Restaurant Industry Bracing for Largest Alcohol Excise Tax in 40 years; Calls for a Cap on Escalation

Restaurants Canada, the leading association representing the foodservice industry, is calling on the federal government to reconsider plans to implement a 4.7% increase to the alcohol excise tax. This alarming rate escalation has prompted industry leaders and stakeholders to voice their concerns and plea for the maintenance of a 2% cap on the Alcohol Excise Tax escalator.  

The impact of such a significant tax hike will further strain the restaurant industry. The current circumstances with record high inflation on all costs from food to rent and economic uncertainty, warrant a more cautious approach to taxation policies.  

Restaurants Canada’s most recent data shows 62% of restaurants are operating at a loss or barely breaking even, compared to 10% pre-pandemic – a dramatic increase from 53% in the summer of 2023.  

The economic strain resulting from additional costs like this tax hike cannot be overlooked. Every year this tax adds thousands of dollars to our costs, compounding the inflation challenges faced by our industry.  Restaurant owners can’t afford it, and Canadians can’t afford it. 

“This 4.7% increase in the Alcohol Excise Tax is absurd and will have consequences for the restaurant and bar industry,” warns Kelly Higginson, President & CEO at Restaurants Canada. “We are asking the government to maintain a 2% cap on the Alcohol Excise Tax escalator until inflation returns to the Bank of Canada’s lowered target. This step will provide much-needed predictability, relief, and stability for the industry.” 

“Higher prices forced onto consumers will push our already struggling operators into a corner. We are already witnessing consumers feeling the pinch and pulling back on discretionary spending. Why on earth would the government want to hit us with the 4.7% tax when we are at our lowest point,” said Higginson. 

Restaurants Canada is in lockstep with a coalition of brewers, unions, consumers, farmers, retailers, and hospitality professionals, united in their call for a cap to the alcohol excise tax, to safeguard and ensure a sustainable future for Canada’s restaurant and foodservice industry. 

About Restaurant Canada:

Restaurants Canada is a national, not-for-profit association advancing Canada’s diverse and dynamic foodservice industry. Canada’s foodservice sector is a $110 Billion industry that directly employs 1.2 million people and serves 22 million customers across the country every day.