Grant relief for small brewers
Program will help compensate for increased government beer mark-up
A new provincial grant program could see $20 million annually handed back to Alberta brewers to expand their businesses and grow the local craft beer sector.
Under the terms of the Alberta Small Brewers Development Program — announced by Finance Minister Joe Ceci at an event in Calgary on Thursday — any brewer who produces no more than 300,000 hectolitres of Albertamade beer annually will be eligible to apply for the grant, which will be allocated monthly based on sales volumes.
Ceci said the government estimates it could hand out $20 million annually, though he anticipates only $12 million will be utilized this year due to the program’s late start date.
He said the province’s 37 small brewers will receive letters Thursday with details about the program, and could receive their first cheque next week if they apply by Aug. 3.
“This program will drive opportunity through job creation and growth in industries, and investment in the liquor manufacturing sector in our province,” Ceci said. “We’re really excited about taking this important step that is going to help this small but growing industry get even better.”
The grant program is the latest change to the province’s beer tax system, coming on the heels of an announcement earlier this month that the government would eliminate the lower graduated markup rate applied to beer produced by small craft brewers in the three western provinces (those covered by the New West Partnership trade agreement).
The graduated rate — which could be as low as 20 cents a litre for the smallest producers — was replaced instead by an across-theboard markup of $1.25 per litre for all beer, regardless of where it is produced.
With the announcement of the new grant program, which will be funded from the higher markups collected by the Alberta Gaming and Liquor Commission, Alberta craft brewers affected by the rate hike will get at least a significant portion of their money back.
Saskatchewan and B.C. brewers, however, will not. Even if the government were to hand out $20 million in government grants annually to the craft brewing industry, the increased markup rate, which comes into effect Aug. 1, still represents a $16 million net positive for the province.
Most of that will come from higher markups paid by small brewers in Alberta’s neighbouring provinces.
Earlier this month, brewers in B.C. and Saskatchewan, as well as Saskatchewan Premier Brad Wall, sounded the alarm about a potential grant reserved for Alberta brewers, suggesting that such a program could violate the terms of the New West Partnership trade agreement.
Ceci said Thursday that argument doesn’t hold water since Alberta’s liquor retailing system is still more open than in other provinces, where governmentcontrolled liquor stores encourage the promotion and sale of local products above others.
“We know that anyone who’s got a liquor product who wants to come into Alberta can come into Alberta We don’t have roadblocks in their way as other provinces do,” Ceci said.
“So we believe we’re trade-compliant in that regard because we’re the most open.”
Alberta Small Brewers Association executive director Terry Rock praised the provincial government and the new grant program, saying it recognizes the potential of Alberta’s small but growing craft beer industry. “We’re really pleased that they’ve, over a couple of tries now, found a way we think will really support growth in this industry.”
Rock said he wasn’t sure if the new program would put small brewers back in the same financial position they were in under the old graduated mark-up system, but that it certainly wouldn’t worsen the situation.
“Our intent was that they’d be no worse off, and we think that’s been accomplished,” he said.
“It’s too many moving pieces to know if it’s exactly the same.”
But Wildrose shadow finance minister Derek Fildebrandt said the program is “small-minded” and ignores the best interests of consumers.
“Of course brewers should be pleased that the massive new taxes just imposed on them are going to be at least somewhat made whole on the other side in the form of grants,” Fildebrandt said.
“But we do not believe supporting our brewers means we have to penalize consumers with higher beer taxes. It’s just not fair.”
Fildebrandt said the NDP government should be working to lower other provinces’ trade barriers instead. “Consumers never win with protectionism,” he said. “This is going to make beer more expensive in Alberta and limit, or at least penalize, consumer choice.”