There’s growing concern about a federal excise tax that will greatly impact Canada’s craft distilleries.
A campaign, called “Lift Canada’s Spirits,” is a coalition of small to large distilleries whose goal is to reduce the excise tax on the first small annual volume of spirits produced to be more in line with domestic, craft beer production.
Spokesperson for the campaign, Tyler Dyck, who is also president of the Craft Distillers Guild of B.C. and CEO of Okanagan Spirits Craft Distilleries, recently joined Shaun Haney on RealAg Radio, to give an introduction to the issue, and the result the coalition hopes for.
“Basically it comes down to asking the Canadian government to help realize parity or fairness across the border with our biggest trading partner, who has implemented a really forward thinking and progressive plan to help domestic agriculture in their own country, by decreasing the excise tax that distillers pay, on the first small amount of production of every year,” says Dyck.
The U.S. wanted to bolster their producers and encourage growth in the sector — knowing that domestic producers use almost 100 per cent local crops to make their product — their excise rate was axed to 1/7th what the Canadian rate is, says Dyck.
Dyck says that in a post-pandemic era, reducing the excise tax is a sure-fire way to stimulate true made-in-Canada, value-added production.
The other big point is that if the U.S., or other large trading partners, have something in place where they can produce, and their excise tax is far smaller than Canada’s, it allows the competitor to scale-up and get their average cost of production down, being able to aggressively attack the market, outcompeting Canada in its own market.
Craft distillers currently pay $3.81 per 750ml, while craft beer makers pay $0.02 per 750ml, says the coalition. Canadian small brewers have a tiered excise tax structure that small distillers are seeking. There are approximately 225 craft distilleries in Canada.
Hear the full conversation below: