Ottawa will increase federal alcohol excise taxes by 2% on April 1, prompting fresh backlash from taxpayer advocates and industry groups who warn the automatic hike will drive up prices and threaten jobs.The Canadian Taxpayers Federation is calling on Prime Minister Mark Carney to scrap the increase immediately, arguing Canadians can ill afford another hit to their wallets.“Canadians are struggling with the cost of everything and Carney shouldn’t make taxpayers pay more for a cold one,” said Franco Terrazzano, the CTF’s federal director. “Instead of making life even harder for brewers, distillers, pubs and restaurants, the federal government should cut taxes to make Canadian businesses more competitive. Carney needs to cancel this alcohol tax hike now.”The 2% increase flows from the so-called escalator tax first introduced in the 2017 federal budget, which automatically raises excise duties on beer, wine and spirits annually without a vote in Parliament.Industry estimates suggest this year’s increase will cost taxpayers roughly $41 million in 2026-27 alone. Since its introduction, the escalator tax has cost Canadians an estimated $1.6 billion..Unionized brewery workers have also raised alarms, warning the cumulative impact of higher taxes, tariffs, rising input costs and flat sales could force producers to scale back.“We are increasingly concerned that another automatic beer tax increase, layered on top of tariffs, rising input costs, and stagnant sales, could push some breweries to reduce production and cut jobs,” workers wrote in a letter to the federal government. “At a time when Canadians are struggling with affordability and workers’ futures are uncertain, it is difficult to understand how another tax hike on a proudly Canadian manufacturing industry could be justified.”According to industry data, taxes from federal, provincial and municipal governments already account for about half of the retail price of alcohol in Canada.“Automatic tax hikes are undemocratic, uncompetitive and unaffordable and they need to stop,” Terrazzano said. “If politicians think Canadians aren’t paying enough tax, they should at least have the spine to vote on the tax increase.”
