OTTAWA, ON: The Canadian Taxpayers Federation is calling on Prime Minister Mark Carney to end the alcohol escalator tax that automatically increases federal alcohol taxes every year without a vote in Parliament.

“Carney shouldn’t be hiking taxes at all, he should be cutting taxes to make life more affordable and help Canadian brewers, distillers, pubs and restaurants survive,” said Franco Terrazzano, CTF Federal Director. “The government has had years to end its alcohol escalator tax, so merely capping an undemocratic tax hike doesn’t go nearly far enough.

“Carney needs to scrap the undemocratic alcohol escalator tax for good.”

The federal government will extend its two per cent cap on annual alcohol tax increases, The Canadian Press reported.

A two per cent federal alcohol tax hike will cost taxpayers about $41 million in 2026-27, according to industry estimates.

First passed in the 2017 federal budget, the alcohol escalator tax automatically increases excise taxes on beer, wine and spirits every year without a vote in Parliament.

Since being imposed, the alcohol escalator tax has cost taxpayers about $1.6 billion, according to industry estimates.

“We are increasingly concerned that another automatic beer tax increase, layered on top of tariffs, rising input costs, and stagnant sales, could push some breweries to reduce production and cut jobs,” reads a letter from unionized Canadian brewery workers to the federal government. “At a time when Canadians are struggling with affordability and workers’ futures are uncertain, it is difficult to understand how another tax hike on a proudly Canadian manufacturing industry could be justified.”

Taxes from multiple levels of government account for about half of the price of alcohol.

“Automatic tax hikes are undemocratic, uncompetitive and unaffordable and they need to stop,” Terrazzano said. “If politicians think Canadians aren’t paying enough tax, they should at least have the spine to vote on the tax increase.”