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JAY GOLDBERG: Carney too timid by refusing to scrap Trudeau’s alcohol escalator tax

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The federal Liberals are once again putting lipstick on a pig by capping alcohol tax increases rather than scrapping them altogether.

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Last week, Prime Minister Mark Carney announced plans to extend the Trudeau government’s cap on alcohol tax increases at 2% until 2028. The cap, introduced by former finance minister Chrystia Freeland, was originally slated to expire this year.

JAY GOLDBERG: Carney too timid by refusing to scrap Trudeau’s alcohol escalator tax Back to video

Capping tax increases became necessary because the Liberals introduced an alcohol escalator tax back in 2017, which automatically hikes taxes on alcohol at the rate of inflation.

When dramatic inflation came in the aftermath of the pandemic, the Trudeau government elected to cap alcohol tax increases at 2% rather than allow taxes to go up by some 5% or 6%, with industry experts warning such tax hikes could cause significant job losses.

But the fact remains the Liberals have been hiking taxes on alcohol each and every year for nine years. That has resulted, according to Beer Canada, in a cumulative tax increase of 18.4%. That has cost Canadian consumers an additional $1.6 billion over the past nine years, according to the Canadian Taxpayers Federation.

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Simply limiting tax increases isn’t enough. That’s especially the case when you compare Canada to other countries.

Consider the difference between Canada and our neighbours to the south. Back in 2018, a study found Canadian consumers paid, on average, five times as much tax on a case of beer compared to their American counterparts. And that study was done just one year after the escalator tax was put in place. Eight years later, the numbers are surely far worse.

If Carney really wants to build “Canada Strong” and have Canada be our own best customer, as all of the taxpayer-funded television commercials keep insisting, he shouldn’t be kneecapping domestic producers by further hiking taxes. Taxes already make up roughly half of the price of beer, two-thirds of the price of wine, and three-quarters of the price of spirits. With tax rates already sky high, there’s no justification for continuing to keep the alcohol escalator tax in place.

It’s simply hurting domestic producers and is deeply unfair to Canadian consumers.

At a minimum, Carney should have put an end to the alcohol escalator tax entirely.

Even better, Carney could have adopted a plank from the Conservative campaign platform and reduced alcohol tax levels back to where they were in 2017, in addition to scrapping the escalator tax.

For those who think this issue is just about the cost of alcohol going up marginally each and every year, the issue is far bigger than that.

There’s a democratic component to wanting to see the end of the alcohol escalator tax as well.

Consider this: Is it really fair that taxes should go up automatically without our elected representatives having to stand up and cast a vote?

Most of the members of Parliament in Ottawa today weren’t even there back in 2017, when the Trudeau government first introduced the escalator tax. That includes the prime minister.

Why shouldn’t today’s MPs, many of whom weren’t even in Ottawa nine years ago, have to vote before our taxes get raised?

Today, it’s taxes on alcohol going up automatically. Tomorrow, it could be taxes on income.

Such an undemocratic tax cannot be allowed to stand.

The Carney government made a mistake by announcing a milquetoast policy change that will please virtually no-one. The escalator tax cannot be saved or justified by simply minimizing its impact. It must be scrapped in its entirety.

At a time when Canadian consumers are struggling with high living costs and Canadian producers are facing trade headwinds, Carney’s decision to save the Trudeau-era escalator tax is an unforced error that will have long-term consequences.

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JAY GOLDBERG: Carney too timid by refusing to scrap Trudeau’s alcohol escalator tax

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