“It’s a bit of a mixed emotion, to be honest.”
That was Ken Beattie, the executive director of the BC Craft Brewers Guild’s reaction in response to the federal government’s announcement of a two-year extension of alcohol excise duty relief. This was announced on April 2 at Barnside Brewing in Delta by Jill McKnight, the Minister of Veterans Affairs and Associate Minister of National Defence.
The purpose of the relief is to protect breweries, distilleries, and winemakers “during a period of global uncertainty.”
Secretary of State (Defence Procurement) and Kelowna MP Stephen Fuhr said the relief was created in 2023 and has been extended a couple of times now.
“We’ve had a lot of different breweries and wineries and distilleries reach out to the office and talk about them being worried about this going, being connected to inflation with all this uncertainty with what’s going on down in the U.S. and globally,” said Fuhr. “Everything’s a bit of a shambles right now, so… renewing the cap is adding a little bit of certainty to what they can expect.”
In the announcement, the government said the annual inflation adjustment on beer, spirits, and wine excise duties will remain capped at two per cent, while the excise duty rate on the first 15,000 hectolitres of beer brewed in Canada is set at one per cent.
Fuhr added that, ironically, inflation as of February was down to 1.8 per cent, below the capped two per cent.
“Despite all the challenges, and there are many… the government’s doing a pretty decent job of keeping inflation under control, given our biggest trading partner south of the border is moving in the opposite direction,” said Fuhr, adding America’s inflation rate in February was 3.2 per cent. “Oftentimes, we’re very connected to them and when something happens there, it translates up here, so that cap added some certainty to an uncertain time.”
Beattie told Black Press Media that the announcement was “a sign of relief” and “a step in the right direction,” but it doesn’t meet what the Canadian Craft Brewers Association (CCBA) has been asking for.
“Until about 48 hours prior to the announcement, we thought they were going to roll back the exemption, which is 50 per cent on the first 15,000 hectolitres, anywhere between $2,000 and $90,000 for members,” said Beattie. “But it’s kind of bittersweet, [it was a] step in the right direction to extend it but, it wasn’t what the Canadian Craft Brewers Association and all our members were looking for.”
Beattie explained that at the end of the day, it’s still a two per cent increase.
“We’ve asked the federal government, now going on three years, to re-look at the entire system and offer a 50 per cent reduction on all volume under 500,000 hectolitres, that’s what our ask has been,” said Beattie. “We didn’t get that, but it’s definitely a step in the good direction because we’re just getting hammered with taxes and fees and everything else, cost of goods and everything else that’s going on in the world.”
While Fuhr didn’t have specific numbers for Kelowna, he said the tax relief will total $33 million for breweries, wineries, and distilleries across the country.
“I think in the long run, we’re going to come out a little better than we went in,” said Fuhr. “It’s just going to be a little uncertainty in the interim period. And this cap on the excise tax for this very specific niche market, compared to everything else, is going to be helpful.”
On a provincial level
In Canada, the beer tax is on average about 46 per cent of the retail price, said Beattie.
“What people may not understand is we get charged PST, we get charged GST, we get charged excise, we get charged container recycling fees in provincial sales markups that are aggressive,” Beattie explained, mentioning the proposal the BC Craft Brewers Guild announced on July 31, 2025.
“We can’t really continue to raise our prices, even though our costs of goods have gone up over 30 per cent in the last three years,” added Beattie. “We’re at a point where we can’t be selling four beers for $25. The market demands what the market demands and we’re conscious of that, obviously… it’s a real struggle… we’re not asking the governments, either federally or provincially, to bail us out. All we’re asking is don’t take as much money from us as you are currently.”
Beattie called the 46 per cent beer tax and a capped two per cent every year on April Fool’s Day “excessive”.
B.C. Premier David Eby was in the Central Okanagan on April 8 and 9. When asked about what the provincial government is doing to help the local alcohol scene, in relation to the federal government’s alcohol excise duty relief, he connected tourism to the industry.
“I think here in the Okanagan, one of the key parts of tourism is obviously the wine industry, but increasingly craft beers and distilleries that are also participating in this,” said Eby. “Our minister responsible for liquor is also working with craft distillers, with brewers, and with wineries to find ways to increase tourism, increase flow through their businesses, and address concerns that they have about structures related to taxes at the provincial level. We want to encourage growth, we want to encourage opportunity.”
Eby added a “crucial area” for the alcohol industry is inter-provincial trade.
“We have been very, very frustrated by the gap between public statements by premiers across the country about their desire for free trade between provinces and the actions on the ground, especially when it comes to the availability of B.C. wines in places like Ontario and Quebec,” said Eby, adding Ontario banned California wines from their shelves. “There’s lots of space… we’re ready to go. We’re ready to welcome Ontario wines into British Columbia, just like we did with Alberta, addressing their concerns, opening up that market to B.C. wines.”
“Let’s get on it, and I think that would be a very meaningful and significant change and an opportunity for distilleries, breweries, and wineries in British Columbia,” added Eby.
