44th Parl. 1st Sess.
March 22, 2023 01:00PM
- Mar/22/23 2:59:29 p.m.
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Mr. Speaker, we have always recognized the important contributions that Canadian wine, beer and spirits producers make to the Canadian economy. It is why we cut taxes for small businesses and eliminated the excise duty on low-alcohol beer.
We will continue to be there for small businesses right across the country, even as we promote extraordinary Canadian products like Canadian wine, beer and spirits.
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- Mar/22/23 3:00:35 p.m.
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Mr. Speaker, we all recognize the important contribution that Canadian wine, beer and spirit producers make to the Canadian economy. That is why we lowered small business taxes and eliminated excise duty on low-alcohol beer.
We will always be there for our small businesses, and we will always promote the excellent quality of Canadian wine, beer and spirits.
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- Mar/22/23 7:57:54 p.m.
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moved:
That, given that,
(i) the Liberal government is increasing taxes on beer, wine and spirits by 6.3% on April 1, 2023,
(ii) this is the largest tax increase on alcohol in the last 40 years,
(iii) the heads of eight different unions representing brewery workers across the country, who are nervous about their jobs, have written to the Minister of Finance calling for a freeze to the April 1, 2023 tax increase on beer, citing "a freeze on federal beer taxes is the single most important thing you can do for our workers and their families",
(iv) this tax increase will unfairly punish Canadians already struggling with increased costs due to 40-year inflation highs, and make it harder for Canadians to enjoy a drink after a long day's work, or while relaxing with friends or celebrating with their families,
He said: It is great to finally get to this motion, which is very timely because in just a few days, the Liberal government, supported by its coalition partners in the NDP, is going to raise taxes on enjoying a nice drink after a long, hard day's work or when celebrating something with family or visiting with friends. All that is going to be even more expensive.
I am very pleased to split my time with my hon colleague from Niagara Falls.
I had a fairly lengthy speech prepared about this, but because the New Democrats, in order to cover up their shameful foot-dragging on forcing the Prime Minister's chief of staff to testify at committee in a desperate attempt to distract Canadians from what they were up to in backroom deals with their coalition partners, they have taken up a lot of time during the day. Therefore, I am actually going to cede the floor right now.
I know there is normally a question and comment period. I will not be able to stay for that, so we can move right on to the speech by my hon. colleague from Niagara Falls, who represents a lot of the hard-working grape growers and vintners, to finish with his remarks.
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Madam Speaker, I will be sharing my time with the hon. member for Abitibi—Témiscamingue.
As members know, unlike sales tax, which represents a percentage of the value of a product, the excise tax on alcohol is a fixed amount by volume as set out in the Excise Tax Act. Traditionally, that amount was occasionally reviewed and adjusted to inflation through an amendment to the act. However, since 2017, the act has included an automatic indexing formula, which means that the amount of the excise tax goes up every year based on inflation. That is why the excise tax on alcohol is going to increase by 6.3% on April 1 to reflect the high level of inflation we have seen over the past year.
Today's motion will not actually have a very big impact. We are talking about 1¢ per can of beer. This motion is not a real response to the increased inflation that is driving up the price of food in particular. This is a clear example of the populism of the Conservatives who are more interested in coming up with gimmicky slogans than they are in developing serious public policy.
Furthermore, when it comes to beer, only large breweries will benefit from the adoption of today's motion. Given that microbreweries only pay a fraction of the excise tax, they will benefit far less from a freeze on the tax rate. Of the 1,200 breweries in Canada, including the more than 300 in Quebec, only 12 pay the full amount of the excise tax on the majority of their production. Most of these 12 breweries are owned by foreign multinationals.
The decision to apply a different tax rate to microbreweries, the artisans who are passionate about agri-food living in every region, was implemented in the 2006 budget after the Bloc Québécois advocated for it for years. The Bloc Québécois has been fighting for our microbreweries for a long time. That decision would give them the opportunity to compete against the giants of the industry, whose production costs are much lower thanks to economies of scale. Since the implementation of the preferential rate, the number of microbreweries has skyrocketed and increased eightfold to our great pleasure. For a small artisanal microbrewery, indexing the amount of the excise tax might only represent a 0.1¢ or 0.2¢ increase per can. We are talking about that very small amount today. This means that when we buy a 12-pack of beer, we would pay an additional amount of just a little over 1¢.
In budget implementation Bill C‑19 from spring 2022, the Bloc Québécois managed to extend to cider and mead producers the same support that had been extended to microbreweries 15 years ago. They are now completely exempt from the excise tax. Our support for small local producers is not limited to microbreweries. Unfortunately, since the government has a very restrictive definition of cider and mead, the producers who flavour their products with berries and aromatics continue to pay the tax. That is something we really hope to see resolved in the next budget, just like the application of the tax on wine made from other fruit such as pears, blueberries or even maple, which showcases our land. They should be treated the same way as our apple cider producers.
