Reforming Ontario's Beer Tax System: A Crucial Step for Economic Growth

Reforming Ontario's Beer Tax System: A Crucial Step for Economic Growth
By Kristen Duever On Behalf of the London Chamber of Commerce

Fans of craft beer enjoy it for its diverse and unique flavours, personalized local touch; and for the sense of community that small breweries provide.

But the impact of this industry is much larger and more important to our economy than many realize. Ontario boasts over 340 craft breweries, employing 4,600 individuals, making up 80% of all brewing jobs in the province. These breweries have become magnets for the tourism sector, attracting over 5 million visitors annually. Notably, craft breweries have sprung up in every corner of Ontario, contributing a staggering $685 million to the provincial economy and bolstering thousands of jobs while investing in local communities.
And that is why we, at the London Chamber of Commerce, are in full support of the Ontario Craft Brewers' (OCB) plea for the reformation of Ontario's beer tax system.

Currently, the craft beer industry finds itself hampered by the existing provincial beer tax system, which, although can be helpful to new breweries entering the market, also has the effect of stifling growth. The unintended consequences in the tax structure have hindered the development of craft breweries over the past decade.

A recent study by the Canadian Centre for Economic Analysis (CANCEA) estimates that with the right changes, Ontario's craft beer industry could grow by a minimum of 40%, creating 1,000 new jobs, $380 million in capital investment, and generating $2.35 billion in economic activity.

For this reason, the London Chamber of Commerce joins the OCB in its call on the Government of Ontario to:

1. Replace the outdated flat microbrewery tax rate with a new consolidated, progressive beer tax that starts at lower rates for microbrewers and gradually increases to maximum rates.
2. Make the lower rate schedule available only to bricks-and-mortar breweries.
3. Eliminate the punitive 8.9 cent per can beer tax for all small brewers in Ontario.

British Columbia and Alberta have already implemented changes like these, and doing so has sparked significant growth, creating new economic benefits for both provinces. It is time that Ontario and our own craft beer industry see these benefits as well.
With these smart changes in the beer tax system, Ontario's 300+ craft breweries can keep on doing what they do best – growing and bringing in tons of economic activity, tax revenue, and of course producing more of our favourite brews. It's just what our local beverage alcohol, hospitality, and retail sectors need right now. We're urging the government to take action.