Ontario to forgo $11M when Tories cancel planned beer tax hike
The Ontario government is cancelling a scheduled increase in the provincial beer tax that was set to kick in next month, a move that will see the province forgo $11 million in potential revenue.
The Progressive Conservatives said Friday that the three cent per litre increase was planned by the previous Liberal regime and would be scrapped.
“This is just one more tax hike that was due,” Finance Minister Vic Fedeli said in an interview. “We look at every single opportunity to rein in the taxes. From the largest possible, the cap-and-trade tax, all the way through to the beer tax.”
The government said beer taxes had increased by three cents per litre each year since 2015. Beer and wine taxes brought in revenues of roughly $589 million in 2016-17.
The halting of this year’s increase, which was set to take effect Nov. 1, will mean Ontario’s treasury will forgo $11 million in potential revenue that would have come in between November and the end of the fiscal year in March 2019, the government said.
The move comes as the government
has said it faces a challenge to deal with the province’s deficit and debt. Fedeli noted that tax increases aren’t part of the government’s strategy, saying debt and deficit would be tackled through “efficiencies.”
The government is reviewing the province’s approach to beer and wine sales, including the possible expansion of sales into corner and big box stores.
Fedeli said the government was still looking at that possible expansion, but didn’t have a timeline for when a report on the matter would be released.
“It’s a monumental task,” he said. “There’s a lot of information gathering … We want to provide more access and we want to do it right.”
Green Party leader Mike Schreiner said the Ford government was “obsessed” with beer-related policies.
“How many new teachers or nurses could have been hired with this beer tax revenue?” he said in a statement. “The average Ontarian won’t notice a one cent difference on beer, but they will notice the declining state of our hospitals and schools as the premier follows through with his austerity plans.”
Earlier this year, the government brought back so-called buck-abeer to the province.
The policy implemented this summer lowers the minimum price of a bottle or can of beer to $1 from $1.25. Brewers aren’t required to charge less and the minimum price doesn’t apply to draft beer, nor does it include the bottle deposit.
Businesses were offered prime spots in LCBO stores and advertising in the store magazine’s inserts as incentives for selling their beer for $1.
Cool Brewery in Toronto and Barley Days Brewery in Picton have said they ’ll offer lower-priced brews, while Loblaws offered its President’s Choice beer for $1 a bottle for a limited time.