JAY GOLDBERG: Parliament must end undemocratic alcohol tax hikes​on March 27, 2025 at 8:00 pm

Politicians should have to stand up and vote when they want to hike taxes on hard-working Canadians. 

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Unfortunately, when it comes to alcohol, politicians in Ottawa have been automatically hiking taxes since 2017. 

They haven’t had to vote. They haven’t had to defend their positions. They’ve just let taxes go up automatically and consumers have had to pay the price. 

And on April 1, alcohol taxes will go up by 2% automatically, thanks to the federal government’s alcohol escalator tax. That’s a tax hike being forced on Canadians because of a single vote taken way back in 2017. And, according to the Canadian Taxpayers Federation, it will cost Canadians roughly $40 million this year alone. 

Back in 2017, then-prime minister Justin Trudeau introduced the escalator tax, which automatically increases taxes on beer, wine and spirits every year without a vote in Parliament. 

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Over the past eight years, this undemocratic tax hike has cost Canadian consumers nearly $1 billion. 

If federal members of Parliament want Canadians to pay higher taxes on alcohol, at the very least, they should be forced to stand up in Parliament, vote and defend their position. 

Hiking alcohol taxes right now is indefensible. Not only is the industry being slammed by tariffs from the Trump administration, but a huge portion of what Canadians already pay when they buy beer, wine and spirits is taxes. 

Roughly half of the price of beer, two-thirds of the price of wine and three-quarters of the price of spirits is simply made up of taxes. 

To add insult to injury, Canadians pay roughly five times as much in alcohol taxes compared to our neighbours south of the border. 

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Life isn’t just being made harder for Canadian consumers. When taxes go up, it hurts brewers, distillers, pubs and restaurants. 

At a time when politicians keep talking about defending Canadian businesses and buying Canadian, hurting Canadian businesses with an undemocratic alcohol tax hike is the last thing that should be on the agenda. 

The undemocratic escalator tax won’t be stopped in time for April 1. Canadians are in the middle of a federal election campaign and repealing the escalator tax will require action from Parliament. 

However, now is the perfect time for Canada’s political parties to get on the record: Will they repeal the undemocratic alcohol escalator tax if they win the election on April 28? 

Every political party should commit to ending the escalator tax if they receive a mandate from Canadians to form a government after the next election. 

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This isn’t just about taxation, it’s about democracy. In a democracy, citizens send representatives to Ottawa to vote for policies on their behalf. 

There’s a good chance that, after April 28, the vast majority of members of Parliament who show up to work won’t have even been there for the 2017 vote that initiated the escalator tax in the first place. Shouldn’t they have a say on what tax rates get set at in future years? 

To help Canada’s struggling businesses, the next government should commit to repealing all the alcohol escalator taxes imposed since the escalator tax was passed in 2017 and return taxation rates to pre-2017 levels. Even back then, Canadians were paying some of the highest alcohol taxes among peer countries. 

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Undoing the impact of the escalator tax shouldn’t even be seen as a tax cut. Rather, it should be seen as doing away with an undemocratic tax hike mechanism that’s been unfairly forced on Canadians. 

Eliminating this escalator tax is also essential because of the precedent it sets. If the government can automatically hike alcohol taxes today, what’s to stop politicians from passing a law automatically hiking income, sales, or corporate taxes tomorrow? 

Prime Minister Mark Carney hasn’t shied away from eliminating many of his predecessor’s tax hikes. He’s scrapped the capital gains tax hike and ended the consumer carbon tax, too. 

Carney and other federal leaders should make scrapping the alcohol escalator tax the next priority as the federal election campaign rolls on. 

 Jay Goldberg is the Canadian affairs manager with the Consumer Choice Center 

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