SoVote

Context: House Hansard - 171 - Mar/22/23

Mr. Todd Doherty (Cariboo—Prince George, CPC)

Mar/22/23 8:39:30 p.m.
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Madam Speaker, I appreciate our colleague across the way, but I do not think that he understands that every time they raise the costs for small business owners of doing business, there is a direct impact. Restaurants Canada has said that this tax increase would cost individual restaurants more than $30,000 per year on average. That is one staff member. That is a full-time equivalent or maybe a couple of part-time employees. These small business owners are going to have to make decisions on whether they hire students or more staff. These tax increases cost small business owners. They are so out of touch. Has this colleague ever run a small business? Does he understand that small business owners are now making decisions on whether they are going to keep the doors open or they are going to close? A tax increase of this magnitude is not just a cent on one can of beer; it has a very real human cost—

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The Assistant Deputy Speaker (Mrs. Alexandra Mendès)

Mar/22/23 8:40:34 p.m.
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The hon. member for Vaughan—Woodbridge.

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Mr. Francesco Sorbara

Mar/22/23 8:40:37 p.m.
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Madam Speaker, it is great to see the hon. member for Cariboo—Prince George in the House. I know that area of the world very well, and it is great to see my friend. The over 18,000 small businesses that exist in the city of Vaughan have no greater champion than I, as their member of Parliament for the last seven years and before then. My relationship with the Canadian Federation of Independent Business, Restaurants Canada and all those stakeholders that the member mentioned is second to none. I have been a vocal champion for them. I have one of the largest wineries and winery operators in my riding. I meet with them regularly. I know the issues well. I chair the wine caucus here in Ottawa, and I continue to advocate for the issues that impact all sectors of the economy, especially the one—

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The Assistant Deputy Speaker (Mrs. Alexandra Mendès)

Mar/22/23 8:41:26 p.m.
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I have to go to questions. The hon. member for Rimouski-Neigette—Témiscouata—Les Basques.

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Mr. Maxime Blanchette-Joncas (Rimouski-Neigette—Témiscouata—Les Basques, BQ)

Mar/22/23 8:41:32 p.m.
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Madam Speaker, I am very proud to represent the people of Rimouski‑Neigette—Témiscouata—Les Basques, but I am most proud of their expertise. I am proud of those individuals and entrepreneurs who are successful and who contribute to my region's economic development. Specifically, I am talking about the people who make beer, so microbreweries and microdistilleries. The motion we are discussing today mentions this sector. We are talking about people who get up every morning to grow our regional economy, develop their expertise and know-how and put our beautiful region on the map. Currently, we have a government that, despite the current context of inflation, intends to increase taxes on their products. That in the very antithesis of what the government claims to be doing, which is helping those who really need it. I invite my colleague from Vaughan—Woodbridge to call alcohol producers in his neck of the woods, specifically microdistillers and microbrewers, and ask them whether they agree with the excise tax increase. After talking to my constituents, I can say that they are totally—

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The Assistant Deputy Speaker (Mrs. Alexandra Mendès)

Mar/22/23 8:42:48 p.m.
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I must give the member a chance to respond. The hon. member for Vaughan—Woodbridge.

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Mr. Francesco Sorbara

Mar/22/23 8:42:54 p.m.
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Madam Speaker, I want to thank my colleague for his question. It is very important to talk about the people who get up every morning and do that job. Those entrepreneurs who have actually made a success of our wine, craft brews and beer sectors in Canada and those individuals who created the wineries, whether in Quebec, Nova Scotia or in southern Ontario in the Niagara area, are individuals who took risks, created jobs and created wealth. I applaud them, and I will always advocate for them. One of the reasons I ran for office was to ensure that we have a strong economy, because we know that the economy we inherited from the Conservatives was not going anywhere. We turned it around, and we are going full steam ahead.

