Ever-increasing taxes drive us to drink ... if we can afford it
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Ever-increasing taxes drive us to drink … if we can afford it

The lack of rain this summer has plenty of downsides, but it has made for some great deck and patio weather. The heat has been ideal for the refreshing adult beverages that have been known to accompany such times.

A frosty beverage may help us cope with the sizzling temperatures, but there’s no relief from taxes that drive the cost ever-higher.

Canadians pay some of the highest alcohol taxes in the world. On average, 47 per cent of the price of beer in Canada is from federal or provincial taxes. Approximately 65 per cent of the price of wine is due to taxes and on average 80 percent of the price of spirits is taxes. In sum, Canadians already pay about $20 billion per year in alcohol taxes.

To make matters worse, Ottawa introduced an ‘escalator tax’ in 2017 that automatically boosts the price of alcohol each spring with no vote in Parliament and no real accountability.

Groups such as Restaurants Canada – which have seen the hospitality industry take a huge financial hit during the pandemic – have been calling for an end to the escalator tax, arguing the cascading effect of these recurring tax hikes means the resulting price increases faced by restaurants and consumers are exponential. Opponents say the tax escalator unfairly targets Canadian products and jobs, disproportionately hurting Canadian farmers, vintners, distillers, brewers, restaurateurs and their customers.

That’s a view shared by the Canadian Taxpayers Federation. The group’s Prairie director, Robin Speer, took aim at the policy in an opinion piece last month.

“If you thought the taxes you paid on your favourite case of beer or bottle of wine or liquor were high today, the Trudeau government is now saying, ‘Hold my beer!’

“Taxpayers have a right to know how much tax they’re paying when they crack a cold one or sip a Sauvignon blanc. They have a right to hold their MPs accountable if they push sky-high liquor taxes even higher. Politicians are hoping taxpayers don’t notice the escalator tax, but we can’t let them get away with running up our bar tabs,” he writes.

 “Excessively high levels of liquor taxes and the new skyrocketing escalator tax increase hurt you, the consumer.”

In Ontario, Premier Doug Ford has made some attempt at easing, however slightly, the burden of the nanny state. There is, of course, his leading the charge on “buck a beer” options, as well as some pricing relief for bars and restaurants coping with the pandemic.

Still, one could argue politicians here and across the country should lower taxes to serve as a diversion from the colossal failures of their governments. Instead, they continually hike taxes knowing we’ll continue to drink, in part due to the colossal failures of government, including unwarranted tax hikes and massive amounts of waste.

Irony, thy name is “I need a drink.”

Beer, wine and spirits are always being swept up in the move to separate Ontarians from their money.

That’s the reason there’s ongoing contempt for the government in general and, specifically, with a longstanding dissatisfaction with the handling of alcohol sales in the province, from absurd pricing to rigged sales restrictions.

Much of the ire is simply a reflection of our inherent dissatisfaction with the LCBO and paternalistic liquor laws, coupled with our distrust of pretty much anything overseen by bureaucrats and politicians. Tax increases are seen as another reason to privatize the operation, stripping government of its outdated controls of alcohol.

Privatization is not a good option, however – it would be a case of cutting off our nose to spite our retribution-seeking face.

Still, that’s not to say there couldn’t be improvements. Yes, the stores themselves have come a long way over the years. They’re much nicer places to shop, especially compared with the Beer Store, that even more antiquated government-sanctioned cartel selling us our suds. The hours have been extended, but there’s nothing like the convenience found in other jurisdictions. Nor the selection. And, most gallingly given that the LCBO is the world’s largest buyer of spirits, nothing like the much better prices found elsewhere.

If the LCBO really wants to be accepted, cut the prices significantly, offer a much better selection (something akin to a grocery store in Buffalo would be a start) and much more convenience.

The province, of course, has no interest in any of that.

With alcohol, as with cigarettes, governments suffer from multiple personality disorder. On the one hand, they’re addicted to the revenues, on the other they want to discourage consumption. The nanny state prevails, but they do love the money. (There’s a similar issue with gasoline, electricity and water, where government preach conservation, but decry the losses when we actually cut back.)

The nanny state is never more apparent when it comes to booze. Ontarians apparently would become hardened alcoholics without minimum pricing and fettered access. All we have to do is look at the problems in nearby provinces and states to see that. Oh, wait, that’s not what you’ll find. And the government doesn’t want you to look elsewhere, lest you become even more upset about the poor state of things here. Disillusionment is bad for the business of re-election.

What’s really needed is a cultural shift to something more European in flavour when it comes to booze: treating adults like, well, adults. Lower prices would be a start, as would allowing some competition in the form of specialized stores that could offer up some of the huge list of products the LCBO seems disinclined to stock (see the craft beer or whisk(e)y selections of some small U.S. shops, for instance).

Pricing is a big issue. In parts of Europe, you can find very drinkable wines for under $3 a bottle. Imports from Australia and the U.S. that run $15 to $20 here can be had for a third of that price. That tells you it’s all about markup and taxes – as noted, successive profligate governments are addicted to the LCBO profits, not to mention the tax revenues.

Where we might be inclined to drop a few bucks on a new Ontario wine or craft beer, the government’s pricing often precludes that option. Backwards policies make it even more difficult for upstarts to reach consumers. As a consequence, the industry suffers.

It’s enough to have us all crying in our (overpriced) beer … if we can still afford it given current inflationary pressures and economic malaise.

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