Ontario craft brewers say they face higher taxes than anywhere in the country, call for change

A group of craft breweries in Ontario is calling on the provincial government to revise its beer tax system sobreweries can afford to stay local.

Craft brewers in Ontarioface higher taxes than anywhere else in the country,said Troy Burtch, senior manager of sales and business development at Great Lakes Brewery in Etobicoke.

Ifno changes are made to the tax structure, he and the Ontario Craft Brewers Association, say they fear more and more of Ontario's craft breweries will be bought up and merged with foreign buyers. The association says it represents over 100 breweries.

"We're being taxed too much compared to the rest of Canada," Burtch told CBC Toronto. "What we would like to see at the end of the day is just a fairness when it comes to looking across the country."

In Ontario, taxes for breweries include a basic beer tax (39.5 cents per litre), a beer volume tax (17.6 cents per litre), and, when applicable, an environmental tax (8.93 cents for each non-refillable container used to package beer) regardless of the size of the brewery.

Other provinces, including Alberta and British Columbia, have moved to a tiered tax structure that adjusts to the size of the brewery and how much beer it produces. The result is that Ontario craft breweries are paying hundreds of thousands of dollars more than their counterparts in other parts of the country, Burtch said.

With costs rising, depending on the brewery, consumers end up eating that additional cost some of the time, Burtch acknowledged.

"It's time that we let consumers along with politicians know that taxation for small independent craft brewers is starting to really hurt us," he said.

Province has cancelled recent tax increases

In a statement to CBC Toronto, Ontario's Ministry of Finance said,"The government is committed to increasing choice and convenience for consumers and providing support for businesses."

The statement added that the province paused a scheduled beer tax increase put in place by the previous government, cancelled an increase in 2018 that would have increased rates by three cents per litreand delayed resuming annual increases earlier this year.

But Mandie Murphy, a board member at the Ontario Craft Brewers Association and co-founder of Toronto's Left Field Brewery, says that's still not good enough to maintain a healthy industry.

"The future of craft beer in Ontario is really under threat due to the extraordinarily high taxes that we pay and the way that our taxes are structured," she told CBC Toronto.

That structure makes it difficult for craft breweries to competenot only with breweries from other parts of the country,but also with foreign multinational companies, she said.

Murphy also feels there's more at risk than just the beer.

"Breweries across Ontario have really become a place where people gather," she said. "You know where your beer is made. You know the ingredients that it's made with. You know where those ingredients came from. You're able to see the beer being made. That's what's different with craft beer, is that it is local."

Burtch saidthe current provincial governmenthas done a lot for the industry, including expanding the allowed hours of operation and allowing home deliveries. But he adds he'd like to see that support continue when it comes to taxes.

Shehan De Silva, a partner at Toronto's Lost Craft Beer brewery, told CBC Toronto it's to the government's benefit to support craft breweries, especially as job creators.

"If breweries start closing, those numbers go down. Less employment [means] less economic activity in general that will then also impact government revenue," he said.