Alberta government walks back beer tax hike citing tariffs, need to support business

EDMONTON — Alberta’s government has ditched a new fee schedule for breweries that would have seen the province’s oldest beer maker pay significantly more in taxes.

The schedule, introduced in February after Alberta tabled its budget, substantially lowered the production threshold breweries needed to meet before they paid the highest fee to the government, while also adjusting the production limits and fees building up to the cap.

Before the change, breweries were able to produce 400,000 hectolitres — or 40 million litres — before they paid $1.25 per litre, which is the cap. The schedule in February lowered that threshold to 18 million litres.

Service Alberta Minister Dale Nally said at the time the lower limit would even the playing field for small breweries and that “99 per cent” of companies wouldn’t pay more.

Calgary-based Big Rock Brewery, Alberta’s oldest and biggest craft beer producer, was one of the few that didn’t fall under the 99 per cent. The company calculated it was going to pay about $1.4 million more to the government in fees every year.

In a statement Thursday, Nally’s office said the government has abandoned the new fee schedule and installed again a higher production threshold and more gradual fee increases beneath it.

“In light of the impacts of U.S. tariffs, continued trade uncertainty and the importance of working collectively as a country to support Canadian businesses, additional adjustments to the small brewer markup rates are needed,” said Nally’s press secretary Brandon Aboultaif.

“We are increasing the threshold to qualify for reduced markup rates and making the transition to the standard markup rate more gradual as small brewers continue to grow their businesses.”

Aboultaif didn’t answer questions about whether the change was made in light of the disproportionate impact the schedule was having on Big Rock or if the system wasn’t protecting small brewers as Nally had said it would.

As of June 1, the production limit has been raised to 30 million litres, and Aboultaif said the fee ladder is more gradual. This means the vast majority of Alberta breweries won’t pay as much per litre of beer they make.

Brad Goddard, vice-president of business development and government relations for Big Rock, lauded the reversal. He said it came after productive conversations that Big Rock had with Nally, the provincial liquor regulator and other government ministers.

Goddard added the change couldn’t have come at a better time.

“Every week of summertime beer sales — this makes our year,” said Goddard. He explained companies pay the fees as they produce, so when Big Rock and others kick-start production for summer, they’ll be paying the lower rate.

Goddard said it’s also a timing win, because this week U.S. President Donald Trump hiked tariffs on aluminum to 50 per cent from 25 per cent.

“The Alberta government took a step that will help us navigate those challenging tariff waters, and for that I’m very grateful,” he said, adding aluminum cans are one of Big Rock’s biggest input costs.

“This reduction in the markup will help us manage that at a really key time.”

Even though the outgoing fee schedule was in place for three months, Goddard said the company paid roughly $400,000 more in provincial taxes than it would have before.

He said the company isn’t dwelling on the hit, as the government’s reversal is “largely a restoration of some of the previous opportunity.”

Beer Canada, which represents breweries of all sizes, had celebrated the February schedule, describing it at the time as a step towards equity for “truly smaller scale craft brewers” in Alberta.

The agency’s five board of directors are all executives for some of the largest beer companies in the country, including the president of Molson Coors Canada.

Beer Canada’s vice-president of strategic communications, Karine Cousineau, said in an email the group understands Alberta’s reasoning for a reversal but it still wants to see the province implement “permanent broad-based beer tax relief for all Canadian brewers, our hospitality partners and Alberta beer consumers.”

The executive director of the Alberta Small Brewers Association, Blair Berdusco, said the group is more than happy to see the turnaround.

“(It) definitely improves the future outlook for the industry and potential for how breweries can continue their brands going forward.”

Berdusco said the 30 million-litre threshold is a win for the industry compared to what was in place, especially since the association and other craft brewery groups across Canada are pushing for all provinces to follow Saskatchewan in having a 50 million-litre limit.

“It’s great to see that (Nally) took a look at what’s going on and has recognized the value in trying to make things more equal and more alike across provincial lines,” Berdusco said.

This report by The Canadian Press was first published June 5, 2025.

Jack Farrell, The Canadian Press