Signal49’s findings are clear: Canada’s automatic beer excise tax escalator is not working as intended. Since the policy was introduced in 2017, the federal excise tax on beer has increased by approximately 20 per cent. Yet, federal beer excise revenues have remained essentially flat since 2020.

“Automatically increasing taxes every April, without a vote in Parliament, also fails to account for changing economic conditions, pressures on Canadian brewers, or the affordability challenges facing consumers and the bars and restaurants that serve them. At a time when Canadian businesses are being asked to invest, grow and create jobs, automatically increasing one of the taxes they pay makes little economic sense,” said Richard Alexander, Beer Canada president.

The federal government has already recognized the escalator’s shortcomings by intervening to limit its impact in five of its first 11 scheduled increases. A tax mechanism that repeatedly requires government intervention needs to be reconsidered. Canada is also an international outlier. It is one of only three Organisation for Economic Co-operation and Development (OECD) countries that automatically index beer excise taxes, whereas other OECD countries set excise rates through legislative or budgetary decisions.

Beer is an overwhelmingly Canadian-made product. Approximately 90 per cent of the beer sold in Canada is brewed here, supporting Canadian workers, farmers, communities, restaurants and businesses across the country.

Budget 2026 allows the federal government to fix a policy that is not delivering its intended results. The automatic beer excise tax escalator should be permanently repealed, and future changes to beer excise taxes should once again be subject to transparent government and parliamentary review.

The full Signal49 Research report is available here.