Ottawa to extend 2% cap on alcohol excise tax increases through 2028

The federal government is set to extend its temporary cap on annual alcohol excise tax increases for another two years, according to a senior government official who spoke to The Canadian Press on background ahead of a formal announcement.

Excise duties on beer, wine and spirits are normally adjusted each April 1 based on inflation. Since 2023, the Liberal government has limited those increases to a maximum of two per cent annually. That cap was scheduled to expire this year, but the official said it will now remain in place until 2028.

The government is also planning to extend for two years a separate measure supporting small-scale brewers, which reduces excise taxes by 50 per cent on the first 15,000 hectolitres of beer produced in Canada.

According to the official, the extensions are intended to provide cost predictability for brewers, wineries and distilleries facing ongoing global trade pressures and supply chain challenges. The timing also coincides with expectations of increased demand tied to major events, including matches hosted in Canada during the upcoming FIFA World Cup.

The proposed extension comes as opposition parties and advocacy groups continue to push for the complete elimination of scheduled alcohol tax increases. The federal Conservative party and the Canadian Taxpayers Federation have both called on the government to cancel the April 1 adjustment entirely.