The owners of liquor stores, restaurants, and bars are considering the impacts that higher taxes on alcohol will have on their businesses. (Photo: Canadian Press)

By Angela Kazmierczak / with files from David Opinko

6.3 per cent Tax Increase

Tax increase on alcohol to take effect April 2023

Feb 9, 2023 | 12:55 PM

MEDICINE HAT, AB – The cost of liquor is set to rise in just a couple of months.

Effective April 1, 2023, the Government of Canada will introduce a 6.3 per cent tax increase on alcohol products.

Statistics Canada reports that, between April 2020 and March 2021, the average adult in Alberta spent $808 on alcohol. Based on this amount, Albertans can expect to pay $50 more per year once the tax hike is implemented.

Hat Liquor General Manager Aaron Janzen says the higher tax rate is making him rethink how the alcohol industry works.

“I feel it’s too much. It’s going to drive customers to find things that are cheaper. It’s going to affect my ability to attract new customers when things already cost as much as they do with inflation,” says Janzen.

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Janzen says the price increase will drive consumers to bigger commercial businesses, especially during a time when people are tight on money.

“A customer who is hurting for money is going to drive [elsewhere] to save 10, 15 cents on the dollar,” said Janzen.

Unlike small businesses, he says commercial businesses are able to get better prices on larger orders.

“Commercial competitors, the big competitors, they can sell at a much cheaper price closer to the cost of product than I can,” says Janzen. “Unfortunately, my mark-up is my mark-up, and I can’t change that.”

Last month, the Government of Canada adopted new guidance from the Canadian Centre on Substance Addiction (CCSA) that shows alcohol consumption is linked with higher risks of cancer, heart and liver disease, dementia, and lower-respiratory infections.

The CCSA states that no amount of alcohol is good for a person’s health, but lowered the “low risk” classification of alcohol consumption from a maximum of 15 drinks per week to two.

READ MORE: Highlights from Canada’s guidance on alcohol and health

According to the Canadian Partnership Against Cancer, higher alcohol prices leads to lower alcohol consumption. They state that higher alcohol prices and taxes are important in combating consumption and harms, like cancers.

Pattison Media spoke with several residents in Medicine Hat to get their thoughts on the tax increase on alcohol.

“Most people are probably going to keep drinking,” says one resident.

Another resident says they “still consider [alcohol] a luxury. It’s not a necessary thing, so if you pay taxes on it, it’s something you choose to do – that’s fine. I don’t like the fact that everything’s going up. Liquor is just one of them – I’d rather see the liquor prices up, then the gas prices.”

Pattison Media also heard from a resident that they “don’t think the people that sell it are making much money, really, because the government controls the import costs, in terms of them buying it.”

READ MORE: New alcohol recommendations could speed up changing drinking habits, businesses say