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Ms. Lori Idlout (Nunavut, NDP)

Mar/22/23 8:43:40 p.m.
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Uqaqtittiji, many other MPs have discussed beer distilleries in their ridings; Nunavut has one as well, NuBrewCo. This is a brewing company in Iqaluit, and it is already taxed territorially. I am concerned that this small distillery in Iqaluit will be impacted heavily by the taxes that are being proposed, and as such, I will be supporting the Conservative motion. Can the member talk about how the government will make sure that small distilleries like NuBrewCo will continue to get the federal support needed to keep operating?

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Mr. Francesco Sorbara

Mar/22/23 8:44:36 p.m.
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Madam Speaker, I know that our small business minister, the member for Markham—Thornhill, and the parliamentary secretary are working very hard to grow our small businesses. I encourage the member for Nunavut to reach out to these two individuals and me. We will obviously assist in any way possible. We will ensure that small brewers, big brewers and our wine and beer industry across Canada continue to grow, continue to foster and—

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The Assistant Deputy Speaker (Mrs. Alexandra Mendès)

Mar/22/23 8:45:05 p.m.
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Continuing debate, the hon. member for Joliette.

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Joliette

Mr. Gabriel Ste-Marie (Joliette, BQ)

Mar/22/23 8:45:08 p.m.
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Re: Bill C-19

