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On February 25th (2016), MP Ben Lobb for Huron Bruce, introduced Bill C-232 - An Act to Amend to Excise Act, 2001 (Spirits). Today, September 19th, it the Bill was debated in the House of Commons.
In a media release, Lobb said that lowering the tax rate for distilleries will increase production and revenue, jobs will be created and more Canadians will be employed.
Today, in the House of Commons, Lobb said that, "The benefits of lower tax rates are not limited to distillery industry, Canadian farmers will also benefit from increased sales of alcohol`s main components, corn, wheat, barley and rye."
According to Schedule 4 of the Excise Tax Act (ETA), spirits containing more than 7% of absolute ethyl alcohol by volume are subject to an excise duty of $11.696 per litre of absolute ethyl alcohol. Spirits containing 7% or less of absolute ethyl alcohol by volume are subject to $0.295 per litre of spirits.
This bill proposes changing the ETA such that the excise tax rate for the first 100,000L of 100% alcohol be reduced to $6.00, and the excise rate for all production past 100,000L to be reduced to $11.00
According to Lobb, there has been hard evidence from the United Kingdom that a two per cent decrease in taxes for distilleries led to a 96 million pound increase in taxes paid to the UK's treasury. "It is believed that lowering taxes (and by extension production costs) would also greatly increase distilleries’ revenues here in Canada. Lower taxation rates can lead to growth in the craft distillery industry."
Lobb pointed out that there are currently eight craft distillers in Ontario and 62 distillers nation wide. "When I took office, there were no craft distillers in Huron Bruce," says Lobb, "now there are five in that region alone."
"The United States is experiencing a situation where craft distilleries have grown 15-fold in the past decade with 769 craft distillers listed with the American Craft Spirits Association," he added.
According to statistics, the Spirits industry contributes $5.8 billion annually to Canada's GDP and exports $600 million worth of Canadian whisky and other spirits around the world and the sector employs nearly 8,500 Canadians full-time.
Canadian distillers also purchase approximately 320,000 metric tons of corn annually, making them the 4th largest corn buyer in Ontario and nearly 100% of their grain is sourced from Canadian Farmers.
"In fact," says Lobb, "Spirits generate the highest value-added on goods made from Canadian agriculture."
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Monday, September 19, 2016