On February 28th, Alberta-based liquor licensees received a bulletin from Alberta Gaming Liquor and Cannabis (AGLC) informing us that as of April 1st, additional taxes will be applied to what they bizarrely refer to as “high end wine”. There was no prior consultation with importers, retailers and restaurateurs, nor did the bulletin announce why the egregious increases in taxes were being implemented.
Traditionally, all wine sold in Alberta has been subjected to a flat tax of $4.11 per litre, or $3.08 per 750mL bottle. This flat tax has been increased by 15 cents per bottle, and an additional ad valorem tax will be added to “high end wine” — namely, a wine that wholesales for $15 per litre ($11.25 per 750mL bottle) and higher… High end indeed! This would be like applying an ad valorem tax to “high end” cheese and defining that as anything that exceeds the price of Cheez Whiz.
The additional impending taxes will work upon a complicated three-tier scale. The details of its structuring can be found here, along with a helpful explication of the financial impact that this will have on you, the final consumer.
Here’s a few things to keep in mind:
If you’re the kind of wine drinker who enjoys bottles that currently cost more than approximately $16 at a retail shop, you will soon be paying more for your wine, and exponentially more if you enjoy “truly” high end wine.
Wine producers, importers, retailers and restaurateurs will not financially benefit in any way from this new “hidden” tax. When you’re soon forced to either pay more for the wines you’re accustomed to drinking, or to compromise the quality that you’re used to in order to adhere to your budget, please do not blame the producer or the purveyor.
Perhaps unintentionally, this tax kicks in at a pricepoint whereby the wine in question might be made by an individual, a family or a small independent business who farms their own vineyards. Any wine inexpensive enough to avoid the new taxes can only be the result of industrial farming and winemaking.
For the same reasons, this new tax penalises those who wish to support wines that have been grown and produced in a way that’s friendly (or at least not actively deleterious) to the environment.
This tax exclusively impacts wine as a category, which strikes us as unfair but also very odd, as “high end wine” — as the AGLC calls it — is certainly the category of alcoholic beverage that’s least likely to be abused. In other words, the tax penalises a significant portion of drinkers who consider wine to be a compelling beverage for reasons beyond its potential for intoxication.
It may sound elitist, but it has to be said that this tax penalises wine drinkers with good taste.
Alberta’s climate precludes us from producing our own wine, and our provincial wine industry therefore relies on imports. We are already burdened with the highest shipping rates that we’ve seen in our careers, a weak Canadian dollar and the dizzying inflation that’s ubiquitous to all industries. This new tax would never be welcomed with open arms, but the Alberta Government’s timing is perplexing, insulting and potentially debilitating for those of us who love authentic wine.
If this new tax is as infuriating to you as it is to us, please voice your opinion to the Ministry of Service Alberta and Red Tape Reduction at ministersa@gov.ab.ca.
Sincerely,
Your friends at Metrovino
UPDATE:
If you’ve already issued a personal letter to the Honourable Dale Nally, Minister of Service Alberta and Red Tape Reduction, we appreciate it more than words can express. If you’ve yet to do so, we’ve now made it much easier as all you have to do is click “submit petition”, paste the text, sign your name, and send off the email (which will include Premier Danielle Smith in carbon copy). Below you can see the content of the petition.
(Copy and paste the text below to the email)
Dear Honourable Dale Nally, Minister of Service Alberta and Red Tape Reduction,
I am writing to express my strong opposition to the recently announced ad valorem tax that is scheduled to come into effect in our province on April 1, 2025. As an Albertan who values quality products and the option of supporting small, specialty businesses, I find this decision to be significantly harmful to consumers, businesses and the hospitality industry at large.
The fact that Alberta Gaming Liquor and Cannabis (AGLC) is referring to this tax as one that will be applied to “high value wine” is seriously misleading. Considering that it affects wine that retails for $16 per bottle and higher, a more realistic and disturbing way of viewing the new tax is that it initiates at a price point whereby the wine in question might actually be made by an individual, a family or an independent business that farms their own vineyards. Such wine producers are more likely to adhere to a minimum of environmental and ethical standards — be that sustainable or organic farming, providing workers benefits or compensating their employees with a living wage.
Any wine that’s cheap enough to avoid these taxes is certainly the result of industrial farming and winemaking. Furthermore, Canada is an expensive country to farm wine grapes, so this tax will apply to any Canadian wine product that’s made from Canadian-grown fruit. It thereby can’t be said that the impetus behind all this is to favour our domestic production. By increasing the tax burdens on wines that cost enough where the aforementioned considerations come into play, the Alberta government is penalising those who take these and other issues into account in regards to their buying decisions.
Perhaps the most ill-conceived aspect of the new taxes is that they exclusively target wine, an unorthodox and unfair approach that suggests a fundamental misunderstanding of the liquor industry as well as customer behaviour. “High value wine” — as the AGLC refers to it — is undoubtedly the category of alcoholic beverage that’s least likely to be abused. As a result, these changes penalise a significant portion of drinkers who consider wine to be a compelling beverage for reasons beyond its potential for intoxication.
Since its privatisation in 1993, Alberta’s wine industry has been the most vibrant, intrepid and dynamic in the country, boasting a selection of purveyors and products that would impress any wine lover lucky enough to be immersed in it — either as a resident or a visitor. By minimising government involvement and leaving purchasing, distribution and sales decisions to professionals, our wine industry — and therefore our restaurant industry — has played a key role in attracting tourists and money to our province.
As tends to happen in an open marketplace, massive companies have come to proportionately dominate the wine and restaurant industries in Alberta. But what keeps these industries exciting and cutting edge on a global level are the smaller and independent operators (importers, retailers and restaurateurs) who inevitably specialise in precisely the kinds of wines that will be subjected to the new tax structures. Isn't the point of a privatised liquor industry to foster this kind of creativity? Overnight, the proposed taxes will undermine the potential of these Alberta businesses to be competitive, and sadly, they will be the first to disappear when consumers are forced to either buy less wine than they did before, compromise the quality of the wine they’re accustomed to, or to seek alternative alcoholic beverages that aren’t subjected to the new taxes.
Alberta’s climate precludes us from producing our own wine from grapes, and therefore our provincial wine and restaurant industries rely on imports. These industries are already burdened with record high shipping rates, a weak Canadian dollar, massive increases to Liquor Connect storage fees, the sudden advent of tariffs and the dizzying inflation that’s ubiquitous to all industries. This new tax would never be welcomed with open arms, but the Alberta Government’s timing is perplexing, imprudent and potentially debilitating for those of us who love authentic wine — and particularly to the numerous small and independent businesses who purvey it.
I urge you to reconsider this policy before it goes into disastrous effect on April 1st, 2025.
Sincerely,
