Feds announce 2% cap on alcohol excise tax for two more years

TORONTO — Finance Minister Chrystia Freeland says the federal government will cap the annual alcohol excise tax increase on beer, spirits and wine at two per cent for an additional two years.

The alcohol excise tax had been set to rise on April 1 by 4.7 per cent, tied to inflation, but Freeland announced Saturday that the increase is being capped at the lower rate.

She also announced some tax relief for local craft breweries by cutting the excise duty rate on the first 15,000 hectolitres of beer in half for two years.

She says Canada's small craft brewers are among the finest in the world and are an important contributor to the economy.

Restaurants Canada is applauding the move, saying the financial relief will give operators a chance to catch their breath as they try to cope with inflation and bounce back from the COVID-19 pandemic.

The Canadian Taxpayers Federation says it is good to see some relief, but the government shouldn't be raising alcohol taxes at all.

Earlier this week, The Beer Store started warning customers to brace for the biggest price hike in four decades.

The Canadian Press