The second wave of the COVID-19 pandemic has made it even more difficult for bars and restaurants, tourism and hospitality, and small businesses to keep their doors open.
Finding ways to provide financial relief and protect jobs will be essential to Canada’s economic recovery. For Canadians, every dollar kept in their pockets counts. For our workforce, every job matters.
This is why hundreds of businesses across Canada’s hospitality, tourism and agriculture sectors have joined together to call on governments across Canada to put a freeze on beer taxes. This will help stimulate our economic recovery and protect the 149,000 Canadian jobs and thousands of businesses that depend on beer sales.
Bars and restaurants rely heavily on beer sales, and raising taxes only adds to the burden they face. To help the industry recover, governments need to get creative in finding ways to provide relief. Restaurants are not only the cornerstone of many communities across Canada, they’re also closely tied to several different areas within our economy — beer being one of them.
In the first wave of the pandemic, bar and restaurant beer sales dropped by 90 per cent in many provinces and currently remain 50 per cent below normal levels. With COVID-19’s second wave making the situation even more challenging for the foodservice industry and the 1.2 million women and men it employs, every small step governments can take to help keep a local business open and protect jobs is a win for everybody: the business owner, their employees, their customers and their communities.
“The relief governments are already providing is critical to ensuring bars and restaurants have a fighting chance at recovery. But raising taxes, especially taxes on products like beer that account for a significant portion of our sales, is taking a step backwards and is harmful to everyone connected to making, selling and serving beer,” says Larry Issacs, President of the Firkin Group of Pubs. “Simply put, freezing beer taxes is a small but important measure to support restaurants during this devastating time.”
In Canada, 85% of the beer consumed here is made here. It’s by-and-large a local industry with small brewers and larger producers making significant contributions to Canada’s GDP. Yet tax is the single largest component of Canadian beer prices. Almost half the price of beer in Canada — 47 per cent — is government tax, a commodity tax rate five times higher than the U.S. and significantly higher than most EU countries.
In fact, consumers and licensees in many Canadian provinces pay more in tax than most U.S. consumers pay for beer.
And beer taxes continue to increase — in some cases automatically — every year. Since the federal government introduced an automatic alcohol escalator tax in 2017, federal beer taxes have gone up four times, most recently on April 1 of this year at the onset of the pandemic. They’re scheduled to go up again on April 1, 2021.
Moreover, prior to the pandemic, average provincial beer tax loads were increasing about double the rate of inflation.
Increasing beer taxes more, especially during this time of economic uncertainty, does not just affect Canadian brewers – it impacts the thousands of Canadians and businesses connected to beer. Servers at bars and restaurants. Barley farmers. Maltsters. Can and bottle manufacturers. Delivery women and men. Beer and liquor store employees. Tourism and hospitality professionals. Small business owners. And the 15,000 Canadians who work in Canada’s 1,110 breweries.
With the support of a growing number of partners representing industries and sectors across Canada, Beer Canada is leading Freeze it for Them – a campaign in support of the millions of Canadians who enjoy beer and the thousands of women and men working in areas supported by beer, some hit hardest by the pandemic.
To support our collective economic recovery, protect and create jobs, and provide relief to Canadians who need it, we are calling on governments across the country to #FreezeItForThem.
To learn more, visit www.freezeitforthem.ca and sign our pledge to show your support. It will go a long way in ensuring a prosperous future for Canadians coast-to-coast.
Dana Miller is the director of communications and engagement for Beer Canada.
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