Beer tax slated for March to be axed, for now, in Ontario

Beer lovers rejoice — prices won’t increase, for now, in Ontario.

An estimated 4.6 per cent provincial tax hike scheduled for March 1 is being axed, the provincial government announced in a press release today (Feb. 9).

The increase to the beer basic tax was set to keep up with inflation. But the Ford government said they want to keep costs down for the hospitality sector and consumers.

“Our government is constantly looking for ways to make life more affordable for Ontario families by putting more money back into their pockets,” said Premier Doug Ford.

The Ontario government had faced some criticism for not making the decision earlier. Ontario Craft Brewers president Scott Simmons spoke at the province’s pre-budget committee hearings in January asking the province to eliminate the beer can tax and reduce other taxes to stabilize the sector.

However, businesses welcomed the announcement today.

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“The Ontario Chamber of Commerce applauds the provincial government’s decision to defer the automatic beer escalator tax increase for two years,” said Ontario Chamber of Commerce president and CEO, Daniel Tisch in a statement.

“As a steadfast advocate for this policy, we are grateful to see the government provide much-needed stability for breweries and the hospitality sector as they continue to recover from the pandemic and grow.”                      

The beer basic tax and LCBO mark-up rates have been consistently stopped over the last six years, the release stated.

But the tax could still come back. This latest freeze will be in place for two years, until March 1, 2026.

In the months ahead, the government will continue to meet and consult with industry partners, beverage alcohol producers and other stakeholders to ensure a smooth, safe and stable transition to a new marketplace.

The province will also conduct a targeted review of taxes and fees on beer, wine and alcoholic beverages with the aim of promoting a more competitive marketplace for Ontario-based producers and consumers.

This tax should not be confused with the federal excise duties that are set to increase by 4.7 per cent in April 2024.

A case of 24 beers could be 20 cents more expensive, if the federal government proceeds with the increase, CJ Hélie, president of Beer Canada, has noted.

Lead photo: Tembela Bohle