Ontario has pledged to freeze taxes on alcohol for the next two years to help support the province’s alcohol and hospitality industries, according to a press release from the Government of Ontario’s website.
The beer basic tax and mark-ups on alcohol at the LCBO are rates scheduled to adjust annually based on a rolling three-year average set by Statistics Canada’s Consumer Price Index for Ontario.
The Ford government had previously frozen the beer basic tax and LCBO mark-up rates in 2018 until March 1, 2024.
However, the government announced Friday the freeze will remain in place until March 1, 2026 on Friday.
“Our government is constantly looking for ways to make life more affordable for Ontario families by putting more money back into their pockets,” said Premier Doug Ford.
“From stopping increases to the beer tax to cutting the gas tax, we are keeping costs down for businesses and families across the province.”
The basic beer tax was estimated to increase 4.6%, with LCBO mark-up rates being indexed to inflation.
The Ford government’s freeze on these taxes over the last six years has saved an estimated $200 million in relief.
“It’s good to see the Ford government providing relief and Prime Minister Justin Trudeau should do the same and scrap his upcoming alcohol tax hike,” said Franco Terrazzano, federal director of the Canadian Tax Federation.
The Trudeau government scheduled to raise its excise tax to be by 4.7% on April 1, 2024 as part of its alcohol escalator tax, which automatically raises the excise tax on beer, wine and spirits annually.
The Liberals first introduced this policy in 2017, as part of its federal budget, without a vote in Parliament.
“Canadians are struggling with affordability so at the very least Trudeau shouldn’t be making life more expensive with tax hikes,” said Terrazzano.
Ford’s decision is part of a bigger plan to broaden the province’s alcohol retail marketplace, which includes the sale of alcohol products in convenience and grocery stores Ontario-wide, beginning no later than Jan. 1, 2026.
“Our government is building on its commitment to offer choice and convenience to consumers while providing certainty and stability for the alcohol and hospitality sectors,” said Peter Bethlenfalvy, Minister of Finance in the press release.
“As we prepare to transition to a new alcohol retail marketplace, this pause on beer basic tax and LCBO mark-up rates will help make it easier for businesses by providing savings for consumers and helping brewers to reinvest in themselves and their workers.”
The Ford government also intends to conduct a “targeted review of taxes and fees on beer, wine and alcoholic beverages with the aim of promoting a more competitive marketplace” for consumers and producers who are based in the province.
“Premier Doug Ford is doing the right thing by freezing beer taxes,” said Jay Goldberg, CTF’s Ontario director. “Ontarians are struggling with the high cost of living and Ford is showing leadership by freezing taxes.”