The Alberta government is being urged to scrap its craft beer tax after a trade panel ruled the levy is illegal.
On Friday, a three-member panel ruled the Government of Alberta’s Small Brewers Development Program does not comply with the province’s free trade obligations under Canada’s Agreement on Internal Trade.
The tax was first introduced in 2015 and was then tweaked last year. The levy taps craft beer makers for more than one dollar per litre, but Alberta brewers are granted a rebate.
The challenge was brought forward by The Canadian Constitution Foundation and Calgary-based importer Artisan Ales.
Derek From, a lawyer for the CCF said it seems the province was just trying to squeeze out-of-province brewers to fill a budget hole. He points to internal government documents that reveal the government’s intention.
“When (Finance Minister) Joe Ceci took office he went to his officials and said, look I need to raise $85-million more in beer revenue or revenues taxing liquor,” From said. “So all this talk from Edmonton about diversifying the economy, protecting local industry, all that is a smoke screen. That is not what he instructed his staff to find.”
The tax has hurt out of province beer producers, according to Artisan Ales owner Mike Tessier.
“What I would like to see is it returned to pre-October 2015,” Tessier said. “I thought we had a fair and equitable system when there was room enough at the table for everyone to succeed. Now the government has picked winners and losers.”
Tessier said the tax has hurt both businesses and consumers.
“So we’ve gone from the least expensive craft beer market in Canada, with the greatest selection, to one of the most expensive, I think only Newfoundland (and Labrador) is more.”
A spokesman for Ceci says the finance department is reviewing the decision.