‘Trying to find efficiencies everywhere’: Local pubs react to federal alcohol tax hike

On Wednesday, federal taxes on alcohol increased by two per cent, adding more strain on bars and pubs including in Simcoe County.

The federal alcohol tax hike is no April Fools joke.

On Wednesday, federal taxes on alcohol increased by two per cent, adding more strain on bars and pubs across the country, and Simcoe County.

At the Bull and Barrell Pub in Barrie, Yvette Wicksted, owner, says her establishment has seen increased foot traffic over the past several years, bit rising costs, such as the hike have flattened sales.

“They have to pass it on to us and then we have to pass it on to our customers,” said Wicksted. “I’ve tried not to increase my prices, I try to give everybody a break but I’m trying to run a business here. I have to tick them up.”

Other restaurants confirmed that they had to increase their prices to keep up with expenses.

“Obviously we have to keep our costs in control when these kinds of things happen and stay in budget,” said David Ritch, general manager of State & Main Barrie. “A lot of the time that means a price increase for our customers here.”

In 2017, the Liberal government introduced legislation for excise alcohol taxes to automatically increase with inflation on April 1st of each year without parliamentary approval.

Since 2023, that annual hike has been capped at two per cent in an attempt to flatten costs.

According to the Ontario Restaurant Hotel and Motel Association (ORHMA), this year’s hike will add nearly 14 million dollars to the industry tax burden.

“Three quarters of a price of beverage alcohol product is made up either of provincial federal taxes or markup fees,” said Tony Elenis, ORHMA President and CEO. “There’s not much going to the end-user.”

That leaves restaurants left with either continuing to raise prices or hoping for other revenue opportunities on their menus.

“You name it. I’m trying to find efficiencies everywhere,” said Wicksted. “Government hasn’t really recognized that small business is a huge part of the engine of this economy.”

The federal government confirmed on Wednesday that the two per cent cap will be extended for another two years, and the excise duty rate on the first 15,000 hectolitres of beer brewed in Canada will remain cut by half.

With files from The Canadian Press