Spirits Canada is the leading advocate for the Canadian spirits industry, ensuring the sector’s voice is heard in policy-making processes. Our work focuses on creating fair regulations, supporting industry growth, and fostering responsible consumption. Spirits Canada plays a critical role in shaping public policy by working collaboratively with government bodies, industry stakeholders, and consumers to advance the interests of the spirits industry.
The automatic escalator on federal excise tax, introduced in 2017, increases annually without parliamentary approval. Canadian consumers already pay among the highest spirits taxes globally—ranging from 60% to 140% depending on the province. This creates a significant burden on the industry and limits consumer access to a diverse range of products.
A more equitable excise tax structure would support industry growth, encourage product innovation, and ensure fair treatment of spirits within Canada’s fiscal framework. Canada’s whisky producers are investing in premiumization, yet excessive taxation makes many high-end whiskies unaffordable domestically, limiting availability. Fiscal policies that incentivize aging, similar to Kentucky’s bourbon tax credit, would encourage longer maturation and enhance the local market.
Liquor mark-ups, provincial taxes, and additional levies (GST/HST, volume taxes, bottle deposits, environmental fees) further inflate costs. Provincial liquor boards, whether operating as regulators or retailers, should align policies to support a competitive and fair marketplace.
A balanced tax framework would promote consumer choice, industry growth, and international competitiveness for Canadian spirits.
Outdated alcohol policies at both federal and provincial levels create barriers to consumer choice, industry investment, and economic growth. We work to modernize Canada’s spirits regulations—advocating for direct-to-consumer sales, expanded retail access, and a fair marketplace where spirits compete on equal footing with other alcohol categories.
A strong export market is essential for Canada’s spirits sector. We push for policies that enhance international trade opportunities, eliminate discriminatory tariffs, and streamline interprovincial trade barriers. Our goal is to ensure Canadian spirits can thrive both at home and abroad.
Finance Canada implemented an automatic escalating excise tax in 2017. This tax is indexed to increases in the Consumer Price Index and automatically rises each year, without having to pass through budgetary approval in parliament. Canadian taxpayers already pay more in taxes for spirits than most consumers around the world; between 60% and 140% depending on the province. Continuing to add more tax onto distilled spirits when other substances such as cannabis enjoy a flat tax rate unjustly targets the category and sends a confusing message to consumers.
Consumers contribute a significant amount in federal excise tax through their purchases of distilled spirits on an annual basis. Spirits are taxed at a higher rate than beer or wine, even though standard drinks each contain about the same amount of alcohol. Differentiated tax rates were introduced at the end of prohibition, to encourage Canadian consumers to moderate their consumption of beverage alcohol that had higher levels of alcohol. Studies have shown, however, (The Effect of Changes in Alcohol Tax Differentials on Alcohol Consumption, Markus Geheritz, Department of Economics, Strathclyde University), that when prices rise, consumers who choose to drink beverage alcohol switch their product choice from a more expensive to a less expensive option when prices increase, but do not actually consume less ethanol. This indicates that current excise design does not actually discourage consumption of alcohol and instead unfairly favours some categories of beverage alcohol over others.
Spirits Canada favours an equitable excise tax on beverage alcohol that does not distinguish between categories. This would allow many consumers to access and enjoy a wider variety of products, and would encourage the diversification and premiumization of products that are currently available to Canadian consumers.
Due to increasing market demand, the Canadian whisky distilling industry has launched efforts to premiumize many of their brands, and they are releasing some very special blends and single malts. This is exciting news for Canadian whisky lovers, but many of these products are only available in the US and other export markets because the tax regime and other limitations in the Canadian marketplace make these whiskies too expensive for Canadian consumers to purchase, and they only do so in limited quantities. In recognition of this highly valuable segment of the market, Canada’s fiscal policies could encourage distillers to leave their products to age for longer periods of time, and increase the local availability of these very special whiskies. States such as Kentucky have adopted a fiscal credit to encourage the premiumization of its aged bourbon, allowing producers to leave their product in barrels as inventory as long as it takes to produce these very special aged products, without being penalized for not bringing them to market.
Spirits Canada works closely with provincial liquor boards, who are both customers and regulators of the beverage alcohol industry. Alberta, British Columbia, and Saskatchewan have opted to allow private retail stores to sell alcoholic beverages to consumers in those regions. Other provinces and territories use provincial liquor stores to distribute alcoholic beverages. In all cases, however, the wholesale purchase and distribution of beverage alcohol is managed through local liquor boards at the provincial level.
Liquor boards charge a mark-up on the price of alcohol that they sell. Similar to the federal excise tax, mark-ups differ depending on the category of beverage alcohol, and ranges depending on the province. Consumers also pay GST, HST, volume tax, bottle deposits, and an environmental tax on each bottle of alcohol that they consume.
The State of Kentucky in the United States realized that the growth of the bourbon industry would be beneficial to the economic growth of the state. In order to encourage further investment and growth of this popular category of beverage alcohol, they introduced tax measures that included promotion of the Bourbon Trail, tying the distillery industry to tourism, and connecting consumers to the rich history that Bourbon plays in the country.
Spirits Canada aims to connect consumers to industry partners such as those in the agricultural and farming industry, Canadian distillers, responsible drinking advocates, the hospitality and tourism industry and distributors of premium spirits to further educate, promote and increase the economic impact in the country.
The global distilled spirits industry thrives on international collaboration and open markets. Spirits Canada is in close contact with the World Spirits Alliance, Spirits Europe, the Scotch Whiskey Association, the Irish Whiskey Association, the Tequila Chamber of Mexico, and the Distilled Spirits Council from the United States, to ensure that access to each of these markets is transparent and allows for non-discriminatory competition between member companies. Collectively, these organizations and their member companies represent hundreds of years of trading experience and are an important resource for governments interested in furthering trade links between nations.
One of the most intriguing aspects of the distilled spirits industry is the opportunity to enjoy the products of other countries without leaving the comfort of your living room. These associations work together to maintain open borders for our members’ products.
