Canada, BC: British Columbia craft brewers calling on government to fix tax system

B.C.’s craft brewers say their industry is in crisis and they are calling on the provincial government to fix a tax system they say is forcing small, local breweries to close while multinational beer giants continue to benefit, Vancouver Sun reported on July 31.

On July 31, the B.C. Craft Brewers Guild launched a grassroots campaign at Main Street Brewing, demanding urgent reforms to keep the taps flowing at more than 220 local breweries employing 6,000 British Columbians.

In B.C., craft breweries pay a markup, essentially a tax, on every litre of beer sold through their Sales Distribution Agreement with the government-run Liquor Distribution Branch, which oversees all alcohol sales and distribution in the province.

Small- to medium-sized breweries pay between 40 and 99 cents per litre on a sliding scale, while larger producers pay a flat rate of C$1.08 per litre.

As breweries grow, they pay higher markups as their annual production rises, but only up to 35 million litres. The B.C. Craft Brewers Guild is proposing to extend that threshold to 50 million litres and raise the top per-litre rate from C$1.08 to C$1.14.

The idea is to have larger producers pay slightly more, allowing smaller breweries to pay less — potentially reducing the lowest tier from 40 cents to 10 cents per litre. Currently, breweries producing under five million litres all pay the same base rate, and the Guild is calling for a more gradual scale to support growth.

While the larger companies pay more overall due to their size, their capped rate, combined with greater capital and production capacity, allows them to absorb costs and keep prices low.

“It’s really frustrating,” said Cameron Forsyth, co-owner of Main Street Brewing. “Every day we come in here, we stress about money, we worry about tomorrow.”

“For every litre of beer that leaves our brewery, we’re paying 40 cents to the government,” added Forsyth. “That doesn’t sound like much, but on a 50-litre keg, that’s C$20. Sell 1,000 kegs, and we’re looking at C$20,000. It adds up fast.”

Guild executive-director Ken Beattie said while just three breweries closed in the decade before 2023, more than 20 have shut down in the past year alone.

He blames a perfect storm of pressures facing the local industry, including fallout from COVID, rising costs, and looming tariffs on key materials such as U.S. aluminum and steel.

On Thursday, the Guild unveiled a new markup model it has been pushing in talks with the province for more than a year. The core idea: “The more you make, the more you pay,” said Beattie.

“We’re not asking for handouts. We’re just asking government to stop taking as much from us. That money stays in B.C. — it supports local jobs, local economies, and lets our breweries compete fairly against the goliaths of the industry.”

Similar changes have already been made in Ontario and Saskatchewan, where tax structures now give smaller producers room to grow and reinvest in their local operations.

Forsyth said this week alone, Main Street Brewing owes the province C$6,000 in markup payments. It’s a weekly bill that would be around C$1,500 under the proposed model.

“We stand to lose everything my team and I have built in Mount Pleasant, unless the government acts,” the owner added.

Unlike gas stations or grocery stores that can raise prices, craft brewers say they are forced to compete with global giants who absorb cost hikes to keep beer cheap on shelves.

“We’re not losing because of poor beer and bad business, we’re losing because the system is rigged against us,” Forsyth said.

The guild’s campaign is urging local beer lovers to contact their MLAs and join the push for a fairer tax system to support B.C.’s local craft beer industry.

In a statement, the B.C. Liquor Distribution Branch said it recognizes the concerns raised by the B.C. Craft Brewers Guild and remains committed to reviewing the current beer markup structure.

“The review was temporarily paused to enable the LDB to prioritize urgent policy work in support of the provincial response to U.S. tariffs. Government is committed to resuming this work.”

Although it did not say whether it supports the guild’s proposed tax changes.

01 August, 2025