POINT NDP BREWING A COMPLETE MESS

If Albertans wish to understand how an accidental government is intentionally making a poor provincial economy worse, the clearest example is the province’s attack on trade in a favourite summertime beverage: beer.

Ever since last fall, the province has sought to remedy a non-existent problem: How craft beer producers in other provinces could sell their suds in Alberta at the same tax rate as made-inAlberta beer.

For years, any Canadian brewer with less than 20,000 hectolitres of annual beer production could sell into the Alberta market at the same tax rate as locals: 20 cents per litre.

It was a model of sensible policy. It allowed entrepreneurs with a great product to flourish regardless of their brewery’s home province.

Then, in its October budget, Alberta’s government hiked taxes and not just on carbon and corporations but on beer and in a discriminatory fashion.

The province demanded $1.25 per litre — a 525 per cent increase, on any beer brewed outside of Alberta. Saskatchewan and British Columbia brewers were exempted because of the New West Partnership, the 2010 interprovincial trade deal that sought to free up the flow of goods and services in the three westernmost provinces.

After the October budget, one Montreal-based brewery, Dieu du Ciel, noted the extra taxes meant a three-dollar hike in the price of their sixpacks sold in Alberta.

After a post-budget outcry, the province is revamping the beer tax once again: As of Aug. 5, all brewers “regardless of size or location” will pay the higher beer taxes.

Problem solved — except that the government will rake in an extra $36 million more from thirsty consumers.

The province claims its taxall-beer-more policy creates a level playing field.

Not exactly. The province will soon subsidize small Alberta brewers with some recycled taxpayer cash from the higher beer tax.

That’s a protectionist trade preference. It will only exacerbate the problem pointed to by Dieu du Ciel last fall: How for Canada’s craft brewers, it is easier to export beer to the United States and Europe than to other provinces.

Finance Minister Joe Ceci claims the new policy will diversify Alberta’s economy and create more “beer jobs.” Premier Rachel Notley called the move an “economic development strategy.”

Problem: Jacking up costs (taxes) in a recession and creating barriers to free-flowing trade (through subsidizing the locals) is the exact opposite of how any sensible government has acted on tax and trade files since the late 1920s/early 1930s experiment in interventionism and protectionism.

Those twin policy disasters greatly dampened demand because they drove up costs when the economy could least afford it (sound familiar?).

Both policies helped extend rather than cut short the Great Depression.

But Alberta’s protectionists have plenty of company and not just circa the 1930s. Micro-managing, entrepreneur-attacking. protectionist governments exist in Quebec, France, and in the most dramatic example — Venezuela. The provincial government even has a soulmate in the Republican nominee for president, Donald Trump, who in his Thursday acceptance speech attacked free trade deals such as NAFTA.

All such protectionists fail to create prosperity.

That’s because making merchandise or services more costly via government intervention means the money circulating in an economy is spent on fewer things; fewer goods and services produced then leads to fewer people employed.

Thus higher unemployment is the natural result of illadvised protectionism, local, national or international.

Alberta’s higher-tax/ anti-free trade policies will negatively hit consumers in Alberta and brewers elsewhere in Canada.

But the flawed move is instructive for another reason. For Albertans, the regressive policies demonstrate how little Alberta’s governing politicians actually know about creating a prosperous economy. Mark Milke is a Calgary author and consultant.