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OPINION: Brace yourselves for another undemocratic tax hike

No vote. No debate. No accountability. Just higher taxes on struggling Canadians

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Ottawa is about to make life even more expensive with another tax hike.

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Prime Minister Mark Carney is hiking taxes on beer, wine and spirits again on April 1.

OPINION: Brace yourselves for another undemocratic tax hike Back to video

This year’s 2% federal alcohol tax hike will cost taxpayers an estimated $41 million.

Under the current rules, the federal alcohol tax will continue to rise each year indefinitely. That’s because the federal government imposed an automatic alcohol tax escalator in 2017, which increases taxes each year without a vote in Parliament.

No vote. No debate. No accountability. Just higher taxes on struggling Canadians.

The government shouldn’t automatically hike any taxes. If politicians want to take more money from Canadians, they should at least have the spine to vote on the tax increase.

It’s fundamentally undemocratic for politicians to dodge accountability by hiking taxes without voting on it.

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Alcohol already heavily taxed

The escalator tax has cost taxpayers about $1.6 billion since it was first imposed, according to industry experts. Every year’s tax hike compounds on the year before, locking taxpayers in a government-inflicted cycle of higher costs.

Those federal taxes are on top of taxes imposed by other levels of government, like provincial mark-ups and sales taxes.

Alcohol is already taxed so heavily that taxes from all levels of government account for about half the price that Canadians pay at the till. That means for every full beer you buy for a buddy, you’re also buying one for the taxman.

If you pay $10 for a beer at your local pub, $5 of that is going to the government. The remaining $5 has to cover the bar, the brewers, the farmers and the entire supply chain behind the pint.

Meanwhile, in the United States, taxes make up about 17% of the price. Canada’s taxes are a big reason why a 24-pack costs $20 more in Canada, on average, than in the U.S.

And we’re not just out of step with our neighbours to the south. Canadian governments slap beer with the highest taxes across the G7 and at “a rate significantly higher than in most other countries,” according to Beer Canada.

Higher alcohol taxes make life more expensive. And they hurt Canadian workers and businesses struggling to stay competitive.

“We are increasingly concerned that another automatic beer tax increase, layered on top of tariffs, rising input costs, and stagnant sales, could push some breweries to reduce production and cut jobs,” reads a letter from unionized Canadian brewery workers to the federal government. “At a time when Canadians are struggling with affordability and workers’ futures are uncertain, it is difficult to understand how another tax hike on a proudly Canadian manufacturing industry could be justified.”

Higher costs affect rural communnities

Higher costs imposed on the brewing industry ripple across communities. Restaurants, bars and pubs rely heavily on beer sales to turn a profit because of higher margins compared to food. Many Canadian farmers sell their grain to breweries.

The brewing industry buys 350,000 tonnes of malting barley and other grains from Canadian farms every year. Those farms are the lifeblood of rural communities.

Ottawa shouldn’t be piling on costs with automatic tax hikes. Carney could scrap the escalator tax tomorrow. And he should.

At the very least, Carney owes Canadians a vote in Parliament. If he wants to hike taxes on beer, wine and spirits, then he should be forced to debate the tax hike in Parliament with Canadians’ elected representatives.

Carney shouldn’t be hiding from accountability with automatic and undemocratic tax hikes.

Carson Binda is the B.C. director and Franco Terrazzano is the federal director of the Canadian Taxpayers Federation

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