Craft beer tax cuts are 'awesome,' say Thunder Bay microbreweries
The Ontario budget is creating hope for independent brewers
Thunder Bay micro breweries are hoping that business will boom following a provincial tax reduction announced in May.
The 2025 Ontario budget includes tax cuts for beer makers, including a 50% reduction in the basic beer tax rate for draft and non-draft beer produced by craft brewers.
I think it's a good step right now for a lot of Ontario breweries- George Renner
Kevin Brewer is the general manager at Sleeping Giant Brewery Co. He says that the tax cuts for independent beer brewers have been long anticipated.
"It's awesome," Brewer told CBC News. "It's really something we're very elated about and I'm sure other breweries in Ontario are as well, because it might represent a lot of saved money for us."
George Renner is the co-owner and co-founder of Dawson Trail Craft Brewery, another Thunder Bay craft brewer.
Like Brewer, he thinks that the cuts are a move in the right direction for his industry.
"[My reaction was] really positive," Renner says. "I think it's a good step right now for a lot of Ontario breweries."
Taxes on craft
Independent brewers have been lobbying for years to reduce taxes on their industry.
The Ontario Craft Brewers (OCB) organization, of which Sleeping Giant Brewery is a member, says that craft breweries across the province have been saddled by the highest taxes in Canada.
"[The budget] is a game changer for Ontario's craft beer sector and one of the biggest things to happen to the industry in a generation," Scott Simmons, president of the OCB, said in a statement ahead of the provincial budget in May.
In fact, according to the OCB, Ontario's craft beer sector represents more than 80 per cent of all brewing jobs in the province, especially rural and northern communities.
For Brewer, the tax cuts allow Sleeping Giant Brewing to go into the future with more financial headroom.
"It's going to save us a lot of money," he says. "We paid almost $200,000 in beer taxes last year. So, if we're talking about a 50% reduction, $85,000 to $100,000 we're saving."
Taxes on craft brewers in Ontario have had a significant impact on the business.
"Provincially they're about ten times the the federal tax," Renner says. "They definitely play a significant cost in our product."
Making beer is an expensive business and these costs have been spiralling ever since the COVID-19 pandemic.
"Pretty much all of our input costs have gone up significantly since COVID," he says. "[Tax cuts will] definitely offset a lot of that cost for us."
But, in a climate where all materials to distribute beer are costly, it's questionable whether these cuts will bolster Ontario's craft industry.
"We've kept our cost like the same throughout basically from the start of COVID," Renner says. "Our input costs like malt have like gone up almost double."
But, for craft brewers, the cuts represent a step in the right direction for their business, and as Brewer points out,
"Let's celebrate the small victory you get today."
ABOUT THE AUTHOR
With files from Liam Baker and Superior Morning