A tax that’s tough to swallow: Cost of alcohol going up

It’s probably not something you want to hear, but prepare for the cost of alcohol to jump this year.

A federal escalator tax on beer, wine and spirits is set to increase prices by 6.3 per cent.

It will take effect in April and places like Dixon’s Distilled Spirits in Guelph feel like they can’t catch a break given the current rate of inflation too.

“There's a point where this business isn't feasible to keep running or we pass all those costs back down,” said Jeremy Dixon (JD), the distillery’s owner.

This excise tax has been tied to the rate of inflation in Canada since 2017. Last year’s hike was just 2.4 per cent. The overall increase since its introduction has been 18.42 per cent.

At Innocente Brewing in Waterloo, they aren’t overflowed with concern.

Owner Steve Innocente showed CTV a graph that breaks down what he’s taxed on. In a pie chart, the federal excise tax only takes up a small sliver compared to the provincial taxes.

Owner Steve Innocente from Innocente Brewing in Waterloo breaks down what he’s taxed on. (CTV News/Spencer Turcotte)

“When it breaks down to the cost per can of beer it's very, very miniscule. We're talking 1.7 cents if I round up,” said Innocente.

Although, staff at the microbrewery aren’t thrilled because it’s still an added cost.

“They do need to stop taxing us up the Yin-Yang,” said Innocente.

As for distilleries, it seems like taxes are resulting in more salted wounds than salted rims.

“Beer is 50 per cent tax. The price you pay for a bottle of wine, about 65 per cent is tax. And the price you pay for the harder alcohols like vodka, whiskey or rum is more than 3/4 tax,” said Franco Terrazzano, federal director of the Canadian Taxpayers Federation.

JD explained about 80 per cent of every bottle at his distillery sells is taxed.

So while there’s often a price to pay for drinking too much, soon enough you’ll feel the hit, even if you do savour every sip.