The price of alcohol is set to rise in just over a month with a tax increase on tap for Ontario, along with the rest of the country.
A 6.3 per cent federal tax on beer, wine and spirits will go into effect on April 1.
This excise tax automatically climbs every year in accordance with the rate of inflation. When it was introduced in 2017, the federal tax on alcohol rose by two per cent.
The Liquor Control Board of Ontario (LCBO) told CTV News Toronto that their prices are based on a variety of factors: the supplier’s price plus federal import and export duties, freight, levies, a standard mark-up, HST and container deposit.
“Our suppliers set their own pricing (subject to minimum retail prices) and have the option to adjust their pricing up or down throughout the year in response to currency fluctuations, federal taxes or freight rate changes, or price changes by their competitors,” an LCBO spokesperson said.
Retail price increases are determined by alcohol producers, the provincial liquor board explained. Meaning, price hikes that come into effect on April 1 at Ontario liquor stores will vary product-by-product.
“What we are forecasting is if this goes ahead, the price of a 12 pack in Ontario, given everything going on, would go up about 10 per cent,” CJ Hélie, President of Beer Canada, told CTV News Toronto. That increase would be due to a compilation of cost increases across the board for the beer sector, including the price of barley, corn and transportation, alongside the tax.
“It would be more of a gradual thing,” Hélie said about the potential price hike. “That sticker shock is too much. Breweries would look to do it in increments throughout the year.”
At 46%, almost half of beer’s retail price are taxes today in Canada, the highest rate in the G7. Japan, with the 2nd highest rate, will reduce their beer taxes in October 2023 and in 2026. The Canadian government is set to raise beer taxes by 6.3% on April 1st. #HereforBeerpic.twitter.com/on4ZUUzL8r
In an effort to avoid that scenario, he is pushing for a freeze on the tax until inflation returns to Canada’s two per cent target. “It’s just the worst time to pile on and make things worse,” Hélie said, pointing to the rough patch of pandemic years when the hospitality sector shutdown, dragging sales down by about 3.5 per cent last year.
Advocacy for the tax freeze comes as a new report, funded by Health Canada, found consuming more than two drinks per week constituted a moderate health risk due to evidence linking alcohol to cancer. These guidelines marked a significant change from the previous understanding that men could have up to 15 drinks per week with low risk, and women up to 10.
Restaurants Canada, a national not-for-profit association representing the industry, is also calling for a deferral of the upcoming federal tax increase in order to grant food and beverage businesses more room to “absorb another tax increase at this vulnerable time,” the organization said earlier this week.
Canada’s Chamber of Commerce has called on the federal government to repeal the automatic tax increase or at minimum, freeze it.
MTY Food Group Inc. says its profit and revenue both slid in its most recent quarter.
The restaurant franchisor and operator says its net income attributable to owners totalled $34.9 million in its third quarter, compared with $38.9 million a year earlier.
The results for the period ended Aug. 31 amounted to $1.46 per diluted share, down from $1.59 per diluted share a year prior.
The company behind 90 brands including Manchu Wok and Mr. Sub attributed the fall to impairment charges on property, plants and equipment along with intangibles assets.
Its revenue decreased slightly to $292.8 million in the quarter from $298 million a year ago.
While CEO Eric Lefebvre saw the quarter as a sign that the company’s ongoing restructuring is starting to bear fruits, he said the business was also hampered by significant delays in construction and permitting that resulted in fewer locations opening.
This report by The Canadian Press was first published Oct. 11, 2024.
Taiga Motors Corp. says the Superior Court of Québec has approved its sale to a British electric boat entrepreneur.
The Montreal-based maker of snowmobiles and watercraft says it will be purchased by Stewart Wilkinson.
Wilkinson’s family office is behind marine electrification brands that include Vita, Evoy, and Aqua superPower.
Wilkinson and Taiga did not reveal the terms or value of the deal but say Wilkinson will assume Taiga’s debt to Export Development Canada and has committed to funding Taiga’s business plan.
The companies say the transaction will allow them to achieve greater economies of scale and deliver high-performance products at compelling prices to accelerate the electric transition.
The sale comes months after Taiga sought bankruptcy protection under the Companies’ Creditors Arrangement Act to cope with a cash crunch.
This report by The Canadian Press was first published Oct. 11, 2024.
Toronto-Dominion Bank is facing fines totalling about US$3.09 billion from U.S. regulators in connection with failures of its anti-money laundering safeguards.
The bank also received a cease-and-desist order and non-financial sanctions from the Office of the Comptroller of the Currency that put limits on its growth in the U.S. after it was found that TD had “significant, systemic breakdowns in its transaction monitoring program.”