Madam Speaker, I will be sharing my time with the hon. member for Abitibi—Témiscamingue. As members know, unlike sales tax, which represents a percentage of the value of a product, the excise tax on alcohol is a fixed amount by volume as set out in the Excise Tax Act. Traditionally, that amount was occasionally reviewed and adjusted to inflation through an amendment to the act. However, since 2017, the act has included an automatic indexing formula, which means that the amount of the excise tax goes up every year based on inflation. That is why the excise tax on alcohol is going to increase by 6.3% on April 1 to reflect the high level of inflation we have seen over the past year. Today's motion will not actually have a very big impact. We are talking about 1¢ per can of beer. This motion is not a real response to the increased inflation that is driving up the price of food in particular. This is a clear example of the populism of the Conservatives who are more interested in coming up with gimmicky slogans than they are in developing serious public policy. Furthermore, when it comes to beer, only large breweries will benefit from the adoption of today's motion. Given that microbreweries only pay a fraction of the excise tax, they will benefit far less from a freeze on the tax rate. Of the 1,200 breweries in Canada, including the more than 300 in Quebec, only 12 pay the full amount of the excise tax on the majority of their production. Most of these 12 breweries are owned by foreign multinationals. The decision to apply a different tax rate to microbreweries, the artisans who are passionate about agri-food living in every region, was implemented in the 2006 budget after the Bloc Québécois advocated for it for years. The Bloc Québécois has been fighting for our microbreweries for a long time. That decision would give them the opportunity to compete against the giants of the industry, whose production costs are much lower thanks to economies of scale. Since the implementation of the preferential rate, the number of microbreweries has skyrocketed and increased eightfold to our great pleasure. For a small artisanal microbrewery, indexing the amount of the excise tax might only represent a 0.1¢ or 0.2¢ increase per can. We are talking about that very small amount today. This means that when we buy a 12-pack of beer, we would pay an additional amount of just a little over 1¢. In budget implementation Bill C‑19 from spring 2022, the Bloc Québécois managed to extend to cider and mead producers the same support that had been extended to microbreweries 15 years ago. They are now completely exempt from the excise tax. Our support for small local producers is not limited to microbreweries. Unfortunately, since the government has a very restrictive definition of cider and mead, the producers who flavour their products with berries and aromatics continue to pay the tax. That is something we really hope to see resolved in the next budget, just like the application of the tax on wine made from other fruit such as pears, blueberries or even maple, which showcases our land. They should be treated the same way as our apple cider producers. For hard alcohol, we are talking about an increase of roughly 25¢ for a 750-millilitre bottle. Again, we are not talking about a catastrophic increase, but it adds to the overall price increases. With respect to spirits, frankly, the Bloc Québécois would have preferred that the Conservatives propose applying to microdistilleries the model that is already in place for microbreweries and impose only a fraction of the tax that is required of the industry giants. That would have a much greater impact. It would come down to about $3 per bottle rather than the meagre 25¢ that is being discussed today, but it would apply only to our small local producers. We hope the government listens carefully to what the Bloc Québécois is saying and will take it into account in its budget next Tuesday. Our small producers are suffering, struggling to compete with the industry giants. As I said before, they would benefit greatly from a more targeted measure. Unfortunately, that is not what today's motion proposes. It has very little impact on consumers. On every one of their opposition days, the Conservatives come back with their mantra: We need to lower taxes, cut EI by lowering the premium rate, cut retirement income by lowering the pension contribution—which also has an impact in Quebec, because the Canada pension plan and the Quebec pension plan are harmonized. They keep coming back to the idea of eliminating pollution pricing to pander to the oil companies. Today's motion, while not intrinsically bad, is along the same lines and does not represent a real plan to fight inflation. We are talking about 1¢ for a can of beer or 25¢ for a $40- or $50-bottle of spirits. This is not the end of the world, especially considering that alcohol represents only 4% of the average household's market basket. Skyrocketing housing and food prices are crushing Quebeckers and Canadians, especially those living on modest or fixed incomes. Measures that address the causes and effects of inflation would be much more useful than today's motion, which will have an essentially marginal impact on consumers. However, we do recognize that it could have a greater impact on restaurant and bar owners, who have been profoundly affected by the COVID‑19 crisis. As members are well aware, the Excise Act does not just determine the amount of the excise tax. It also determines the terms and conditions for the sale of alcohol. Along with the Importation of Intoxicating Liquors Act, it states that only the government of a province can import or distribute alcohol. Quebec or the province can delegate that responsibility to a private importer or distributor by granting them a licence, but the province holds the exclusive power to govern the importation and trade of liquor on its territory. The fact that international trade is an area of federal jurisdiction is incongruous, and I am going to talk briefly about the history behind that. Canada's first referendum took place in 1898. In the late 19th and early 20th centuries, many Protestant churches, particularly Baptist churches, were strongly advocating for the prohibition of alcohol. These prohibitionist movements were active in the United States and English Canada, just like in Lucky Luke. The Canadian plebiscite on the prohibition of alcohol, which was held on September 29, 1898, was on the passage of a law prohibiting the importation, production and sale of alcoholic beverages across Canada. This law on prohibition would have taken the form of an amendment to the Criminal Code. The yes camp won by 51.2% to 48.8%. It was a tight vote, but the yes camp won. However, the referendum exposed an important cultural divide in Canada. Every province except Quebec voted yes, but opposition to prohibition in Quebec was massive: 81.2% of the population voted against it, as they did in the case of conscription. The opposition was not only massive, but it was also very acrimonious. The members from Quebec in the House of Commons stated that they could not vote for a prohibition law because their families and communities would never forgive them. The prime minister at the time, Wilfrid Laurier, noted that there was a cultural divide between Quebec and English Canada on this issue. He felt that the federal Parliament did not have the legitimacy to legislate, which would amount to imposing the decision of the majority on the minority that wanted nothing to do with it—the French Canadians at that time—even though it had the constitutional power to do so. I hope the government is taking notes. It must not take unilateral action, and it should tell every province and Quebec to manage their own jurisdiction. That is how it was during the first years of Confederation. Instead of introducing legislation imposing prohibition across Canada, it chose to amend the laws on the importation and trade of alcohol and leaving it up to the provinces to regulate. That is why still today that responsibility falls to the provinces. Of course, this creates some inconsistencies, such as the ban on transporting alcohol from one province to another, which prohibits a resident of Ottawa from bringing home a bottle that he may have purchased at the liquor store in Quebec. However, the principle is interesting: If there is a difference between Quebec and Canada on a given topic, then the federal Parliament should refrain from imposing a blanket solution that applies indiscriminately from coast to coast to coast. I hope that the government and my colleagues from English Canada are listening carefully to this history lesson. I hope they will draw from it and stop imposing the will of Canada on Quebec when there is a difference of opinion, and delegate the powers. To my colleagues, I would say, “a word to the wise”.

