Federal tax on alcohol going up 6.3% on April 1

Liquor shelves can be seen in this CTV News file photo.

Consumers will have to pay a little more next month for beer, wine and spirits as the federal excise tax goes up 6.3 per cent on April 1. It’s an annual tax adjustment based on the inflation rate.

The hike is unusually high this year with calls from the industry for a tax freeze.

“A few years ago, they indexed it to inflation so of course when inflation is high, the tax is set to go up quite a bit,” said Mark Heise with Rebellion Brewing.

Last year, the tax went up 2.4 per cent. This year it will be 6.3 per cent and 18 per cent overall since the federal government tied excise tax increase to the inflation rate in 2017.

“Fifty per cent tax. The price you pay for a bottle of wine, 65 per cent is tax and the price you pay for the harder alcohols like vodka or whiskey or rum is more than three quarters tax,” said Franco Terrazzano with the Canadian Taxpayers Federation.

Brewers feel the increases have to stop.

“We probably pay $20,000 to $25,000 a year in federal excise so we’d be paying another 6 per cent on top of that so you know, 12 or 1,500 bucks. It’s not going to put us out of business but it’s just one more, you know, death by a thousand cuts,” Heise said.

Saskatchewan Liquor and Gaming says it’s aware of the federal excise tax increase and will be adjusting the wholesale price of alcohol accordingly. From there, it will be up to private liquor retailers to decide if they will pass along the added cost to consumers.