For Canadians, beer is more than just a beverage – it is a powerful engine of our economy, a source of national pride, a part of our cultural heritage and a social bond. A Léger Marketing poll found Canadians are extremely proud of Canadian beer and how it represents Canada to the world, ranking it in the top tier of all sectors, products or brands.

From coast to coast, Canadian breweries support local, well-paying jobs, drive economic activity and facilitate coming together in positive social gatherings. However, hurricane-level storm warnings are ahead as the brewing industry faces a new set of unprecedented domestic and foreign economic challenges. It is time for Canada’s governments to step up and ensure the future of Canadian brewing for generations to come.

A truly Canadian industry

Few industries are as inherently Canadian as beer and brewing. In 2024, 88 per cent of all beer consumed in Canada was made by Canadian workers in Canadian breweries. Canadian brewers also source 84 per cent of all their inputs from fellow Canadian businesses, workers and farmers. More than 1,300 breweries operate in communities large and small, urban and rural, across the country, directly employing 24,000 Canadians and supporting over 149,000 jobs from agriculture, transportation, marketing, retail and hospitality.

Beer is not just an economic powerhouse – it is a cornerstone of community. Local breweries, taprooms and pubs serve as gathering places and local social hubs where families, neighbours or coworkers connect. Brewers are among the first to step up when their communities are in need. Whether sponsoring sports tournaments, supporting festivals or mobilizing resources in times of crisis – such as producing hand sanitizer during the COVID-19 pandemic or canned drinking water during natural disasters – brewers have always been there for Canadians. Now, they need Canadian governments to meet them halfway.

Canada’s unfair tax burden on beer

The Canadian beer industry is currently taxed at an alarming and unsustainable rate. Nearly 50 per cent of the typical retail price of beer in Canada are taxes – the highest in the G7.

Since the Trudeau government’s 2017 budget, federal beer (and other alcohol beverages) taxes have increased automatically every year due to inflation-indexed increases, rising in total by more than 16 per cent without a single vote in Parliament by elected members. No other food or beverage product in Canada is subject to this kind of undemocratic taxation.

Canada’s major trading partners, including leading beer-producing nations like Germany, do not employ such a punitive and rigid beer taxation system. Other beer-producing nations recognize the value and importance of creating and sustaining a positive investment and operating environment for local brewers. In fact, countries like Japan and the U.S. have decreased their beer taxes in recent years to spur growth, investment and job creation.

At a time when Canadian brewers are grappling with increased costs, supply chain disruptions and nearly unprecedented economic and trade uncertainty, raising federal or provincial beer taxes would be devastating to the sector with ripples across the broader economy.

By addressing both tax reform and trade barriers, governments can foster an operating environment in which Canadian brewers of all sizes and regions are able to compete, invest and succeed.

Unwarranted and unprecedented tariff threats

Canadian brewers buy local whenever possible. However, like many Canadian business sectors, due to integrated supply chains, certain essential materials must be imported. For example, Canada has no aluminum rolling mill manufacturing capacity. Canadian virgin aluminum is sent to the U.S. for transformation into can sheets, the essential precursor to the aluminum beverage can.

The Trump Administration is threatening to impose a 25 per cent import tariff on Canadian aluminum that would be added on top of their threatened 25 per cent across the board (excluding energy) tariffs on Canada and Mexico. With over 80 per cent of Canadian beer sold in cans, these unwarranted tariffs would be another cost increase that brewers cannot absorb.

While it is uncertain whether or to what extent these American tariffs on Canadian goods will materialize, the mere threat has already increased aluminum’s benchmark U.S. Midwest price by over 50 per cent this year.

What governments can do to help

Canada needs a more fair and democratic tax framework for beer. Beer Canada recommends four immediate steps. First, the Canadian federal government must take immediate action with a precautionary “do no harm” approach to protect and support Canadian brewers, beer consumers and the broader hospitality sector. This includes eliminating the rigid, automatic annual indexing of beer taxes, which fuels inflation.

Second, the Department of Finance must also undertake a fundamental review of their approach to beer taxes to encourage the investment required to sustain a healthy and vibrant self-sufficient domestic beer industry. Third, provinces must step up and lower their own fiscal burdens on beer.

Fourth, the federal and provincial governments must work together to eliminate outdated regulations, red tape and facilitate inter-provincial trade of beer. Too many prohibition-era rules add unnecessary costs and complexities for brewers selling in provinces outside of their home-base. A modernized approach to inter-provincial trade would create a more competitive and accessible marketplace, benefiting not just brewers, but Canadian consumers who deserve greater choice and affordability.

By addressing both tax reform and trade barriers, governments can foster an operating environment in which Canadian brewers of all sizes and regions are able to compete, invest and succeed. A strong brewing industry means more jobs, more economic growth and more opportunities for Canadians to enjoy locally-made beer.

Canadian brewers have always been strong, resilient and committed to their communities. However, they cannot continue to grow under an unfair tax system and unnecessary trade barriers. If the government is serious about protecting jobs, supporting local businesses and strengthening our economy, it must act now to level the playing field. It is time for policymakers to recognize the value of the beer industry and take meaningful action to support its future.

Canadian beer is worth fighting for. Let’s ensure it has a future as strong as its past.