\u201cIt\u2019s a bit of a mixed emotion, to be honest.\u201d<\/p>\n
That was Ken Beattie, the executive director of the BC Craft Brewers Guild\u2019s reaction in response to the federal government\u2019s announcement of a two-year extension of alcohol excise duty relief. This was announced on April 2 at Barnside Brewing in Delta by Jill McKnight, the Minister of Veterans Affairs and Associate Minister of National Defence.<\/p>\n
The purpose of the relief is to protect breweries, distilleries, and winemakers \u201cduring a period of global uncertainty.\u201d<\/p>\n
Secretary of State (Defence Procurement) and Kelowna MP Stephen Fuhr said the relief was created in 2023 and has been extended a couple of times now.<\/p>\n
\u201cWe\u2019ve had a lot of different breweries and wineries and distilleries reach out to the office and talk about them being worried about this going, being connected to inflation with all this uncertainty with what\u2019s going on down in the U.S. and globally,\u201d said Fuhr. \u201cEverything\u2019s a bit of a shambles right now, so\u2026 renewing the cap is adding a little bit of certainty to what they can expect.\u201d<\/p>\n
In the announcement, the government said the annual inflation adjustment on beer, spirits, and wine excise duties will remain capped at two per cent, while the excise duty rate on the first 15,000 hectolitres of beer brewed in Canada is set at one per cent.<\/p>\n
Fuhr added that, ironically, inflation as of February was down to 1.8 per cent, below the capped two per cent.<\/p>\n
\u201cDespite all the challenges, and there are many\u2026 the government\u2019s doing a pretty decent job of keeping inflation under control, given our biggest trading partner south of the border is moving in the opposite direction,\u201d said Fuhr, adding America\u2019s inflation rate in February was 3.2 per cent. \u201cOftentimes, we\u2019re very connected to them and when something happens there, it translates up here, so that cap added some certainty to an uncertain time.\u201d<\/p>\n
Beattie told Black Press Media that the announcement was \u201ca sign of relief\u201d and \u201ca step in the right direction,\u201d but it doesn\u2019t meet what the Canadian Craft Brewers Association (CCBA) has been asking for.<\/p>\n
\u201cUntil about 48 hours prior to the announcement, we thought they were going to roll back the exemption, which is 50 per cent on the first 15,000 hectolitres, anywhere between $2,000 and $90,000 for members,\u201d said Beattie. \u201cBut it\u2019s kind of bittersweet, [it was a] step in the right direction to extend it but, it wasn\u2019t what the Canadian Craft Brewers Association and all our members were looking for.\u201d<\/p>\n
Beattie explained that at the end of the day, it\u2019s still a two per cent increase.<\/p>\n
\u201cWe\u2019ve asked the federal government, now going on three years, to re-look at the entire system and offer a 50 per cent reduction on all volume under 500,000 hectolitres, that\u2019s what our ask has been,\u201d said Beattie. \u201cWe didn\u2019t get that, but it\u2019s definitely a step in the good direction because we\u2019re just getting hammered with taxes and fees and everything else, cost of goods and everything else that\u2019s going on in the world.\u201d<\/p>\n
While Fuhr didn\u2019t have specific numbers for Kelowna, he said the tax relief will total $33 million for breweries, wineries, and distilleries across the country.<\/p>\n
\u201cI think in the long run, we\u2019re going to come out a little better than we went in,\u201d said Fuhr. \u201cIt\u2019s just going to be a little uncertainty in the interim period. And this cap on the excise tax for this very specific niche market, compared to everything else, is going to be helpful.\u201d<\/p>\n
On a provincial level<\/p>\n
In Canada, the beer tax is on average about 46 per cent of the retail price, said Beattie.<\/p>\n
\u201cWhat people may not understand is we get charged PST, we get charged GST, we get charged excise, we get charged container recycling fees in provincial sales markups that are aggressive,\u201d Beattie explained, mentioning the proposal the BC Craft Brewers Guild announced on July 31, 2025.<\/a><\/p>\n \u201cWe can\u2019t really continue to raise our prices, even though our costs of goods have gone up over 30 per cent in the last three years,\u201d added Beattie. \u201cWe\u2019re at a point where we can\u2019t be selling four beers for $25. The market demands what the market demands and we\u2019re conscious of that, obviously\u2026 it\u2019s a real struggle\u2026 we\u2019re not asking the governments, either federally or provincially, to bail us out. All we\u2019re asking is don\u2019t take as much money from us as you are currently.