Alberta, Canada’s NDP government targets craft breweries with 260% tax hike

Oh, Canada.

In truth, Canada’s Alberta government seems to be a proponent of building barriers, which is fairly ironic, seeing as Canada’s New West Partnership’s motto is “fewer barriers and more opportunities.” You see, the provinces of Alberta, British Columbia and Saskatchewan have the New West Partnership, which creates the largest interprovincial “barrier-free” trade and investment market in Canada (some 9 million people with a combined GDP of about $500 billion).

Unfortunately, how business (take taxes for instance) is conducted inside and outside of those provinces can vary greatly, much to the chagrin of more than a few craft brewers. Recently, the Alberta New Democratic Party (a social-democratic political party in Alberta usually just called the NDP) caused a stir with its recent budget. Basically, the governing NDP is giving big tax breaks to the craft brewers residing inside the Partnership zone and slamming brewers east of Saskatchewan (outside the Partnership zone!) with some crazy high tax hikes. We imagine some sort of Hunger Games tribunal making these decisions.

We quote the Examiner.com:

If your craft beer of choice happens to be one brewed within that area, drinkers could see a price reduction of as much as $0.50 per 6-pack, or $0.50 per pint. It’s not an overwhelming change, but it should be welcome for many drinkers. This comes via a $0.48 per litre blended tax decrease on the sale of craft beers brewed within the New West Partnership region. It’s good, but not great. However, should your craft beer of choice be brewed outside of that region, prices could increase by a great deal more. A tax of $1.25 per litre may not seem bad at first glance, but it could amount to as much as $1.50 per 6-pack, $6.00 per 24-pack. That is an overwhelming change, one that hits beer drinkers directly in their pocketbooks. Even big foreign-owned domestic brewers have come through this better than non-NWP craft breweries. The balance of these changes amounts to dragging $39 million out of the pockets of consumers.

We quote Steam Whistle Brewing Co.‘s Good Beer Folks Blog. Steam Whistle is outside of the Partnership zone:

“Why does the Alberta government want to build barriers between craft beer brethren across the country in an industry segment characterized by camaraderie and collaboration? Why would the Alberta government now treat legitimate, Canadian entrepreneurial companies as though they were import aggressors,” challenges Cam Heaps of Steam Whistle Brewing Co., “meanwhile providing minimal tax impact to the big domestic brewers who channel profits out of Alberta to foreign-owned parent companies?”

Oh, that’s another thing, craft beer reader. This represents a 260 percent increase in taxation to Canadian craft producers, while foreign-owned domestic producers like Molson and Labatt saw only $0.05/litre or a 4.2 percent tax hike in Alberta, according to the sources above. It certainly seems like the provincial raw deal. Tell us what you think below.