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Mr. Mark Gerretsen (Parliamentary Secretary to the Leader of the Government in the House of Commons (Senate), Lib.)

Mar/22/23 8:54:59 p.m.
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Madam Speaker, I listened to the member's speech, and in particular the part where he talked about the various other issues that are genuinely impacting the daily lives of individuals throughout our country, such as inflation and the rising cost of food and other items. However, we are standing here talking about an excise tax increase that does not even add one cent per can of beer, as we heard previously. I am wondering if the member has any insight into why he thinks the Conservatives chose this as their opposition day motion when we could have been talking about some very important issues, some of which the member mentioned.

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Mr. Gabriel Ste-Marie

Mar/22/23 8:55:47 p.m.
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Madam Speaker, I thank my colleague for his question. Obviously, I will let the Conservative Party explain its reasons. To answer the question on inflation, there are a number of elements. We can think, in particular, of social housing, which should be better funded. In the budget being tabled by the minister next Tuesday, we hope to see significant funding allocated to social housing to ensure change, even if only at this level. To come back to the excise tax, I hope that my colleague will be able to speak with his cabinet colleagues. We would like to have the same model for microdistilleries as for microbreweries, namely a progressive excise tax to allow small players to enter the market and compete with the giants.

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Mr. Simon-Pierre Savard-Tremblay (Saint-Hyacinthe—Bagot, BQ)

Mar/22/23 8:56:39 p.m.
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Madam Speaker, I thank my colleague from Joliette for his speech. The historical part of his speech was particularly powerful and interesting. As he said, I hope the government is taking notes. There was a time when Canada considered that fifty plus one was a majority in a referendum. That was often the case over the course of democracy's history. It is an interesting point, and the government should remember it as well. With respect to this idea of applying the microbrewery model to microdistilleries, can my colleague explain, in concrete terms, how that would really help them?

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Mr. Gabriel Ste-Marie

Mar/22/23 8:57:19 p.m.
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Madam Speaker, historically speaking, we have seen that the excise tax on alcohol is quite high, in general. In the early 2000s, the Bloc made a proposal to encourage new players like local craft producers and microbreweries. The idea was to reduce this tax by 10 and then increase it progressively as the microbrewery grew, increasing its sales and production. It would pay 20% of the tax, then 30% of the tax, and so on until its production levels could compete with the industry giants. Today, we are proposing that the government do this with microdistilleries. It is a booming sector. Reduce the tax by 10 for the small players, and then raise it gradually. That would put a little more craft in our lives.

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Mr. Peter Julian (New Westminster—Burnaby, NDP)

Mar/22/23 8:58:20 p.m.
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Madam Speaker, I have a question and a comment from the Rheault Distillery in the riding of Algoma—Manitoulin—Kapuskasing, in northern Ontario. A minister said that there is a graduated system for the excise tax on beer, but as the member is well aware, the reality is that the government forgot about small distilleries. No matter what volume is produced, whether it be 1,000 litres or a million litres, all distilleries pay the same tax. Does the member agree that the graduated system that is used for breweries should also apply to distilleries?

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Mr. Gabriel Ste-Marie

Mar/22/23 8:59:00 p.m.
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Madam Speaker, I thank my hon. colleague from New Westminster—Burnaby for his question and suggestion. As I said in my speech, we got that proposal adopted some time ago. I also believe that, when I served with the hon. member on the Standing Committee on Finance, those were the kinds of measures that we adopted and then asked the government to look at and implement. Those measures sought to promote local products and to give small business owners just starting out, including those in the spirits sector, an advantage when entering the market.

