Alberta digs in for fight over beer-rebate program
The provincial government is appealing a decision handed down by a trade panel in July that found Alberta’s beer taxation system, including a rebate program for local brewers, violates trade agreements.
“We stand firmly with Alberta small brewers, we will not abandon them now,” Finance Minister Joe Ceci told reporters Tuesday. “There have been 18 small breweries opened up in the year since the program started, it’s doing what it’s intended to do.”
The Agreement on Internal Trade panel decision determined that the government’s Alberta Small Brewers Development program didn’t comply with the province’s free-trade obligations.
In October 2015, the province imposed a markup on beer from provinces outside the New West Partnership, affecting manufacturers everywhere except British Columbia, Saskatchewan and Alberta.
Less than a year later, the government started taxing all craft beer at the same rate, amounting to $1.25 per litre, and launched the Alberta Small Brewers Development program to provide Alberta craft brewers with a rebate.
“We believe we are on the right track with our (program), that it’s having the desired effect and growing the beer manufacturing in this province,” Ceci said.
The policies were challenged by Calgary-based importer Artisan Ales, which claimed it has seen sales losses of around 40 per cent due to the changes. The company challenged the provincial tax and rebate program on the grounds it violated Canada’s Constitution Act and the Agreement on Internal Trade.
In July, the three-person panel ruled in favour of the company, giving the government six months to file an appeal or implement changes.
The Opposition United Conservative Party criticized the government’s decision to appeal.
“I am disappointed, but not surprised, to see Finance Minister Joe Ceci waste hard-earned taxpayer dollars doubling down on what is a clear violation of the Agreement on Internal Trade,” said finance critic Ric McIver in a statement Tuesday.
Ceci said he won’t describe the province’s legal strategy, including the grounds of the appeal, because it’s an ongoing trade challenge.
“We’re happy that (the government is appealing) and hope it concludes quickly,” said Terry Rock, executive director of the Alberta Small Brewers Association, on Tuesday. “It’s what we expected.”
He believes profit losses reported by importers are outweighed by the jobs created in local breweries.
“The reality is we were importing products at the cost of not having a growing local industry. One of the things we continue to say is that trade across Canada … is really an unbalanced situation ... We find it hard to believe Alberta is the province that is in the wrong.”
In November 2016, the province’s markup policy was challenged by Ontario-based Steam Whistle Brewing and Saskatchewan’s Great Western Brewing Company.