‘Raise a glass’ to fight beer tax

Liquor importers and bar owners who say they’ve seen sales decline as a result of the Alberta government’s changes to the beer taxation system will gather Wednesday night to raise funds for a formal trade complaint lodged last summer.

Dubbed “Raise a Glass for Free Trade,” the event will be held at Bottlescrew Bill’s Pub to raise money for legal costs associated with the challenge launched by Calgary’s Artisan Ales and the Canadian Constitution Foundation. The local liquor importer, with the support of the non-profit advocacy group, is arguing the NDP government’s system of beer taxation and grants violates the Agreement on Internal Trade between the provinces as well as the Canadian Constitution.

“We’re fighting it but, honestly, for my business, the damage has been done,” said Tessier, who said Artisan Ales was forced to hike its prices in the aftermath of Alberta’s beer markup changes and saw sales decline 33 per cent in a 12-month period as a result.

“If the switch was flipped tomorrow, I don’t think my business would come back to the level it was. ”

In an effort to boost Alberta’s homegrown craft brewing industry, the NDP government announced in October 2015 that it would tax beer from small breweries located within New West Partnership provinces (B.C., Alberta and Saskatchewan) at a lower rate than craft beer from other jurisdictions. In the summer of 2016, it revised the rules again — announcing it would tax all beer at the same markup rate, with craft beer brewers in Alberta eligible for a grant program to help them grow their businesses.

Derek From, staff lawyer for the Canadian Constitution Foundation, said the grant program is essentially a rebate that helps Alberta craft brewers cope with the higher markup rate. Local importers and bars that specialize in stocking out-of-province products are getting no such help and are facing higher prices and declining sales as a result.

“The problem is that it’s discriminatory,” From said. “It applies differently to different businesses depending on where they get their beer from.”

Geoff Allan, general manager of Bottlescrew Bill’s, said the pub built its business around offering Calgary’s largest selection of craft beer, with more than 300 different products from across the country and around the world. He said the new Alberta policy has forced the pub to raise prices and remove several Ontario, Maritime and British Columbia beers from the menu.

“We noticed a decrease in sales with a lot of those products, just because of the price increase. Most people are going to go for the $7 beer over the $10 beer,” Allan said.

The “Raise A Glass” fundraiser comes less than a week after the Alberta government announced its intention to grow the province’s craft distillery industry through a grant program modelled on the existing one for small brewers. Finance Minister Joe Ceci told reporters he’s confident the beer grant system is compliant with inter-provincial trade rules, and he has no hesitation modelling a new spirits program after it.

Terry Rock, executive director of the Alberta Small Brewers Association, said any jurisdiction that wants to foster local craft brewing needs to recognize that the economics of the beer business are vastly tipped in favour of the multinational corporations.

“It’s working as it was intended,” said Rock of Alberta’s changes to the beer tax system, adding the number of craft breweries in the province has ballooned to approximately 45 from just 18 two years ago.

“The breweries are saying, ‘yes, you’ve created a level playing field and because of that, we’re expanding, we’re hiring, we’re buying new equipment.’ ”