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Mr. Sébastien Lemire (Abitibi—Témiscamingue, BQ)

Mar/22/23 8:59:42 p.m.
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Madam Speaker, as a proud resident of Abitibi-Témiscamingue, I can say that microbreweries are at the heart of our identity. Whether we choose the Foublonne or Brother John from Trèfle Noir in Rouyn‑Noranda, the stout from Pierre de fée in La Sarre, the Blonde du Frère Moffett from Barbe Broue, in Ville‑Marie, and in Témiscamingue, the Tête de Pioche from the Prospecteur in Val‑d'Or, or simply a beer from a Quebec microbrewery we can pick up at the Chez Gibb cornerstore, there is always a way to have a drink from Abitibi‑Témiscamingue. We even have very good wines produced by the Domaine des Duc. The member for Joliette has even tasted it. The Conservatives' motion essentially replicates the recommendation in the pre-budget consultation report of the Standing Committee on Finance that called on the government to freeze the federal excise tax on beer, spirits and wine at the 2022 rates for the 2023 and 2024 fiscal years until inflation returns to the Bank of Canada's target range, somewhere between 1% and 3%. The excise tax on alcohol is a fixed amount by volume. Traditionally, that amount has been occasionally reviewed in a budget implementation bill. Since 2017, the law has set out an automatic escalator formula based on the consumer price index. As a result, the excise tax will go up 6.3%, reflecting the high level of inflation we experienced in 2022. We will therefore be supporting the Conservative motion because, in the midst of this inflationary surge, hiking a consumption tax that would further increase prices would be ill-advised. That said, admittedly, the impact of the alcohol excise duty escalator on the final selling price of the product will be rather minimal. We are talking about 1¢ per can of beer. This motion is not a real response to the inflationary pressure on food prices. Moreover, only the big brewers would truly benefit from the adoption of this motion. Regional microbreweries pay only a fraction of the excise tax and will therefore benefit much less from the tax rate freeze. In fact, thanks to pressure from the Bloc Québécois in 2006, it is only after 75,000 hectolitres that a microbrewery pays the full tax rate. Under that amount, the cost varies between 10% and 85% of the value of the tax depending on the number of hectolitres produced. Of the 1,200 breweries in Canada, including the more than 300 in Quebec, only 12 pay the full amount of the excise tax on the majority of their production. Most of these 12 breweries are owned by foreign multinationals. There are other ways to help microbreweries and their brewmasters, who introduce us to new flavours. For example, the government could exempt microbreweries from paying the tax on the first 10,000 hectolitres, as recommended by the Canadian Craft Brewers Association. In fact, 80% of microbreweries produce less than 2,000 hectolitres per year. The regulations on the excise tax and its escalator based on capacity made it possible for many craft microbreweries to expand, but the 75,000-hectolitre threshold is now a barrier to their growth, according to the Canadian Craft Brewers Association, which I salute. Another solution that would help our local businesses compete against the big breweries would be to raise the threshold while keeping the rate brackets. One of the positive aspects of the 2022 spring budget was the excise tax exemption for producers of cider and mead, such as Mieillerie de la Grande Ourse de Saint‑Marc‑de‑Figuery. I salute the member for Joliette for waging and winning this battle. His example should be followed and should provide further inspiration to the government today. However, the government still has a very restrictive definition of what constitutes cider and mead. Producers who flavour their products with berries or aromatics continue to pay the tax. The Bloc Québécois hopes that all of this will be resolved in the upcoming budget. We also hope that the excise tax exemption will apply to producers who make wine from other types of fruit, such as blueberries, which promote our region. In Val‑d'Or, in the riding of my neighbour from Abitibi—Baie-James—Nunavik—Eeyou, there is a a company that specializes in producing distilled beverages. Spiritueux Alpha Tango produces Bravo Charlie and Echo Foxtrot gin, Valentine amaretto, Mission Kosmos vodka and even Mayday liqueur, which is made of black spruce and cinnamon. I want to say that Quebec's microdistilleries are on an impossible mission to the cosmos and that their mayday signal is not receiving an answer from the government. That is a problem. Even their gin is made using cattails. There is something interesting and inspiring about that. With the excise tax at over $12 per litre of alcohol, a bottle of Alpha Tango gin will cost 25¢ more. That is not a catastrophic increase, but it is in addition to the general increase in prices. As the saying goes, it takes four quarters to make dollar. The Bloc Québécois would have proposed a different solution than the Conservatives. We need to duplicate the microbrewery model for microdistilleries and impose only a fraction of the tax that is charged to industry giants. That way, a bottle of Grande dérive, from Miellerie de la Grande Ourse, would cost $3 less per bottle instead of the meagre 25¢ being discussed today. This would apply to all those small, local producers who give us a taste of their regional expertise. I sincerely hope that the government will listen to this suggestion. It would allow our flavour artisans to benefit from a more targeted measure. Nevertheless, I repeat, we will support the Conservative motion because its merit lies in the message that the House is sending to the government. That being said, the solution to inflation is not simply a measure like this. Microbreweries in Abitibi-Témiscamingue have a long list of problems. In early February, Le Trèfle Noir, a source of pride in Rouyn Noranda, sold its recipes to Lagabière, a microbrewery in Saint-Jean-sur-Richelieu. Owner Alexandre Groulx, whom I commend, said that inflation, the pandemic and the labour shortage led him to sell part of his business. Our entrepreneurs need more than a band-aid solution. They need concrete solutions. We must ensure that our farmers benefit from measures to help them produce, in particular by creating a special emergency account similar to what was done during the pandemic, which would help ensure they are supported when they need it. There is a significant cash flow crisis within the farming community. Obviously, these are the raw materials used by our microbreweries and microdistilleries. We also need to address the labour shortage in all our regions and the housing crisis. These two problems are hindering the economic development of Abitibi—Témiscamingue. Some measures do exist, including a tax credit for returning recent graduates, a tax credit for immigrants who choose the regions of Quebec, tax incentives for experienced workers, increased transfers for the creation of social and community housing, and so on. The Bloc Québécois has solutions. We need the government to listen. With the budget only one week away, I hope it is listening. In conclusion, I invite all parliamentarians to support local microbreweries and microdistilleries, especially those in Abitibi—Témiscamingue. They will see that our products are full of local flavours, and I am sure they will become their favourites. Above all, they will have to enjoy them in moderation.

