Canada is one of the countries with the highest taxes on spirits, and it's still rising. Taxes on alcohol are excise taxes, which are taxes levied on the producers instead of the consumers. Though this has the effect of raising the price of the good, it also punishes producers.
The excise tax on spirits in Canada has increased three times in three years, increasing by 17.8% last year alone.
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TL;DR Spirit and brewing companies are calling for an end to the "escalator tax," saying that it limits companies and makes them less competitive. Parliament has two weeks to vote on the tax, which will otherwise increase automatically.
Canadian spirits producers are calling for an end to this "escalator tax," saying that it the excise tax limits Canadian producers by making them less competitive.
The campaign, called #notonmytab by spirit companies and #axethebeertax by brewers, is raising awareness about the high taxes on alcohol in Canada.
Jan Westcott, President & CEO of Spirits Canada, a group that represents Canadian spirits manufacturers, says that Canada already has some of the highest taxes in the world.
We love Canada and all its hard-working, fun-loving people. What we don't love is that Canada's #beer#taxes are 5x higher than those in the United States. This #CanadaDay help us #axethebeertax at https://t.co/AAjF2XLurt#cdnbeer#cdnecon#cdntaxpic.twitter.com/i0bSYnnQVh
He goes on to say that, when it comes to spirit, 80% of what you pay is taxes.
To give you some context, this is how much spirits would cost without an 80% tax:
- Belvedere vodka: $9.60
- Jose Cuervo Especial tequila: $7.05
- Bombay Saphire 1.14L gin: $8.05
- Bacardi Superior 1.14L rum: $6.60
Excise taxes drive consumer prices up and make producers less competitive. Not to mention that spirits companies get almost 100% of their grain from Canadian farmers, which provides "a valuable and stable customer base for generations of farmers' highest-grade barley, corn, rye and wheat. "
Parliament has until April 1 to vote on ending the tax, which will otherwise automatically increase.