Cost estimate of alcohol excise duty relief

In an announcement on March 9, 2024, the government proposed two measures to provide excise duty relief to alcohol producers. These measures would be in place for the 2024-25 and 2025-26 fiscal years. The first measure was maintaining the yearly increases on excise duty rates at 2 per cent, instead of the yearly increases being tied to inflation. The second measure was a further reduction of 50% on excise duty applied to a brewer’s first 15,000 hL of beer brewed in Canada.

The PBO estimates these measures will have a fiscal cost of $393 million over 5 years. In each year of this costing, the policy changes would only reduce the total alcohol excise duty revenue by about 3%.