Canada, SK: Petition asks Saskatchewan government to drop beer production levy

A Saskatchewan craft brewery fan started a petition asking the province to scrap the beer production levy, CBC.ca reported on June 7.

Craft breweries in Saskatchewan pay the government for every litre of beer they make. The more they produce, the more breweries pay.

Alysia Johnson, a self-described fan of the provincial craft brewery industry, recently started the petition.

Johnson said it was created to unite people who support local business and craft breweries to lobby the government to scrap the production levy.

"The production levy doesn't really have anything to do with sales or consumption or profits of the business. It's just an extra tax to brew the beer," she told CBC Radio's Saskatchewan Weekend.

"Ours actually happens to be one of the highest in the country and almost double that of our neighbouring provinces."

Johnson said the sums are small to the Saskatchewan Liquor and Gaming Authority (SLGA), but to craft breweries the levy can make a big difference.

Mark Heise, president of Rebellion Brewing in Regina, said the beer production levy cost about C$80,000 last year, and the company is on track to spend about C$100,000 this year on it.

"Some folks might say, 'well, you should have to pay that because you get to sell alcohol,'" he said.

"[Selling alcohol is] not a license to print money. We're talking multi-million dollars invested at the grassroots level, we're not big companies or corporations so it's a real struggle."

Heise said Rebellion takes the position that the levies are too high, serve no purpose and stifle growth.

SLGA recently told Rebellion, which has been operating for six years, that the brewery would be moving into a new bracket within the levy, paying 21 cents per litre of beer produced instead of 17 cents per litre.

"I've been drowning for the last five years and I've finally come up and can take a breath of air, and I'm just getting dunked back down under it," he said.

While Heise said he's not in favour of paying a tax to exist, he accepts that there is a standard across Canada when it comes to charging businesses to sell alcohol and would like to see the fees reduced in Saskatchewan.

He loves the province, but Heise said the "hardcore capitalist" in him thinks he'd be stupid to build a bigger brewery here in Saskatchewan instead of moving to Alberta or Manitoba to do so.

Gene Makowsky, minister of SLGA, said the production levy was essentially a tax and like the Provincial Sales Tax or income tax.

He said money collected through it ends up in the province's general revenue fund and goes toward highways, hospitals and other budgetary costs.

Makowsky noted that things like the production levy are also in place to offset some of the social costs that come with alcohol sales.

He said the province has looked at what other provincial jurisdictions have done when it comes to a beer production levy and he feels Saskatchewan is competitive.

Makowsky acknowledged that both Manitoba and Alberta have cheaper beer production levies than Saskatchewan, but noted that national producers pay substantially more than craft producers do to sell alcohol here.

"There's always that debate on anything we tax, whether it's too high or too low and where it should be," Makowsky said of Johnson's concerns raised in her petition.

He said the province collects about C$1.2 million in fees from beer, wine, spirits and coolers and cider production. Beer specifically collects about C$400,000 for the province.

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