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Spirits Canada Launches NOT ON MY TAB Campaign in Toronto

Urgent Call to Repeal Automatic Escalator Tax on Beer, Wine & Spirits Hurting Canadians and Canada

TORONTO, ON – September 12, 2018 – Spirits Canada, the sole national association representing Canadian distillers, launched the NOT ON MY TAB campaign this morning in Toronto’s historic Distillery District. The campaign seeks to repeal automatic annual increases in excise taxes on spirits, beer and wine imposed by the federal Liberal government.

Spirits Canada is calling on help to stand up for hard working Canadians, Canadian whisky makers, Canadian farmers and jobs here in Canada.

Annual automatic excise tax increases that drive up the cost of drinks, takes money out of the pockets of consumers, and drives jobs and investment out of Canada, must be repealed as part of the next federal Budget.

In the March 2017 federal budget, the Liberal government resurrected a damaging escalator tax on alcohol, originally introduced in 1982. During its 5-year span, the escalator tax of the 1980’s devastated the spirits industry, resulting in 11 commercial Canadian distilleries closing their doors permanently, and thousands of lost jobs. If not repealed, more jobs will be lost, distilleries will close, and farmers and other businesses serving the spirits industry, including bars and restaurants across the country, will be harmed.

The NOT ON MY TAB campaign highlights several important factors:

Another New Tax – Canadians already pay amongst the highest alcohol taxes in the world, yet the new tax burden means prices will go even higher. The new escalator tax is hidden from consumers and rises automatically on April 1st every year – forever! This new tax affects not only Canada’s spirits and agricultural industries, but also the country’s tourism and hospitality sector. Shockingly, Finance Canada officials acknowledge the measure was adopted without any consultation or analysis of its impact on consumers, bartenders and servers, whisky makers or farmers. A tax whose impact was not analyzed before

implementation, and is not reviewed annually by Parliament, sets a dangerous precedent for Canadian businesses, taxpayers, consumers and democracy.

Canadian Economy & Supply Chain – Supporting 8,500 jobs across the country and pouring $5.8 billion annually into Canada’s GDP, the spirits industry is a significant economic contributor. Established nearly 200 years ago, Canadian distillers purchase 100% of their grains, including barley, corn, wheat, and rye, from local farmers. As a result, the local manufacturing of spirits helps sustain the local economies of rural areas across the country. The success – or failure – of Canada’s spirits industry will have a direct impact on farmers across the country, and the communities in which they live.

Global Competitiveness – Nearly coincident with the annual increase in excise taxes on Canadian spirits, was a historic decrease on excise duties imposed on American spirits under the Trump Administration’s January 1st 2018 Tax Cuts and Jobs Act. At the same time, unprecedented uncertainly with NAFTA renegotiations, attacks on the WTO trading regime, and “tit-for-tat” retaliatory duties are imposing a chill on industry investment and on new market development. Canada’s tax framework has made our distillers uncompetitive internationally, while the United States and other competitors are creating a much more welcoming and efficient environment in which to operate.

The NOT ON MY TAB Campaign seeks to repeal the unsustainable escalator tax on alcohol – to support ordinary Canadians who enjoy a social drink with family and friends, and to create a more competitive marketplace.

“The escalator tax on alcohol was not analyzed in terms of long-term consequences, and its damage will only get worse if not repealed,” says Jan Westcott, President & CEO of Spirits Canada. “Distillers cannot survive another new level of production taxation, with Canadians already paying 80% tax on every bottle of spirits. We acknowledge that taxes play an important role in providing social services, but spirits consumers already pay more than their fair share, and the fact is the new escalator tax has made a bad tax even worse and it needs to be repealed.”

Adds Westcott: “Canadians will always drink spirits, but unless we start to think longer-term, the question before us is – will any of those spirits be made right here in Canada, from grains grown by Canadian farmers or, will they be imported from other countries, creating jobs and economic opportunity elsewhere? It’s time to stand up and fight for hard working Canadian consumers, Canadian whisky makers, Canadian farmers and for jobs here in Canada.”

The NOT ON MY TAB campaign will be visiting communities across Canada during September, October and November of 2018 to seek support to the repeal the new escalator tax. To learn more, please visit: www.notonmytab.ca

For more information, please contact:

Jan H. Westcott, President & CEO, Spirits

Canada JanWestcott@acd.ca 416.707.8851

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