Craft distilleries want excise tax lowered to boost industry

They may be small in size, but they play a huge role in the local economy.

Craft distilleries use local products, hire local residents and pay taxes in the community, but they are doing so at a distinct disadvantage over other alcohol endeavours.

Tyler Dyck, president of Okanagan Spirits Craft Distillery in Vernon and Kelowna, said craft distilleries pay up to 40 times more in excise tax than other Canadian alcohol producers.

“Beer pays about one-40th the level of excise we pay when ours goes through the government liquor store,” said Dyck from the Vernon distillery. “That's based on a per molecule level, so it is a totally uneven playing field.”

Dyck said craft distilleries are an economic boon to whatever region they operate in.

“Because we use so many base agricultural materials, per litre a craft distillery is worth 10 breweries and six wineries,” he said. “So we are a major economic driver of true farm to bottle production. The best part is, it's all local. We rely 100 per cent on marketing ourselves as being tied to the local land.”

Dyck said anything that boosts the craft distillers, has a significant impact on local economies.

“The changes we are asking for will result in tens of thousands of jobs created across Canada and hundreds of thousands of agricultural lands planted just to fund that industry.”

Dyck said creating jobs is more important than ever in light of the economic devastation the shutdowns have caused because of COVID-19.

Changing the excise tax would also help even things out with their American counterparts.

Distilleries from across Canada are calling on representatives from all political parties to lobby the federal government to immediately match excise parity with the 2017 small distillers excise agreement in the U.S.

“Our message is to all MPs, but particularly those who have craft distilleries in their ridings. They are familiar with these operations and understand the positive impact they have had on local employment and agricultural production,” said Dyck, who is also the president of the Craft Distillers Guild of B.C.

Currently, Canada has an escalator tax attached to the excise tax and domestic distillers pay $12.61 per litre compared to about $1.77 per litre in the U.S.

“This massive cross-border tax excise imbalance has essentially made it impossible for Canadian distillers to compete and has stunted the potential of distilleries and agricultural producers,” said Dyck.

To sign a petition in support of changing the excise tax, click here.