Governments are at times accused of taxing people to death – sometimes rightly, sometimes unfairly. But it boggles the mind why one might add layers of taxation to an industry to the point of crippling it.
Many businesses will complain about tax burden, but in the case of the brewing industry the federal government seems intent on overdoing it.
The federal government plans to raise the excise tax on alcohol products every year, and beer company owners say all that will do is result in consumers continually paying more, and leaving the industry investing less in their businesses and less able to hire employees.
Had this sector been one of those lucky ones to enjoy relatively modest taxes – or entitled to the jackpot of payroll tax rebates, like some of those out there getting favourable treatment – a hike might be justifiable.
So, when Canadian consumers purchase a pack of suds, how much of the price goes to taxes? It’s already at about 47 per cent, according to trade association Beer Canada, once all the federal, provincial and municipal levies are added.
This new tax would mean annually adjusting the tax by tying it to the consumer price index, allowing it to flow upward with annual inflationary adjustments. So in addition to other taxes, the industry – and consumers – can expect this yearly increase.
Beer Canada officially launched a campaign Monday asking suds-loving Canadians to sign a petition requesting that Finance Minister Bill Morneau axe the escalating beer tax. The petition, which the group started sharing several weeks ago via its social media channels, collected 15,400 signatures as of Tuesday morning, according to the association.
The major breweries in Canada have already been struggling against a trend of slackening consumption of beer. At the same time, the smaller craft breweries in recent years have been able to tell a success story in the realm of Canadian entrepreneurship as one area seeing growth in sales.
This new tax represents a burden to them all. And like most businesses operating anywhere, they already have to anticipate continually increasing costs for energy, ingredients, materials and labour.
Did governments ever hear about the proverbial straw that broke the camel’s back? Do they understand that persistently adding burden could one day prove too much, and that when a business folds, there goes yet another operation that would otherwise be adding to the economy and government coffers?
It’s funny, and not in a ha, ha way, that with the impending legalization of marijuana, politicians have said they don’t see it as a moneymaker. They can’t over-tax the product and push prices up or else the legal product won’t be able to compete with the black market – the purported main intent behind legalizing.
Given the assault on the brewing industry with tax upon tax, how many out there believe what the government says about legal recreational drugs? It’ll be déjà vu all over again, then we’ll have to pretend to wonder why the plan isn’t working.
Home brewers and moonshiners, here’s your cue.