Alcoholic beverages to get more expansive in Canada

If popping open a cold one sounds like your idea of fun, watch out since the cost of alcohol in Canada is expected to increase in 2023.Beer, wine, and spirit taxes are raised yearly, and the percentage increase is determined by changes in the Consumer Price Index.

There are negative developments in light of Canada’s record-breaking inflation rate over the previous year.The most recent federal alcohol tax increase will take effect on April 1, and in accordance with numerous reports, the tax on beer, wine, and spirits will rise by an astounding 6.3%.

According to Restaurants Canada, this is the biggest hike in beverage alcohol taxes Canada has witnessed in the last 40 years.

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Tax on booze will rise by 6.3% in April

Liquor in Canada will cost 6.3% higher on April 1st, 2023, as a result of a federal government tax increase on alcohol. The rise is due to the yearly escalator excise tax that was put into place in 2017. The federal government can automatically increase alcohol tax rates in reaction to inflation thanks to the escalator tax.

Speaking of which, the inflation rate in Canada reached a 39-year high in June 2022 and hasn’t really decreased since. Consumer finances are still under stress as a result of the nation’s high cost of goods and services. Also, trips to the liquor store will soon cost more due to the increase in the alcohol tax.

According to Statistics Canada, Canadians of legal drinking age spent $837 on alcohol on average between April 2020 and March 2021. According to this information, the average Canadian may anticipate paying $52.73 more per year for alcohol once the new alcohol tax increase is in force.

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Since the escalator clause was put into place in 2017, there have been five straight increases, allowing Canada to surpass Japan as the country with the highest alcohol tax in the industrialized world. This can be viewed as good news by those who oppose alcohol. Making alcohol more expensive will encourage customers to consume less of it. From the standpoint of public health, which is undoubtedly what Ottawa is aiming for, it makes perfect sense. Fiscal policies that limit alcohol consumption are nothing new, but Canada has now reached a tipping point where our government’s insatiable desire for more tax revenue threatens to harm a whole economy.

Alcohol consumption

According to Franco Terrazzano, the federal director of the Canadian Taxpayers Federation, taxes account for around 50% of the cost of beer, 65% of the cost of wine, and more than 75% of the cost of spirits.

The question that now arises is:

Will Canadians drink less? or Will Canadians shop for alcohol more often in the US? or perhaps Will Canadians start to burn their own alcohol more often?

So far, barely anyone knows about the upcoming price hike!

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