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Spirits Canada calls for Canadian government to abolish alcohol tax

Trade body Spirits Canada is calling on the Canadian government to repeal the annual automatic tax increase on spirits, wine and beer, which is set to rise again on 1 April.

Federal excise duty revenues on spirits grew by 17.8% in 2018.

Canada’s distilling industry is asking federal finance minister Bill Morneau to abolish the annual ‘escalator tax’ on spirits, wine and beer in today’s (19 March) federal budget.

Taxes on alcohol in Canada are set to rise on 1 April without a vote in parliament – the third increase in three years. Federal excise duty revenues on spirits grew by 17.8% in 2018.

Spirits Canada said that alcohol excise duties are an “antiquated and outdated tax on alcohol manufacturers whose deficiencies are compounded by a series of cascading federal and provincial liquor taxes and mark-ups that drive consumer prices higher and make domestic producers less competitive”.

In September last year, Spirits Canada launched its #NotOnMyTab campaign to repeal automatic annual increases in excise taxes on spirits, beer and wine imposed by the federal government.

“Canada already imposes amongst the very highest taxes on alcohol in the world, and, in the case of spirits, 80% of what you pay are taxes”, said Jan Westcott, president and CEO of Spirits Canada.

“Today’s escalator tax is having the same negative effect it had when Canada last experimented with it in the 1980s; sky-high prices, a freeze on investment, closed distilleries, lost jobs and Canada losing ground versus our international competitors.

“We are calling for an immediate repeal of the escalator tax as a first step in a long overdue review and reform of Canadian alcohol tax policy.”

Spirits volume sales in Canada grew by 3.2% in 2018, boosted by vodka and whisky, according to recent statistics.

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