Canada _ (Commonwealth Union) _ You may be excused for drinking considering the sky-high inflation rate, rising interest rates, and rising carbon tax. However, by exploiting strong inflation to gorge on increased booze taxes, Prime Minister Justin Trudeau is throwing margarita salt in the wound. The taxes you pay when you purchase a bottle of wine, a case of beer, or a shot of rum will increase by 6.3% in 2023 under the Trudeau administration.
But even a 6.3% tax increase understates the whole tax burden you bear every time you buy alcohol. About 50% of the cost of beer, 65% of the cost of wine, and more than 75% of the cost of alcoholic beverages are already attributable to taxes. If you choose two wine bottles, a 24-pack of beer, and a 26-ounce bottle of whiskey, your total cost will be around $125. Of that bill, you’re paying taxes alone in excess of $76.
Canadians actually pay so much tax that buying a case of beer on your way to a party on Prince Edward Island would cost you more in taxes than the total retail cost of a case of beer in 25 American states. Canadians are paying more in taxes while Americans are getting tax breaks. Federal beer taxes increased by $34 million for major brewers in Canada from 2017 to 2019, whereas they decreased by $31 million for breweries south of the border.
Since the 2017 budget, the federal government has begun slashing alcohol tax rates. In that year, the Trudeau administration instituted an automatic tax increase escalator. Accordingly, the federal excise tax will automatically rise on April 1 of each year in line with inflation. Canadians will see a tax increase of 6.3% in 2023 as a result of inflation hitting a nearly 40-year high.
Due to decreased inflation, there wasn’t much of a stir when the escalator tax was originally implemented in 2017. But over time, even minor tax increases can add up to large sums of money. The automatic yearly tax rise that was initially implemented in 2017 would result in an increase in alcohol excise taxes for the federal government of 18.4% after the tax increase in 2023.
