Alberta defends brewery program

The Alberta government argued for the constitutionality of its craft beer program in court Tuesday following legal challenges by out-of-province breweries.

Toronto-based Steam Whistle Brewing and Saskatoon-based Great Western Brewing Co. say the system, which charges all small breweries $1.25 per litre sold but returns much of that to Alberta producers in the form of a grant, effectively provides an unconstitutional trade barrier.

The current program in Alberta replaced an earlier markup on breweries that only applied to provinces east of Saskatchewan, which was abandoned after Steam Whistle secured an injunction against the old system in January 2016.

Lawyer Sean McDonough defended the government’s position at the Court of Queen’s Bench in Calgary, arguing the markup is not a tax, and that the Alberta government has the right to support its small breweries.

“Alberta wanted to have a single markup to address perceived trade risks. Alberta also wanted to support small brewers, like all provinces do.”

He said many provinces help their small brewery industries through tax rebates, direct grants, and preferential treatment in government-run retail stores, with Alberta simply doing the same.

Lawyers for the plantiffs have argued that the new system is simply an attempt to hide Alberta’s efforts of continuing with the old preferential system, with the grant making up for the markup.