Canada’s restaurant industry is bracing for the biggest jump in the country’s alcohol excise duty in more than 40 years, spurring warnings the tax hike could force some bars and restaurants out of business.
As of April 1, a 6.3 per cent tax increase on wine, beer and spirits comes into effect.
"I was hoping that the government would take a little pity on us after all we’ve been through over the last two or three years. We’ve had supply chain issues, rising costs all the way from beer to liquor, and now we have labour shortages, so it just kind of piles on," said Yvette Wicksted, owner of Bull & Barrel Pub.
Donaleigh’s Irish Public House manager Colin Johnson called the situation less than ideal.
"I mean, when you break it down, it’s a few pennies per bottle per ounce but any little bit after the last few years that we’ve had is kind of a hindrance to the ability to do business," he said.
Johnson added that at Donaleigh’s, prices would not be raised immediately, but "Prices will eventually have to go up, I mean, you have to, but right away, we’re going to sit back and see how everything unfolds, and then we will have to react accordingly."
The tax increase is a big hike for wineries, especially after another recent increase in June.
"It’s absolutely huge, and it’s coming off some tough years when business hasn’t had a chance to recoup. Ontario lost a trade complaint to Australia regarding our wine industry, and all VQA wineries in Ontario are being subject to a new tax on the back end as well," said Walter Vaz, Heritage Estates Winery and Cidery. "So, it’s kind of a huge double whammy at a time when we can’t afford any increases."
Regional Vice President of Ontario with Restaurants Canada Tracy Macgregor said the increase is a big concern for its operators.
"We’re seeing a lot of different compounding costs for our operators, and they’re coming frankly out of a period of mounted debt, numerous increases," said Macgregor.
She noted the 6.3 per cent tax increase would cost an average full-service restaurant around $30,000.
Restaurants Canada officials hope the tax hike is deferred or reduced to a lower percentage.
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