The big dogs, the newbies, coming and going, expansion, innovation
In response to the alcohol relief, Beattie said the smaller breweries benefit more than the regional ones, adding about 60 per cent of them make more than 15,000 hectolitres.
“They don’t really benefit,” said Beattie. “There’s no material benefit overall to them because they’re far exceeded, by the time April 1st comes around, they’ve done 15,000 hectolitres.”
Meanwhile, Beattie guessed the average brewery in the Central Okanagan will save between $2,000 and $2,500 from the relief.
While larger, more regional breweries don’t necessarily benefit, those are the “engines” of the industry, Beattie said, specifically mentioning Phillips Brewing in Victoria and Parallel 49 out of Vancouver.
“They’re investing and trying to grow their business all the time,” said Beattie, adding that these breweries employ more than 100 people. “They’re of a size that they can diversify into non-alcoholic and other things, and maybe spirits in some cases, refreshment beverages. A small [brewery] can’t do that because they don’t have the money because everything costs too much to install the equipment.”
Regionally, Kelowna’s BNA Brewing expanded to Penticton and Vernon, which Beattie called a “really good success story.”
Despite challenges, Beattie is very happy to still see new breweries opening, mentioning Cutwater Brewing in Lake Country and Revystoked Brewing in Revelstoke.
So far this season, the number of breweries in B.C. opening compared to ones closing is about even, added Beattie, but it comes with some worry.
“We have seen some of the bigger breweries [close] and that’s more of a concern,” said Beattie. “A legacy brewery like Lighthouse in Victoria closing, that’s concerning.”
On the other side, some breweries have been able to expand from their original location to other parts of the province, which is a good thing, added Beattie.
On top of BNA, some others include Britannia Brewing expanding from Steveston to Ladner and Lake Country, and Yellow Dog Brewing expanding from Port Moody to Penticton.
In relation to expansion, Beattie said a cost for breweries that the public might not realize is distribution across the province.
“The cost of getting product around this province is incredibly expensive, particularly beer, which is very heavy and awkward to move,” said Beattie. “People are looking for distribution changes. Breweries in the Lower Mainland move into the Interior, and there’s lots of opportunity and some action where people are working in the other way around.”
Collaboration is growing between breweries as well, with breweries that are closing finding ways to keep their brands alive.
Beattie said despite the fact Slackwater Brewing in Penticton closed its doors, the company sold its brand to Rewind Brewing and Parkside Brewing in Port Moody and its distribution has grown. Another example of this is Vice and Virtue Brewing, which closed in Kelowna and was sold to Red Bird Brewing, who decided to keep the Vice and Virtue brand going.
“The brand stays alive and the jobs stay alive because it’s the same people, at least the jobs in sales stayed alive in marketing,” said Beattie.
“There’s people diversifying and working together, and that’s what we need.”
Breweries are becoming innovative as well, expanding from just creating beer and diversifying their business, Beattie added.
Three Kelowna breweries are an example of this: Red Bird, Rustic Reel Brewing, and Barn Owl Brewing, which all roast and have their own coffee as well. Beattie also brought up the fact that Rustic Reel has space for weddings.
Death by 1,000 cuts and the summer ahead
Beattie reiterated a statement that he said after three breweries closed in the Central Okanagan in a month’s span at the end of 2024, that the brewery industry is in “survival mode” and has been since the pandemic.
“It’s kind of death by 1,000 cuts, which you hear quite often,” said Beattie.
On top of all the costs that come with operating a brewery as well as distribution, Beattie said there’s taxation on bookkeeping, architecture and engineering services. He also mentioned minimum wage increasing on June 1.
“It just gets layered on and layered on and layered on, it’s like straws to the proverbial camel, at some point, it’s going to break,” said Beattie. “I think that’s why we need the taxation change so people can get innovative as opposed to just hanging on for dear life.”
While the alcohol relief from the federal government has been put in place to cap inflation, Beattie would still like to see the BC Craft Brewers Guild’s commands met by the provincial government.
“The taxation changes, whether they be the provincial sales markup change that we’re asking for and working with the government continually on, or the federal to go to what we would like to see, a 50 per cent reduction on everything, all of that just takes us from survival mode to thriving mode,” Beattie commented.
“Honestly, none of this is going to lower prices, but what it’s going to do is keep the economy going and keep the jobs going, which is a spin-off effect of the multiplier,” said Beattie, adding it’s around $1.60 to every dollar invested. “That’s just good for the overall economy.”
Despite everything, there are lots of really good things happening in the provincial brewery industry, Beattie said, as there are still more than 200 breweries across B.C.
A large amount of upcoming tourism is also expected to help the industry this summer, with FIFA World Cup games happening at Vancouver’s BC Place this upcoming June and July.
“This year with FIFA, people are going to stick around,” said Beattie. “FIFA is about one month of soccer… but the eyeballs on the province are here for four or five years, that’s what they found during the Olympics. People were coming back because they saw it on television.
The same can be said to an extent for Kelowna, with the Memorial Cup, Vancouver Bandits, BC Lions, and BC Summer Games all taking place within a three-month span.