Sawdust City Brewing Company

As the voice of craft beer in Ontario, OCB President Scott Simmons presented on behalf of the sector to the Standing Committee on Finance and Economic Affairs pre-budget hearings in Oakville this afternoon. Our recommendations built on the success of the Association’s advocacy and our Keep Craft Beer Local campaign that resulted in the Minister of Finance committing to review beer taxes, fees and mark-ups including the 8.9 cent beer can tax with the goal of a more competitive tax structure that encourages growth for Ontario-based producers. This was an important step, but our message was clear - action is needed now and that it is critical that tax changes that begin lowering craft brewery taxes, including eliminating the 9 cent beer can tax, are included in the upcoming spring budget to help stabilize the sector as longer term tax reform is finalized that will unleash the next decade of the craft beer’s growth in Ontario. We highlighted locally-owned breweries have watched profitability disappear in the last few years due to skyrocketing input costs like hops and aluminum cans, beer volume decline as bars and restaurants closed during the pandemic never reopen, and debt burdens soaring due to unrelenting interest rate hikes. As a result, they have been forced to close their doors at an alarming rate. And the kicker is that Ontario has the highest craft beer taxes in Canada which means breweries cannot absorb these increases which makes it so critical they are addressed. The OCB outlined three effective ways to cut craft brewery taxes and help seize this huge opportunity to make this important sector bigger and stronger than ever. Specifically:   1) Immediately remove the punitive and outdated 9 cent beer can tax. It's been around for 30+ years, and is essentially a tax on craft beer as not charged on other drinks or glass bottles. It is separate to the deposit paid by consumers. This tax needs to go. It does nothing to improve recycling efforts and, has a large negative impact on local producers.   2) Eliminate the triple indexing of tax increases imposed on Ontario’s craft brewers. The way the system works now means the effective rate of any tax increase for craft brewers is 2-3X higher than for the large brewers. It has cost our industry a whopping $68 million in extra taxes over the last 10 years.   3) Work with OCB on a restructured and more progressive basic tax structure that incentivizes growth for bricks-and-mortar craft brewers of all sizes as the current model is cumbersome, complicated, unfair to the smallest brewers, and full of red tape. This year will be a pivotal moment for Ontario’s economy and the Ontario-made craft beer which contributes thousands of excellent jobs, capital investment, and economic benefit. We look forward to working with government to finalize these changes and build a bright future for Ontario craft beer and Ontario itself.