• Chamber calls for tax equity for distilleries

    VERNONThe Greater Vernon Chamber of Commerce is urging the federal government to create an environment that allows craft distilleries to thrive, create jobs and compete with their U.S. counterparts.

    In a Dec. 21 letter to Finance Minister Chrystia Freeland, Small Business Minister Mary Ng and Agriculture Minister Marie-Claude Bibeau, the Chamber indicates that the U.S. Congress has approved the Craft Beverage Modernization and Tax Reform Act, which will shift a 2017 excise tax reduction from a trial period to permanent status.
     
    “The U.S. tax structure creates significant challenges for Canadian craft distillers and puts our domestic industry at a cross-border trade disadvantage,” said Krystin Kempton, Greater Vernon Chamber president.
     
    American distillers have seen the excise levy decrease from $13.50 U.S. to $2.70 U.S. per proof gallon for the first 100,000 gallons produced in a calendar year (400,000 litres at 50 per cent alcohol/volume), which equals $1.74 per litre when converted to Canadian dollars. In direct comparison, Canadian distillers pay $12.61. per litre.

    “Given the need to grow the Canadian economy as it recovers from the Covid-19 pandemic, we would urge the Government of Canada to immediately initiate excise parity with the U.S., where the reduced taxation level has led to 2,000 distilleries, thousands of jobs and benefits for agriculture and equipment production. When the overall economic impact is considered, the excise revenue loss has been minimal in comparison in the U.S.,” said Kempton.

    “A similar policy in Canada will mean domestic craft distilleries have additional finances to invest in equipment and facilities as well as creating employment opportunities in numerous communities across Canada such as Vernon. These entrepreneurs will also increase the demand for products and services from suppliers and particularly producers of fruit and grain.”

    The lower tax would be on the first 100,000 litres produced by a distillery and the government could still access tax on quantities beyond the 100,000 litres.

    The Canadian economy has been hit hard by the pandemic and there is a need for innovative and balanced policies that reinvigorate economic conditions in communities across this great nation,” said Kempton.
     
     
    FOR MORE INFORMATION CONTACT:    
    Dan Proulx, General Manager   
    Greater Vernon Chamber of Commerce
    P: 250-545-0771              E: manager@vernonchamber.ca