‘Slight’ win for Calgary bar and restaurant owners with 2% federal alcohol tax

Calgary bar and restaurant owners are breathing a “slight” sigh of relief after dodging a massive federal liquor tax bullet.

Owners were bracing for the biggest alcohol tax jump in 40 years, with the federal alcohol tax slated to rise by over six per cent, but held to a two per cent increase.

To say it’s been a challenging few years for the food and beverage industry is an understatement.

Trolley 5 owner and president of the Alberta Hospitality Association Ernie Tsu says many local small businesses are still recovering from the effects of the pandemic, and another blow to the industry would have been detrimental.

“We’re already seeing a lot of closures in the last … six to eight weeks. We’ve seen four closures of restaurants just in the Calgary area, and one of them was there for over 11 years,” Tsu said.

“So that with the 6.4 raise that might have happened, that definitely would have devastated an industry that already operates on very slim profit margins.”

Briggs Kitchen and Bar closed its doors in late March, and Buffalo Wild Wings, a popular sports bar in the city, closed both of its locations Sunday.

In addition, Milk Tiger closed its doors after 15 years on 4 Street SW.

 

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Tsu says the 2 per cent bump is manageable, but at the end of the day, it’s still more money coming out of the pockets of both restaurant owners and customers.

“It’s definitely eased. It’s still another raise and tax for all restaurants across the province as well as our local breweries and distilleries, but it’s definitely a little bit of a relief,” he said.

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However, Tsu’s not convinced that the restaurant industry is in the clear.

“Now, with this knee-jerk reaction by the federal government to only raise two per cent. Well, what’s that going to look like in 2024? What’s that going to look like in 2025?” Tsu said.

“I think their federal budget should have probably had a little bit more of a critical path or runway for the next two to three years, giving any business owner some type of insurance.”

The federal alcohol increase is temporarily capped at two percent to offset inflation and only applies for the 2023-24 fiscal year.