For hard alcohol, we are talking about an increase of roughly 25¢ for a 750-millilitre bottle. Again, we are not talking about a catastrophic increase, but it adds to the overall price increases.
With respect to spirits, frankly, the Bloc Québécois would have preferred that the Conservatives propose applying to microdistilleries the model that is already in place for microbreweries and impose only a fraction of the tax that is required of the industry giants. That would have a much greater impact. It would come down to about $3 per bottle rather than the meagre 25¢ that is being discussed today, but it would apply only to our small local producers. We hope the government listens carefully to what the Bloc Québécois is saying and will take it into account in its budget next Tuesday.
Our small producers are suffering, struggling to compete with the industry giants. As I said before, they would benefit greatly from a more targeted measure. Unfortunately, that is not what today's motion proposes. It has very little impact on consumers.
On every one of their opposition days, the Conservatives come back with their mantra: We need to lower taxes, cut EI by lowering the premium rate, cut retirement income by lowering the pension contribution—which also has an impact in Quebec, because the Canada pension plan and the Quebec pension plan are harmonized. They keep coming back to the idea of eliminating pollution pricing to pander to the oil companies.
Today's motion, while not intrinsically bad, is along the same lines and does not represent a real plan to fight inflation. We are talking about 1¢ for a can of beer or 25¢ for a $40- or $50-bottle of spirits. This is not the end of the world, especially considering that alcohol represents only 4% of the average household's market basket.
Skyrocketing housing and food prices are crushing Quebeckers and Canadians, especially those living on modest or fixed incomes. Measures that address the causes and effects of inflation would be much more useful than today's motion, which will have an essentially marginal impact on consumers. However, we do recognize that it could have a greater impact on restaurant and bar owners, who have been profoundly affected by the COVID‑19 crisis.
As members are well aware, the Excise Act does not just determine the amount of the excise tax. It also determines the terms and conditions for the sale of alcohol. Along with the Importation of Intoxicating Liquors Act, it states that only the government of a province can import or distribute alcohol. Quebec or the province can delegate that responsibility to a private importer or distributor by granting them a licence, but the province holds the exclusive power to govern the importation and trade of liquor on its territory. The fact that international trade is an area of federal jurisdiction is incongruous, and I am going to talk briefly about the history behind that.
Canada's first referendum took place in 1898. In the late 19th and early 20th centuries, many Protestant churches, particularly Baptist churches, were strongly advocating for the prohibition of alcohol. These prohibitionist movements were active in the United States and English Canada, just like in Lucky Luke.
The Canadian plebiscite on the prohibition of alcohol, which was held on September 29, 1898, was on the passage of a law prohibiting the importation, production and sale of alcoholic beverages across Canada. This law on prohibition would have taken the form of an amendment to the Criminal Code.
The yes camp won by 51.2% to 48.8%. It was a tight vote, but the yes camp won. However, the referendum exposed an important cultural divide in Canada. Every province except Quebec voted yes, but opposition to prohibition in Quebec was massive: 81.2% of the population voted against it, as they did in the case of conscription. The opposition was not only massive, but it was also very acrimonious. The members from Quebec in the House of Commons stated that they could not vote for a prohibition law because their families and communities would never forgive them.
The prime minister at the time, Wilfrid Laurier, noted that there was a cultural divide between Quebec and English Canada on this issue. He felt that the federal Parliament did not have the legitimacy to legislate, which would amount to imposing the decision of the majority on the minority that wanted nothing to do with it—the French Canadians at that time—even though it had the constitutional power to do so.
I hope the government is taking notes. It must not take unilateral action, and it should tell every province and Quebec to manage their own jurisdiction. That is how it was during the first years of Confederation. Instead of introducing legislation imposing prohibition across Canada, it chose to amend the laws on the importation and trade of alcohol and leaving it up to the provinces to regulate.
That is why still today that responsibility falls to the provinces. Of course, this creates some inconsistencies, such as the ban on transporting alcohol from one province to another, which prohibits a resident of Ottawa from bringing home a bottle that he may have purchased at the liquor store in Quebec. However, the principle is interesting: If there is a difference between Quebec and Canada on a given topic, then the federal Parliament should refrain from imposing a blanket solution that applies indiscriminately from coast to coast to coast.
I hope that the government and my colleagues from English Canada are listening carefully to this history lesson. I hope they will draw from it and stop imposing the will of Canada on Quebec when there is a difference of opinion, and delegate the powers. To my colleagues, I would say, “a word to the wise”.
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- Mar/22/23 8:57:19 p.m.
