, we are going to build on the success of our craft brewing program and work to model a similar program for Alberta’s craft distillers.”
The news was applauded by producers of locally made vodka, gin, rum and whisky. Up until 2013, minimum production requirements in Alberta meant the province had virtually no craft distilling industry to speak of. However, the removal of those minimum requirements has prompted the launch in recent years of approximately a dozen new businesses.
Susan Ransom, who opened Krang Spirits in Cochrane in November and sits on the executive of the Alberta Craft Distillers Association, said opening a distillery is significantly more expensive than opening a brewery because of the equipment required. She said distillers in the province have been lobbying for several years now for a grant or rebate program that would help more fledgling operators get off the ground.
“I’m really excited,” Ransom said of Thursday’s announcement. “I can tell you right now that without this grant program, you would never get many more than 12 to 15 (craft distillers) in the province. Certain distillers in the province have sold virtually everything they own in order to get open.”
The province’s grant program for craft brewers, through which the government will award up to $20 million in grants annually to small producers of Alberta-made beer, was hailed by Ceci on Thursday as a significant success story that has helped grow the province’s craft beer industry from just 14 breweries in 2015 to upwards of 70.
However, that program was also met by lawsuits from outof-province companies. Ontariobased Steam Whistle Brewing and Saskatchewan-based Great Western Brewing Company have both alleged that Alberta’s beer tax structure and grant system is unconstitutional and builds barriers against craft brewers from outside the province.
In November, an Alberta court sided with the out-of-province breweries and granted an injunction against Alberta’s beer policy. A full hearing is expected in May.
But Ceci told reporters Thursday he is confident the province’s efforts to boost local brewing and distilling are compliant with interprovincial trade rules. He said Alberta’s liquor retailing system is still more open than that of other provinces, where governmentcontrolled liquor stores encourage the promotion and sale of local products above others.
“It’s the most open system of liquor marketing anywhere and it’s been successful, and the small brewers grant program is part of that success,” Ceci said. “And we’re going to keep being successful now with the distillers program.”
The distillers’ program was one of the only new perks for small businesses in Thursday’s provincial budget. By comparison, last year the government took advantage of budget day to announce a pair of tax credits aimed at boosting capital investment in small and medium-sized enterprises, as well as a reduction in the small business tax rate from three to two per cent.
Zoe Addington, policy director for the Calgary Chamber of Commerce, said the business organization had been hoping to see an increase in funding for the investor tax credits, or perhaps an expanded definition of “small business” so that more companies could qualify for the lower tax rate. She said the lack of additional support for innovation and entrepreneurship is disappointing.
“Diversification is about creating an environment in which businesses want to operate and have an opportunity to grow, and there’s
I can tell you right now that without this grant program, you would never get many more than 12 to 15 (craft distillers) in the province.
nothing in the budget that makes it easier to grow jobs or grow the economy,” Addington said.
Canadian Federation of Independent Business Alberta spokeswoman Amber Ruddy said measures such as the craft distilling grant and the investment tax credits show the government is taking a “niche approach” that picks and chooses industries, rather than offering broad-based support for small businesses.
“That’s not the way to create jobs in Alberta,” Ruddy said. “We really should be focusing on entrepreneurs if we want to grow the economy . . . And there’s nothing in here that does that — there’s nothing that reduces red tape for entrepreneurs, there’s no new tax measures to help business. It leaves us wanting more.”