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Mr. Richard Cannings (South Okanagan—West Kootenay, NDP)

Mar/22/23 9:07:27 p.m.
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Madam Speaker, I have to agree with the member on the subject. Beyond capping this escalator tax, we really should be looking at restructuring the excise tax, especially for spirits. We also have the craft breweries of Canada asking for that, even though they have the staggered rise in excise tax based on how much they produce. It is way more than breweries or distilleries are paying in the United States, for instance. Could the member comment further on that? This is something that should be looked at. The distillers in my riding are very concerned about the unfairness of the way the excise tax for spirits is calculated today.

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Mr. Sébastien Lemire

Mar/22/23 9:08:36 p.m.
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Madam Speaker, I thank my colleague for his interest in this issue. I recently met Jean‑François Nellis, the owner of Pit Caribou since 2019. Pit Caribou is one of the most important microbreweries in the Gaspé and a member of the Association des microbrasseries du Québec. One of the things we talked about is the notion of the space in which microbreweries operate, which is of vital importance. The microbrewery model brings life and vigour to an area. It is good for the tourism industry and it is obviously good for the local economy. People say that microbreweries create jobs and contribute to the social fabric. Microbreweries are often located in the regions. One-third of microbreweries are found in towns with a population of less than 10,000. That is really interesting. When looking for ways to ensure that our economy is not centred just in Toronto or on oil from western Canada, we can really see a solution in microbreweries. To answer my colleague's question, one of the fundamental issues is the notion of liquidity. Companies need to have liquidity and the excise tax has a direct impact on that. Cutting the excise tax will help our microbreweries improve their ability to invest, develop new products and innovate.

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