B.C. craft distilleries are calling on the federal government to lower taxation on distilled alcohol to help stimulate the local economy, and one local Osoyoos distillery is helping lead the charge.
The Craft Distillers Guild of B.C. sent out a press release last week asking Members of Parliament with craft distilleries in their ridings to put pressure on the federal government to lower excise tax on their products. The Guild is asking for Canada to mirror the U.S., who lowered excise tax on distilled products in 2017, allowing for growth within the industry.
Canadian distillers currently pay $6.30 in excise tax per 750 ml bottle of alcohol, as of April, 2020, which increases each year. American distillers pay only $0.885 per bottle, while wine, beer and even cigarettes carry substantially lower rates.
Mike Green is the co-owner of Tumbleweed Spirits in Osoyoos. He belongs to the Guild and supports the movement to lobby the government for a change in the tax.
“It’s totally unfair compared to other craft liquor industries, you know we’re just getting basically taken advantage of for no apparent reason,” he said in a phone call with the Times-Chronicle.
Green and his wife, Andrea Zaradic, opened Tumbleweed four summers ago. Their business has grown, but they are limited because they are not able to hire full time staff to help produce, market, and grow the brand.
Green believes that a reduction in the excise tax would be a huge help for his craft distillery and others all around the province.
“When you have lower taxes it allows you to employ more people, you have better service, you have better profit margins, you can increase the customer experience when they come to your tasting rooms,” said Green. “It’s a huge impact on our little business.”
Green believes this is especially important now, when many in the local economies are struggling due to shut downs and slower business during the pandemic. He had to close his doors for two and a half months during the Spring.
A regular supporter of the local agricultural economy in the Okanagan, Green and the Craft Distillers Guild say this issue goes well beyond just small batch distillers.
“The thing is, most of our alcohol is made from grain. The craft license that we have in British Columbia stipulates that we have to buy grain from local British Columbia farmers,” said Green.
For his small operation, that means buying grain from a farmer in Rock Creek, corn from a farmer in Vernon who grows especially for Tumbleweed, barley from Salmon Arm, cherries and apricots from farmers in Oliver, berries from the Fraser Valley and even wine from local winemakers.
Green and the other members of the Craft Distillery Guild of B.C. maintain they are supporters of local producers and provide a number of jobs in communities that need them.
The press release on the matter stated that when excise taxes on distilled alcohol was lowered south of the border, the industry exploded.
“It worked fantastically well in the U.S., with almost 1,000 new distillery upstarts since its implementation and tens of thousands of jobs created,” said Tyler Dyck, president of the Craft Distillers Guild. “This is something everyone can stand behind regardless of party membership, especially considering that we all need to stand with our domestic entrepreneurs if we are to survive the economic fallout from the Covid-19 pandemic.”
For Green and his wife, lessening the taxation burden could be the difference between their business thriving or struggling to get by.
