Committee softens bite of ‘beer tax’ increase
HOUSE OF COMMONS
OTTAWA • The House of Commons finance committee recommended on Thursday that the government reduce an impending increase in alcohol taxes, although it didn’t go as far as Conservative MPS wanted.
An amendment was passed by Liberal, NDP and Bloc MPS that recommended increasing taxes on alcohol purchasing by two per cent, as opposed to the slated 4.7 per cent increase that will come into effect on April 1.
A proposed motion by Conservative MP Jasraj Singh-hallan would have entirely negated the increase of the federal excise tax on alcohol — sometimes called the “beer tax” — but was rebuffed by the other parties.
The amendment recommending a two per cent tax increase proposed by Blaikie was based on the Bank of Canada’s target for inflation, but Conservative MPS argued that the increase in taxes might hurt businesses struggling to return to pre-pandemic numbers.
“Increasing taxes is not helping anyone. Not our small businesses, not our producers and not Canadians,” Singh-hallan said.
Conservative MP Pat Kelly said he objected to the very idea of the excise tax on alcohol and the automatic increase that happens each year.
“I think that the excise tax on beer, wine and spirits should be repealed outright,” he said. “It’s not right that there would be an automatic increase of any type that wouldn’t be put to a vote in the House of Commons.”
The price of beer, wine and spirits has gone up every year since 2016 because of a bill passed in 2017 that included an escalator provision that raises the tax rate each year without a need for the finance minister to put those changes forward in Parliament.
“Critics of my private member’s bill have said Canadians can afford to pay a little bit extra on something that is a discretionary spending item,” Kelly said. “To them I would say, no, this cannot become a country where the simplest middle-class pleasures become unaffordable for working Canadians.”
Liberal MP Julie Dzerowicz, who represents Toronto’s Davenport riding, said the reduced tax rate makes for a good compromise.
“In my tiny riding of 12 square kilometres I have a lot of breweries and microbreweries that are very supportive of the two per cent (tax increase),” she said. “If they can keep to the two per cent they said it’s affordable.”
The amendment recommending a two per cent tax increase were agreed upon in a 7-to-4 vote, with Conservative MPS dissenting, while the motion to recommend the reduced tax rate as amended was unanimously agreed upon.
Conservative MP Adam Chambers said “in principle” he preferred his party’s plan to remove the tax increase entirely, but said the “ultimate compromise” to reduce the tax increase to two per cent was better than nothing.