Alberta challenges ruling that says brewing tax violates trade rules

Incentive faces opposition from distributors

• Alberta’s beer war is opening on a new front.

The government says it will appeal a trade panel ruling that found the province’s incentive for Alberta brewers violates interprovincial free-trade obligations.

“We stand firmly with Alberta small brewers. We will not abandon them now,” Finance Minister Joe Ceci said Tuesday at the legislature.

“There have been 18 small breweries opened up in the year since the program started. It’s doing what it’s intended to do. Jobs are happening.”

Three weeks ago, a panel of the Agreement on Internal Trade determined that the financial incentive violates trade rules.

The challenge was filed by Artisan Ales, a Calgary-based importer of beer.

Artisan Ales co- owner Mike Tessier said he was not surprised Ceci has chosen to appeal. He said the province can’t give ground when it is also facing court challenges from two out- of- province brewers over the program.

Ceci should have pursued options to help small brewers in a trade-compliant way without inflicting collateral damage on others in the industry, Tessier suggested.

Ric McIver, finance critic for the United Conservative Party, said Ceci needs to accept the trade ruling and fix the incentive program.

McIver said the party wants businesses, including small brewers, to thrive but “we do not, however, agree that violating trade agreements with protectionist measures does anything to help these businesses thrive.”

The dispute began almost two years ago when Ceci announced changes to government markups on beer sales. Until then, producers had been charged on a sliding scale. Large producers paid the maximum of $1.25 a litre.

In October, 2015, Alberta kept the sliding scale for the New West Partnership at that time — Saskatchewan, Alberta and British Columbia — but made all other brewers pay the maximum $ 1. 25 regardless of how much or how little they sold.

Opponents argued this was a violation of free trade and Alberta ultimately acquiesced. A year ago, it changed the beer rules again.

This time, it made all beer producers pay the same $1.25 a litre. But it also introduced grants to help Alberta producers.

Artisan Ales argued the incentive program and oneprice markup were effectively retaining the previous approach through the back door. In a 2-1 decision, the panel agreed with Artisan.