Canada’s alcohol tax hike is coming & here’s what it means for Ontario

You may have heard about the alcohol tax hike in Canada, but what you may not know is how it will affect us here in Ontario.

Starting on April 1st, 2023, the federal excise tax on alcohol will rise by 6.3%. The hike will apply to all liquor including wine, beer, and spirits.

This tax is raised annually based on inflation, but this year is the largest increase that Canada has seen in 40 years.

As a result, it’s possible that you will see some prices go up at your local liquor store.

The LCBO told Curiocity in a statement that “suppliers set their own pricing and have the option to adjust their pricing up or down throughout the year in response to currency fluctuations, federal taxes or freight rate changes, or price changes by their competitors.”

“Therefore, any retail price increases are on a product-by-product basis and determined by beverage alcohol producers.”

This means that some alcohol brands may choose to adjust their pricing, while others may absorb the cost to keep their prices down.

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Some organizations are speaking out against the alcohol tax hike in Canada, saying that businesses and consumers are already facing enough financial hardship as it is.

Beer Canada is encouraging Canadians to contact their local MP about freezing the tax hike.

“At 46%, almost half of beer’s retail price are taxes today in Canada, the highest rate in the G7,” said Beer Canada on Twitter.

“Many Canadians are counting their pennies in the face of increases in their cost-of-living not experienced in decades.”

“What we are forecasting is if this goes ahead, the price of a 12 pack in Ontario, given everything going on, would go up about [10%],” said the President of Beer Canada, CJ Hélie, to CTV News.

Restaurants Canada is also voicing its concerns, saying that the hospitality industry can’t afford a “hit of $750 million” as a result of the hike.

The organization is asking the feds to freeze the tax at its current rate to “avoid adding to the financial burdens of the foodservice and hospitality industry and mitigate the risk of losing more Canadian businesses.”

There you have it, Ontario — don’t be surprised if you have to shell out some more cash on your liquor run this spring.