05 May, 2006

Canada: Small beer brewers say 'cheers' to tax cut

Canada's small beer makers expect to create 1,500 new jobs over 10 years as a result of the federal government's promise to cut the excise duty on their suds, CBC communicated on May 03.

In their first budget revealed May 02, the Conservatives said they will cut excise rates on beer by anywhere from 15 per cent to 90 per cent for brewers producing up to 75,000 hectolitres a year.

The Canadian Association of Small Brewers, which represents over 90 brewers across the country, applauded the move.

The brewers currently employ about 2,000 people, but they expect the tax cut will let them create about 1,500 new jobs in the next decade.

"The tax reduction will allow Canadian craft brewers to achieve important tax parity with small brewers in the U.S. and around the world, who enjoy significant tax advantages in their home markets," John Hay, director of the brewers association, said. "This will give us room to grow and compete in the highly competitive beer market," Hay added.

The association expects that about 45 per cent of the money saved from the excise tax cut will be invested in production and sales jobs.

Small brewers are defined as those producing less than 300,000 hectolitres of beer. They account for about five per cent of the Canadian beer market.

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