THUNDER BAY – Matt Pearson isn’t all that concerned with the federal government’s plan to hike taxes on beer by two per cent.
He’s a little more worried about the plan to tie regular future tax increases to inflation.
Pearson, one of the founders of Thunder Bay’s Sleeping Giant Brewery, said his company can easily afford to absorb the added costs without passing along price pain to consumers.
“The reality for us at Sleeping Giant, this particular tax increase, if we did our exact same numbers this year that we did last year, it would cost us an extra $500,” Pearson said on Thursday.
Broken down by the can or the ounce it barely moves the cost needle, he said.
“It’s almost negligible,” Pearson said. “It’s not a cost we’d ever pass along the consumer.”
Pearson questioned the motives of Beer Canada, which this week launch a campaign encouraging Canadians to complain to their local MPs to axe the tax.
The lobbying organization represents about 50 of the 900 brewers in the country, including Labbatt and Molson.
Because of the volumes those two foreign-owned companies sell each year, the tax increase will hit them harder, decreasing profits taken out of the country dramatically, Pearson said.
“As the Sleeping Giant Brewery here in Thunder Bay, I’m proud to pay that extra $500 in tax because it forces those large, multinational breweries to leave more money in Canada. Right now everything they’re doing is going right out of the country,” Pearson said.
“The more beer money that stays in Canada, I’m all for.”
According to the Beer Canada website, the organization represents companies that produce 90 per cent of all the beer sold in the country, a total of about $14 billion annually.
The campaign points out that beer is already taxed 47 per cent of the cost to brew a bottle of beer and said the new tax hike, set to begin on April 1, severely threatens the industry.
They’re also concerned the automatic escalator, tied to inflation, will see the price of beer continue to rise unchecked.
"Imagine being stuck on an escalator going up and up and up, and you cannot get off, and you cannot make it stop – that's what beer lovers in Canada are facing with this escalator tax. We need people who love beer to help us axe the escalator tax," said Beer Canada chair George Croft, in a release issued on Monday.
At least on that end, Pearson agrees with Beer Canada.
“Building in the automatic increases annually could be a very big problem,” he said. “So I don’t like that aspect of tying it to the rate of inflation. There are not a lot of taxes in our industry that have that automatic increase built in.”
