A Calgary judge, on Tuesday, ordered the Province of Alberta to pay over $2 million in damages to two out of province breweries for violating interprovincial trade with a provincial beer tax.
Calgary Court of Queen’s Bench Justice Gillian Marriott found Saskatchewan’s Great Western Brewing Company is entitled to receive $1.9 million in restitution and Ontario-based Steam Whistle Brewing is eligible for $163,964. These restitutions come from Marriott’s findings that Alberta’s per-litre beer tax markup scheme introduced by the government in 2015, and changed in 2016, violated section 121 of the Canadian Constitution.
The essentials of the beer tax are simple. In an effort to support Alberta small breweries, the provincial government introduced a per-litre beer tax on out of province imports. When it was first introduced in 2015, beer produced in Alberta, British Columbia and Saskatchewan was given a lower markup per litre compared to beer produced in other parts of Canada. The markups varied depending on how much each brewery produced and imported.
Then in 2016, the tax was changed, applying a markup of $1.25 to every litre of beer regardless of where it was produced. However small Alberta craft brewers were given monthly grants to make up the difference between the lower 2015 markup and the uniform 2016 amount, which is what pissed off outside breweries.
Saskatchewan’s Great Western Brewing and Ontario’s Steam Whistle filed a court order that the policy violated free trade between provinces, a decision that was granted on Tuesday.
The court decision marks the second major setback this month to the province’s program.
In a decision released June 11, a three-person panel ordered the government to repeal or amend the Alberta Small Brewers Development Program (ASBD) within six months. This came from a complaint laid by Calgary beer importer Artisan Ales. The panel found the ASBD to be non-compliant and issued a six month timeline for changes.
Basically, while Alberta is in its right to work towards supporting the growing craft industry within its borders, the way they’ve gone about it is completely wrong. Protectionist beer policies are only going to harm the consumer, when the province should really be looking at other avenues that help encourage new brewery development, rather than punish outside influences.