Letter to Lloyd Longfield - Alcohol Escalator Tax

Oct 1, 2020

Re:  Federal Alcohol Escalator Tax

Dear Mr. Longfield,

In the 2017 Federal budget, the Government introduced excise duty taxes on beer, wine, and spirits that would automatically increase every April 1st putting domestic sellers and producers of these products at a competitive disadvantage. The Guelph Chamber of Commerce strongly urges the Federal Government to reconsider this escalator tax.

Stimulating our national and local economies is always vital, but has never been more vital than now, as we continue to navigate the COVID-19 pandemic. The businesses that are suffering from this escalator tax were among the first in our communities to step up to the plate and shift their operations to help support front-line workers and citizens during the beginning, and throughout all stages of this pandemic.

Local distilleries like Dixon’s Distilled Spirits and Spring Mill Distillery put their day-to-day business operations on hold to make and donate hand sanitizer to our hospitals and first responders. These distilleries already operate in highly taxed and highly regulated environments, negatively impacting their capacity and competitiveness to export to other countries. The timing couldn’t be worse to force these businesses to raise the prices of their products.

It is not only the beverage producers that are suffering from this escalator tax. We know that the ongoing impacts of the pandemic have been especially devastating for Canada’s hospitality industry too. Tens of thousands of Canadian bars and restaurants rely on alcohol sales to stay afloat. In a recent survey completed by our colleagues at the Canadian Chamber of Commerce, they found that nearly 60% of Canadian restaurants could fail within the next 3 months.

Now more than ever, all levels of government need to stand up to support local, Canadian businesses. Canada needs to continue to foster a climate that encourages the growth of our businesses. As the Federal Government considers the necessary measures required to support Canada’s economic recovery, we urge you to repeal the escalator tax. Help our local and national beverage producers remain competitive. Help our local and national bars and restaurants in recovering from the financially crippling effects of the COVID-19 pandemic.

I hope you will consider supporting some of our amazing local beverage producers, such as Dixon’s Distilled Spirits, Spring Mill Distillery, Fixed Gear Brewing, Wellington Brewery, and Royal City Brewing, among others. We’re fortunate to have these incredible companies in Guelph who continue to support our community through any challenge that arises. It’s now the Canadian government’s time to speak out and reciprocate that support by removing the escalator tax.



Shakiba Shayani, President & CEO

Guelph Chamber of Commerce