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Madam Speaker, historically speaking, we have seen that the excise tax on alcohol is quite high, in general. In the early 2000s, the Bloc made a proposal to encourage new players like local craft producers and microbreweries. The idea was to reduce this tax by 10 and then increase it progressively as the microbrewery grew, increasing its sales and production. It would pay 20% of the tax, then 30% of the tax, and so on until its production levels could compete with the industry giants.
Today, we are proposing that the government do this with microdistilleries. It is a booming sector. Reduce the tax by 10 for the small players, and then raise it gradually. That would put a little more craft in our lives.
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- Mar/22/23 9:58:54 p.m.
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Mr. Speaker, I rise today to speak to our party's opposition day motion on the Liberal government's escalator tax on beer, wine and spirits. This unfair tax introduced by the government in 2017 is extremely troubling and will once again increase the cost of things that Canadians regularly consume.
This tax will not only have a major impact on consumers, but it will also harm many small businesses, including microbreweries, vineyards and other alcohol producers. It will harm restaurants, hotels and bars as well. These small businesses deserve a break after being hit so hard during the pandemic.
However, this government is determined to increase taxes on everything in an attempt to recover the money it wasted over the past eight years. On April 1, the escalator tax will increase by a staggering 6.3%. Since 2017, the tax has increased by an average of only 1% to 2% a year, but in 2023, it will be three or four times that.
That is why, in this motion, our party is calling on the government to abolish this tax and to assure Canadians that next week's budget will contain a commitment to cancelling this tax. As I mentioned earlier, it will hit small businesses the hardest. This unfair tax plan will negatively impact not only our alcohol industry, but also our tourism industry, which is still picking up the pieces after the COVID-19 pandemic.
Alcohol is taxed enough already. According to the Canadian Taxpayers Federation, taxes make up 50% of the price of beer, 65% of the price of wine and 75% of the price of spirits, on average. The heads of eight unions representing the country's brewery workers have written to the Minister of Finance asking her to freeze this tax. They are extremely concerned about job losses in their industry because of this dangerous Liberal tactic.
In a country where inflation is at a 40-year high, why does the government want to keep on hiking taxes instead of helping Canadians prosper? To make matters worse, this tax increase will take effect on April 1. What a coincidence. That is the same day the government plans to triple the carbon tax on Canadians.
Not only will the price of gas go up, but the price of alcohol will also skyrocket. That is cruel. When I spoke earlier about the effect of the carbon tax on small businesses, I did not even mention the impact it will have on alcohol producers. Their monthly expenses to run their facilities will go up, and so will their shipping costs.
How does the government think our sector can remain competitive on the national stage? I think it is very sad that the government is tying our industry's hands with such a policy. Canada produces some of the best beer, wine and spirits in the world, but they are being unfairly targeted by the Liberal government.
The Minister of Tourism continues to stand up in the House and say that this will add only 1¢ per can of beer. I do not know where he is getting his figures, but according to Beer Canada, there will be a net increase of about 10% in the price of beer in 2023.
In my riding, many small businesses have contacted my office to share their concerns about this increase. I spoke about it with a producer in my riding just this morning. Ms. Simard, owner of Verger à Ti‑Paul in Saint‑Elzéar, is very worried about her business's ability to remain competitive as April 1 approaches. Her cider business is still in the initial stages of development, and she is very frustrated with this 6.3% tax, which will slow the growth of her business considerably.
Mr. Poulin, owner of Frampton Brasse, a farm and brewery in Frampton, in the Beauce area, says that larger, older businesses like his are just as worried and frustrated by this tax.
Whether a business has been operating for one year or 20, it will have to deal with the disastrous consequences of this failed Liberal policy. These are mostly small businesses, and their products are distributed solely in the region. Consequently, this additional tax will be passed on directly to consumers, who are often the neighbours of these businesses and want to support local products.
This spend-happy, tax-happy government is preventing young entrepreneurs from achieving their dreams and owning a business. In my riding and across the country, labour availability remains a major issue. It will be much more difficult for small breweries and cideries to retain staff because of low profit margins. Companies will be forced to cut back on production time, making them less and less profitable—
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- Mar/22/23 10:33:21 p.m.
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Mr. Speaker, I would like to know what my colleague from Winnipeg North thinks of the lobbying of interest groups that want to limit alcohol consumption to two drinks per week as recommended by their research. This could have consequences for the profitability of many of the regional microbreweries and craft distilleries in our regions. I want to salute Éduc'alcool, which conducted studies and has promoted responsible consumption habits for Quebeckers consisting of two drinks a day for women and three for men, and 10 drinks per week for women and 15 for men. This approach has been adopted in Quebec and keeps our local economy going.
Will the government respect the Éduc'alcool guidelines or will it adopt those of the lobbies that essentially encourage prohibition?
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