Ontario cuts alcohol taxes for local craft brewers and distillers by 50%, aiming to boost industry growth — but consumer prices may not drop.
Local Producers Applaud New Tax Relief
Ontario’s craft alcohol producers are celebrating a major win as the provincial government implemented sweeping tax cuts on August 1, reducing levies on locally made beer, spirits, and ready-to-drink (RTD) beverages by up to 50%. The Ford government says the move supports a “modernized and competitive alcohol marketplace” and will help local businesses stay afloat after years of economic pressure.
Impact Across the Province
The tax changes apply specifically to small Ontario-based producers. For spirits, the basic tax has been halved to 30.75%, while Ontario microbreweries will now pay just 17.98 cents per litre for draft beer and 19.88 cents for non-draft. The LCBO markup for cider drops to 32%, and wine or spirit-based RTDs under 7.1% alcohol content will see reduced markup rates of 48%.
Craft beverage producers say these cuts are a long-overdue step in levelling the playing field. Steve Himel, co-founder of Henderson Brewing Company in Toronto, described the changes as a “huge difference” for his operation. “This tax cut is so well-timed. It really helps us to be competitive again,” Himel said.
Mixed News for Consumers
Despite the industry cheer, Ontarians may not see a noticeable drop in shelf prices. Producers say the tax savings will primarily help stabilize operations and support long-term growth, rather than deliver immediate discounts. Himel noted that while some savings might be passed along, much of the relief will be reinvested into business operations.
At Reid’s Distillery in Toronto, owner Graham Reid explained that taxes previously consumed nearly $38 of a $50 bottle of gin. The new structure boosts margins, but he doesn’t anticipate immediate price drops on spirits. “It was more affordable to import your product than to produce it here. That shouldn’t be the way it is,” Reid said.
Boosting Local Growth
Industry leaders are calling the tax reform a “game changer.” Scott Simmons, president of Ontario Craft Brewers, said the cuts pave the way for job creation and community investment. “The changes put breweries on a path to grow, create jobs, and get more local beer on store shelves — I think that’s something we can all cheers,” Simmons said in a statement.
Graham Reid added that the reduced taxes will help offset rising costs from aluminum tariffs on canned beverages. Shehan De Silva, founder of Craft 360 Beverages, echoed that sentiment, calling the move “hugely beneficial” for small brewers. “After a lot of tough news over the pandemic, this is definitely welcome,” De Silva said.
Why It Matters Now
The tax cuts arrive after years of challenges for Ontario’s alcohol industry, especially during and after the COVID-19 pandemic. Rising costs, limited margins, and global competition had put many local producers under strain. This financial relief aims to keep the sector alive — and thriving.
While immediate savings for consumers may be minimal, the long-term benefits for local jobs, economic stability, and product availability are expected to be significant. For Ontario’s small alcohol producers, the message is clear: relief is here, and with it, renewed hope.
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