Rising Alcohol Taxes in Canada: In 2023, Canadians can add spirits to the list of items that will be more expensive due to some of the highest inflation rates in decades.
There are ways to save money without giving up alcohol, though you may need to be strategic about where and how you spend money on booze.
Rising Alcohol Taxes in Canada
The price of spirits in Canada will increase on April 1, 2023, due to a levy increase implemented by the federal government. The increase is due to the 2017 implementation of an annual escalator excise tax. The escalator tax enables the federal government to increase alcohol taxes in response to inflation.
In June 2022, the Canadian inflation rate reached its highest level in 39 years. Although it has since decreased, the elevated cost of products and services in the United States continues to place a strain on consumer finances. And this alcohol tax increase will make visits to the liquor store more expensive.
Alcohol excise duties were projected to increase by 6.3% in April, but the federal budget for 2023 proposes a temporary limit of 2%. The potential ceiling will remain in effect for one year, pending ratification of the budget.
This alcohol tax increase may not affect your next liquor store purchase. Not by much, at least.
Alcohol excise duty rates are adjusted annually to account for inflation, according to an email from Adrienne Vaupshas, press secretary for the Office of the Deputy Prime Minister and Minister of Finance. The 6.3% increase in April 2023 would amount to about three-quarters of a cent ($0.0078) per 355 mL can of beer.
Three ways to save money and purchase alcohol on the cheap
Despite alcohol tax increases and high inflation, there are creative methods to save money on alcoholic beverages.
If you believe that traversing a provincial border is the solution, you are mistaken. Alcohol taxes vary by province, with variable flat-rate and percentage-based surcharges based on spirits type, volume, and other factors. This makes it difficult to determine whether you will pay more or less when purchasing alcohol in a different province.
To save money on alcohol, search for lower-priced brands, duty-free discounts, and drink specials at bars and restaurants.
1. Skip the premium spirits
Method of production, age, and location frequently play a significant role in determining the price of alcoholic beverages. Typically, vintage wines are more expensive than newer wines. Craft and imported beers are more expensive than domestic draughts. Spirits vary in price, and if you do not intend to consume them neat, you should opt for a less expensive container.
2. Shop at a duty-free store
Alcohol, jewellery, tobacco products, fragrances, and other souvenirs are sold in duty-free stores, which are exempt from import, sales, value-added (VAT), and local taxes. Significant savings opportunities exist at duty-free shops, particularly when purchasing heavily taxed items such as alcohol.
The price differences between the government-owned and -operated Liquor Control Board of Ontario and the Duty-Free establishment in Fort Erie, Ontario are sufficient evidence.
Due to the prevalence of duty-free stores at international land borders and airports, opportunities to take advantage of tax-free savings may be limited. However, the next time you travel internationally, set aside some time to peruse the duty-free goods for the possibility of significant savings.
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3. When dining out, seek out drink specials
Expect to pay more when dining out for intoxicating beverages. In Ontario, you may find yourself paying double (or even more) for a bottle of wine in a restaurant. If you would like to partake in a few alcoholic beverages while out on the town, search for happy hour deals and the like. Depending on the time of day or day of the week, some restaurants offer discounted drink specials, such as half-off bottles of wine or two-for-one cocktails. The savings may be well worth the planning required to take advantage of these bargains.
