• Local Business Organizations Call for a Freeze on the Alcohol Excise Escalator Tax

    The London Chamber of Commerce, in partnership with the Old East Village BIA, Hyde Park BIA, Downtown London BIA, Hamilton Road BIA, Tourism London, and the London Economic Development Corporation, are advocating for a freeze to the annual excise duty rate increase that is applied to beer, wine, and spirit sales. An increase to the current tax would be unreasonable given the circumstances, unsustainable for Canadians, and hurts sectors of the economy that are still recovering from the impacts of the pandemic. 

     

    Every year in April, the excise duty rate that is applied to beer, wine, and spirits is increased based on the consumer price index. The consumer price index tracks the cost of goods and how they fluctuate due to inflation. This means that as inflation increases in Canada, the excise duty rate increases without needing approval from parliament. In the past, this increase has been manageable and has ranged from a 1.0-2.4% increase annually however, we are currently experiencing significantly higher than usual inflation which will see the excise duty rate increase to between 5.9-6.5%. This increase would be unprecedented and simply unsustainable for businesses that are already dealing with some of the highest alcohol prices in the world. It is estimated that this would cost alcohol producers an additional $130 million in additional taxes by 2023. This would not only affect alcohol producers, but also the hospitality and tourism sectors as well as individual consumers.

     

    By freezing this tax, both consumers and producers will be able to continue supporting each other in a time where groceries are already becoming more expensive for Canadians. Furthermore, we will not be adding stress to our still struggling economy. 

     

    To read the Chamber’s letter to the Finance Minister on this issue, click here.

     
    Read full letter here. Click Here