\u201d<\/p>\n Beattie called the 46 per cent beer tax and a capped two per cent every year on April Fool\u2019s Day \u201cexcessive\u201d.<\/p>\n B.C. Premier David Eby was in the Central Okanagan on April 8 and 9. When asked about what the provincial government is doing to help the local alcohol scene, in relation to the federal government\u2019s alcohol excise duty relief, he connected tourism to the industry.<\/p>\n \u201cI think here in the Okanagan, one of the key parts of tourism is obviously the wine industry, but increasingly craft beers and distilleries that are also participating in this,\u201d said Eby. \u201cOur minister responsible for liquor is also working with craft distillers, with brewers, and with wineries to find ways to increase tourism, increase flow through their businesses, and address concerns that they have about structures related to taxes at the provincial level. We want to encourage growth, we want to encourage opportunity.\u201d<\/p>\n Eby added a \u201ccrucial area\u201d for the alcohol industry is inter-provincial trade.<\/p>\n \u201cWe have been very, very frustrated by the gap between public statements by premiers across the country about their desire for free trade between provinces and the actions on the ground, especially when it comes to the availability of B.C. wines in places like Ontario and Quebec,\u201d said Eby, adding Ontario banned California wines from their shelves. \u201cThere\u2019s lots of space\u2026 we\u2019re ready to go. We\u2019re ready to welcome Ontario wines into British Columbia, just like we did with Alberta, addressing their concerns, opening up that market to B.C. wines.\u201d<\/p>\n \u201cLet\u2019s get on it, and I think that would be a very meaningful and significant change and an opportunity for distilleries, breweries, and wineries in British Columbia,\u201d added Eby.<\/p>\n The big dogs, the newbies, coming and going, expansion, innovation<\/p>\n In response to the alcohol relief, Beattie said the smaller breweries benefit more than the regional ones, adding about 60 per cent of them make more than 15,000 hectolitres.<\/p>\n \u201cThey don\u2019t really benefit,\u201d said Beattie. \u201cThere\u2019s no material benefit overall to them because they\u2019re far exceeded, by the time April 1st comes around, they\u2019ve done 15,000 hectolitres.\u201d<\/p>\n Meanwhile, Beattie guessed the average brewery in the Central Okanagan will save between $2,000 and $2,500 from the relief.<\/p>\n While larger, more regional breweries don\u2019t necessarily benefit, those are the \u201cengines\u201d of the industry, Beattie said, specifically mentioning Phillips Brewing in Victoria and Parallel 49 out of Vancouver.<\/p>\n \u201cThey\u2019re investing and trying to grow their business all the time,\u201d said Beattie, adding that these breweries employ more than 100 people. \u201cThey\u2019re of a size that they can diversify into non-alcoholic and other things, and maybe spirits in some cases, refreshment beverages. A small [brewery] can\u2019t do that because they don\u2019t have the money because everything costs too much to install the equipment.\u201d<\/p>\n Regionally, Kelowna\u2019s BNA Brewing expanded to Penticton<\/a> and Vernon<\/a>, which Beattie called a \u201creally good success story.\u201d<\/p>\n Despite challenges, Beattie is very happy to still see new breweries opening, mentioning Cutwater Brewing in Lake Country<\/a> and Revystoked Brewing in Revelstoke<\/a>.<\/p>\n So far this season, the number of breweries in B.C. opening compared to ones closing is about even, added Beattie, but it comes with some worry.<\/p>\n \u201cWe have seen some of the bigger breweries [close] and that\u2019s more of a concern,\u201d said Beattie. \u201cA legacy brewery like Lighthouse in Victoria<\/a> closing, that\u2019s concerning.\u201d<\/p>\n On the other side, some breweries have been able to expand from their original location to other parts of the province, which is a good thing, added Beattie.<\/p>\n On top of BNA, some others include Britannia Brewing expanding from Steveston to Ladner and Lake Country, and Yellow Dog Brewing expanding from Port Moody to Penticton.<\/p>\n In relation to expansion, Beattie said a cost for breweries that the public might not realize is distribution across the province.<\/p>\n \u201cThe cost of getting product around this province is incredibly expensive, particularly beer, which is very heavy and awkward to move,\u201d said Beattie. \u201cPeople are looking for distribution changes. Breweries in the Lower Mainland move into the Interior, and there\u2019s lots of opportunity and some action where people are working in the other way around.\u201d<\/p>\n Collaboration is growing between breweries as well, with breweries that are closing finding ways to keep their brands alive.<\/p>\n