Ontario eliminates volume and environmental taxes on beer, wine and spirits; raises basic beer tax rates and restructures spirits tax by alcohol content

Plain-language summary · AI-assisted · not legal advice

Ontario's Liquor Tax Act has been restructured to remove the separate volume tax and environmental tax that applied to beer, wine, wine cooler, and spirits purchased from licensed retail stores — those charges no longer exist. The basic tax rate for beer has increased: draft beer moves from 72.45 cents to 90 cents per litre, and non-draft beer from 89.74 cents to $1.18 per litre, with microbrewer discount amounts adjusted accordingly. Spirits sold at distillery retail stores are now taxed on a tiered basis by alcohol content (20%, 25%, or 30.75% of retail price depending on whether ABV is 7.1% or below, between 7.1% and 18%, or above 18%), replacing the previous flat 30.75% rate. The retail price calculation formulas for wine, wine cooler, and spirits have been simplified into a single algebraic formula, removing the steps that previously backed out volume and environmental taxes. The definition of 'spirits cooler' has been removed from the Act, and transition rules protect collectors and purchasers who paid tax at old rates before the changes took effect. Businesses that collect or remit liquor tax — including beer manufacturers, microbrewers, wineries, and distilleries — should review their systems to apply the new rates and simplified formulas.

Who this affects: beer manufacturers and microbrewers · brew pub operators · wineries and winery retail stores · distillery retail stores · liquor tax collectors and remitters