Well I’m sure that most of you have heard about the recent changes to the Alberta taxes on beer; in fact, I am sure that we have all heard quite a lot about it. I don’t want to repeat what has already been said by so many others (and much better than I could say it I might add) or just go on some sort of rant about it. I already wrote about the major changes back in November and my view on the situation has not really changed since then. But I do have this blog thing so I might as well say a few things. Forgive me for my ramblings.
So What’s New?
The big change took place last fall; there is no doubt about that. This one affects the beer scene out here as well but let’s take a breath and look at what really changed .
The breweries that really felt this new change are the microbreweries coming out of BC and Saskatchewan. In the last round of changes those guys were given a break in that they were permitted to operate on the same level as Alberta based craft breweries. Now whether you agreed with that exception or not is another matter but with the new system where everyone is taxed at $1.25 a liter their beer prices just saw an increase.
Now you might be wondering about what’s going to happen with all of those local small breweries. The government has stated that the Alberta based craft breweries will be receiving a grant to make up for this increase in taxes. Details on this rebate are scarce, or rather non-existent, for the time being but they seem to be implying that the hometown brewers will not have to raise their prices.
What I Am Worried About
My fear regarding this new change is based on my personal views of governments and what they end up spending our tax dollars on as well as my past work in the glorious world of accounting & taxation.
Basically, I am skeptical when the government says that you will not feel the effects of a new tax or hike in taxes. In my experience they are very strict on when they receive their money and not too worried about when they send over any dollars that are due to you.
Why am I worried about this for our local breweries? Well for new and small breweries cash flow can be a bit of an issue. It is something that they very much need in order to keep on buying supplies to brew and the equipment to keep on growing; but it can be tough to keep this steady flow of cash flowing. I guess that I am just worried that this whole thing will end up impeding this tricky part of doing business. But hey, I have been wrong before, so hopefully this is just another case of that.
I am also concerned that the macros will seize this moment of fear/confusion in the market & go on a major push to have their “crafty” options take over more tap space out there. Their prices will not be going up with these changes, they have lots of money to throw around and some of them have been acquiring craft breweries like there was some sort of sale going on.
Let’s try to focus on some of the positives that could come out of this change. Like I stressed in my post on the last round of changes, this can help the Alberta craft breweries to grow and it can be an incentive for more of them to pop up.
This whole blog has been dedicated to focusing on the positives of our local craft beer scene in the hopes that people would realize what we have here and help it to grow & improve. Because in the end, having a local brewing culture is integral to having a craft beer culture period.
When I came to Alberta the first brewery tour that I took was at the Wild Rose Currie Barracks. It was a great tour, the person leading it was enthusiastic, he felt deeply about what they were doing & the beer that they were producing. It was so cool to see the place where some of the beer that I drink came from and to actually speak to the people involved with the brewery. I walked away with even more appreciation for the brewery and for craft beer in general. Instances like that and when I met Graham & Jeff of Tool Shed, were why I decided to start writing about craft beer and even get involved with volunteer work.
Then there are the events. These last few days we have seen Prince’s Island Park transformed into a hub for music enthusiasts with the Calgary Folk Fest taking place. Throwing a massive event like this takes lots of hard work and expense. Who has been standing beside them as a sponsor? Big Rock Brewery that’s who. Enriching the local art/culture scene and taking part in community events, these are the things that our local breweries do along with brewing fresh beer for us to drink.
Now not all of these events have to be as big as Folk Fest. A few Stampedes back I went to the Village NUTraiser. This was a smaller scale event held at Bottlescrew Bills Pub to raise money for the Prostate Cancer Centre. This is a great example of how involved breweries are in their community and charities.
And on an even smaller scale I really enjoy going to a place like Trolley 5 or Last Best to try out their latest seasonal release. It’s pretty exciting and sometimes you can talk to some of the people involved in creating these beers.
My Problem With All Of These Changes
All of these tax raises only make it even more expensive. I really feel for businesses like liquor stores, bars and restaurants that have to continually deal with this rise in their costs to do business; especially in an economy which is not all that great. Let’s not forget that they are very much involved in this culture/scene as well.
And in the end, I am a consumer (a major consumer when it comes to beer). The buck will always get passed on to us because a business is in it to make a profit; it is as simple as that. It’s not like I am going to stop buying good beer so I find it frustrating to pay more for my favourite beverage, especially when it is going to the government.
My preference would be for them to have kept the old graduated markup tax plus given local breweries some form of subsidy or grant as more of an incentive to operate here. And it would be really great if the whole country removed their barriers to inter-provincial trade so that all Canadian craft breweries could ship their beer from sea to sea. Wouldn’t that be nice?
We just have to roll with the punches. I don’t think that bitching about it on social media or blaming certain parties will help anything. Write a letter to the government encouraging free trade between all provinces so that everyone can benefit. That might have more of an impact.
I guess that all that we can do is hope that free trade will one day come within Canada and raise a cheers to local craft beer, wherever that local scene might be.