While non-alcoholic wine and spirits are exempt from federal excise taxes in Canada, non-alcoholic beer has been so far subject to federal excise taxes despite not containing virtually any alcohol at all. This will change.
Budget 2022 which was released today includes an amendment to Canada’s Excise Act removing alcohol excise taxes on beer containing no more than 0.5% alcohol by volume. The duty-free treatment for non-alcoholic beer is consistent with how non-alcoholic wines and spirits are already treated in Canada and how Canada’s major trading partners treat non-alcoholic beer.
“We are pleased that the Government of Canada has removed this unintended barrier to the development and introduction of quality Canadian non-alcoholic beers,” stated CJ Hélie, President of Beer Canada, an organization representing the interests of Canadian brewers and Canadian beer consumers.
Non-alcoholic beer represents a small but growing segment of the global beer market with double-digit annual growth expected as consumers seek greater variety and styles of beer including those containing a broader range of alcohol content. Low and no alcohol beers are an increasingly popular choice for adult consumers on those occasions when they are looking for the great taste of beer, but without the alcohol.
“The elimination of alcohol excise duties on non-alcoholic beer is a good first step, and we look forward to continuing to work with Minister Freeland to modernize Canada’s alcohol excise duty structure and implement further targeted beer tax relief for Canadian consumers, brewers and the broader hospitality sector”, added Hélie