Finance Minister Joe Ceci and the NDP government sure love craft beer, but they might want to start hitting the hard stuff.
Their monkeying around with Alberta’s beer taxes (also known as liquor markups) in an attempt to promote the domestic craft-brewing industry has blown up in their faces.
In a new decision, the province lost a key part of its appeal of an internal trade ruling that was originally made last summer.
The initial decision found Alberta’s policy of boosting beer markups — and then offering back rebates, but only to provincial brewers — was offside of free-trade provisions within Canada’s Agreement on Internal Trade.
Now, a three-member appeal panel that heard the dispute between the government and Calgary-based Artisan Ales Consulting has concluded the province’s program to promote local brewers violates provisions within the trade agreement.
It found the Alberta Small Brewers Development Program (ASBD) “provides a competitive advantage” to domestically produced beer.
“It distorts the playing field and, as such, results in ‘less favourable treatment’ of beer produced in other provinces,” states the new ruling.
While the panel concluded higher beer markups don’t discriminate against imported brew, the grant program acts “as an obstacle to internal trade, providing brewers in Alberta with competitive advantages that brewers and sellers in other provinces do not have and preventing entry into the Alberta market,” it said.
“We kicked their asses,” said a jubilant Mike Tessier, who started the beer-importing agency Artisan Ales with his partner, Bo Vitanov, in 2009.
The dispute began in October 2015 when the NDP government overhauled the beer markup system, a profit the province collects for supplying and distributing liquor.
Alberta had previously applied a lower tax to small breweries to encourage the sector’s development.
In its place, the government imposed a higher markup of $1.25 a litre, except on suds produced in Saskatchewan, British Columbia and Alberta. (All are members of the New West Partnership, a pact of free-trading allies that now spend their time scrapping over licence plates and pipelines.)
The measure helped Alberta brewers, but hammered local businesses like the one started by Tessier and Vitanov.
Artisan Ales, which imports craft beer into Alberta — mainly from Quebec — launched a complaint under the interprovincial free trade deal, arguing the policy was discriminatory.
By August 2016, the Notley government revised the system again, applying the $1.25-a-litre markup to beer brewed in any province. Then, it offered a grant through ASBD to beer produced in the province.
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