Non-Alcoholic Beer Excise Duty Scrapped

Summary#

This bill ends the federal excise duty on non‑alcoholic beer (beer or malt liquor with not more than 0.5% alcohol by volume). It amends the Excise Act schedule so the duty rate for that category is $0 and clarifies that the next duty tier starts at more than 0.5% up to 1.2% alcohol by volume (Schedule, Part II, s.3; new line for ≤0.5%). The bill does not change sales taxes or provincial/territorial charges.

• Sets the excise duty to $0 for beer at ≤0.5% alcohol by volume (Schedule, Part II, new item).
• Shifts the low‑strength duty tier to apply only to beer over 0.5% and up to 1.2% alcohol by volume (Schedule, Part II, s.3).
• Applies to Canadian‑made and imported non‑alcoholic beer, because the Excise Act duty schedule covers both.
• No date is specified, so the change would take effect on Royal Assent (no delayed coming‑into‑force clause in the bill text).

What it means for you#

• Households

  • Non‑alcoholic beer would no longer include a federal excise duty in its price. Any price change depends on how producers and retailers set prices (Schedule, Part II, new item).
  • GST/HST and any provincial/territorial mark‑ups or deposits still apply; this bill only changes the federal excise duty on beer (bill text amends only the Excise Act schedule for beer).

• Workers

  • Brewery finance and compliance staff would stop calculating and remitting excise duty for products at ≤0.5% alcohol by volume (Schedule, Part II, new item).
  • No direct changes to wages, benefits, or workplace rules. Data unavailable on employment effects.

• Businesses

  • Breweries and importers of non‑alcoholic beer would owe $0 federal excise duty on those products once the bill takes effect (Schedule, Part II, new item).
  • Low‑strength beer over 0.5% and up to 1.2% alcohol by volume would continue to be taxed at the existing low‑strength rate (Schedule, Part II, s.3 as amended).
  • Firms must ensure accurate alcohol‑by‑volume testing and records to show products qualify for the ≤0.5% rate of $0 (Excise Act compliance is unchanged; only the schedule rate changes).

• Local governments

  • No direct impact on municipal taxes or powers. The bill amends only the federal Excise Act schedule for beer.

• Service users (bars, restaurants, retailers)

  • Wholesale costs for non‑alcoholic beer may drop by the amount of the removed duty. Whether savings are passed through to shelf or menu prices is uncertain (Schedule, Part II, new item).

Expenses#

Estimated net cost: Data unavailable.

• The bill reduces federal excise revenue by setting the duty to $0 for beer at ≤0.5% alcohol by volume (Schedule, Part II, new item).
• No appropriation or spending authority is created in the bill text.
• No official fiscal note or government estimate identified. Data unavailable on administrative costs or total revenue loss.

Proponents' View#

• Aligns tax treatment with the bill’s 0.5% alcohol threshold, clarifying that only products over 0.5% are taxed in the low‑strength tier (Schedule, Part II, s.3), and setting $0 for ≤0.5% (Schedule, Part II, new item).
• Removes a federal tax from non‑alcoholic beer, which proponents argue could make lower‑alcohol choices more attractive to consumers (Schedule, Part II, new item). Assumes some price pass‑through; no official estimate.
• Reduces administrative burden for brewers and importers by eliminating duty calculations and remittances for ≤0.5% products (Schedule, Part II, new item). No CRA workload estimate provided.
• Provides clearer compliance by drawing a bright‑line threshold at 0.5% alcohol by volume (Schedule, Part II, s.3; new item).

Opponents' View#

• Lowers federal revenue, with no offset specified in the bill. The size of the loss is unknown due to lack of an official estimate (Schedule, Part II, new item). Assumes current sales of non‑alcoholic beer continue or grow.
• Creates a sharp tax boundary at 0.5%, which could encourage producers to target 0.5% to avoid duty, increasing classification and enforcement checks (Schedule, Part II, s.3; new item). No enforcement cost estimate.
• May distort competition between products at 0.5% (untaxed) and at 0.6–1.2% (taxed), affecting pricing and product design (Schedule, Part II, s.3; new item). Market impact uncertain.
• Consumer benefit is uncertain if producers or retailers do not pass savings through to prices. No data on expected pass‑through.