'Is there anything we can do about it? No': Waterloo Region restaurants brace for alcohol excise tax

Waterloo Region restaurants are bracing for the highest federal alcohol excise tax in 40 years.

Consumers may notice a spike in booze prices as the federal government plans to increase the escalator tax by 4.7 per cent on April 1.

It may sound like an April Fool’s Day prank, but it comes as businesses are still trying to recover from the effects of the pandemic.

“Is it a shock? No. We knew it was coming. Are we happy with it? No. Is there anything we can do about it? No. So we just have to get smart and deal with it,” said Bill Siegfried, vice president of operations at Moose Winooski’s in Kitchener.

It’s one of many restaurants that will feel the pressure of the federal government raising the tax on one of life’s pleasures. Yet, Siegfried and his team are swallowing the costs.

“Can we pass it on to our guests? Absolutely not,” he said.

That means they’ll have to cut costs elsewhere, which they’ve done before considering this tax increases annually by the rate of inflation. 

It’s why Restaurants Canada is calling for a 2 per cent cap on the increase.

“Right now, we’re at 63 per cent of operators that are barely breaking even. So they don’t really have a choice, and [many] have to pass it down to the customer,” said Max Roy, vice president of Restaurants Canada.

Earlier this month, the provincial government announced it would once again be freezing the tax built into the price of beer and wine. 

The basic beer tax and LCBO mark-up rates were set to go up by an estimated 4.6 per cent on March 1. But the province is blocking it for another two years.

Advocates are hoping the feds follow suit.

“When inflation is low between 1 and 3 per cent, that’s not too bad. But when inflation gets very high like last year and this year, it gets really costly for everyone to pay in,” Roy said.

Siegfried agrees, saying customers really start to notice the tax increases when it’s reflected on their bill. That’s why Moose Winooski’s is staying away from doing so for now.

“You can increase every price a little bit, but at the end of the day it’s the total bill and that’s where the sticker shock comes in,” said Siegfried.