Ontario Government Puts a Stop to Built-In Tax Hike on Beer and Wine for Another Year
The Ontario government is committed to maintaining the tax on beer and wine prices, despite an impending federal tax increase on alcohol this spring.
The province has announced that the beer basic tax and Liquor Control Board of Ontario (LCBO) mark-up rates, which were set to increase by about 4.6 percent on March 1, will remain frozen for the next two years. According to the government, this move will result in approximately $200 million in relief, and the prices will be frozen through March 1, 2026.
The beer basic tax and LCBO mark-up rates are built into the price of products on store shelves, rather than being seen as an added tax on receipts.
This tax freeze comes shortly after the province’s decision to allow beer, wine, cider, coolers, seltzers, and low-alcohol drinks to be sold in convenience, grocery, and big-box stores starting January 1, 2026.
Peter Bethlenfalvy, the Finance Minister, emphasized that this tax freeze will offer choice and convenience to consumers while providing stability for the alcohol and hospitality sectors.
Federal Alcohol Tax Increases April 1
Despite calls to cancel it, the federal government will increase its tax on alcohol by 4.7 percent beginning April 1. According to a report by the Canadian Taxpayers Federation, this tax increase will cost Canadians around $100 million. Currently, taxes make up approximately 50 percent of beer prices, 65 percent of wine prices, and over 75 percent of hard liquor prices.
The tax, known as an “escalator tax,” is automatically increased at set intervals without debate or vote in Parliament. Previously, approval from the House of Commons was needed before the tax could be increased.
Tory MP Tracy Gray called on the Liberals to halt the tax hike, asserting that it will take an extra $100 million out of Canadians’ pockets in 2024–25.
Beer Canada has also criticized the upcoming tax increase, stating that it will make life more expensive for Canadians.
