Alberta appeals trade ruling, defends rebate program for craft brewers

The Alberta government is appealing a trade panel ruling which determinedits craft brewers rebate programand graduated beer price markups violated Canada`s Agreement on Internal Trade (AIT).

Finance Minister Joe Ceci wouldn't disclose details of what will form the legal basis of the appeal, but saidit will show Alberta's program is legal under what is Canada's free trade agreement between provinces.

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"It's in Alberta's best interest to see liquor manufacturing happen here with jobs, investment and a market," saidCeci, who creditedgovernment incentives for creating 18 new craft brewers in Alberta.

"This government, in particular, supports the development of small brewers, or liquor manufacturing industry in this province," said Ceci.

The three-person AIT panel ruled July 28, 2017, on a complaint filed against the Alberta government by Calgary-based beer importer Artisan Ales Consulting. Artisan Ales imports craft beer to Alberta from Quebec and outside of Canada.

In October 2015, the Alberta government introduced a lower markup price for beers produced by smaller brewers in Alberta, Saskatchewan and British Columbia.

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The province rolled back the policy in August 2016, instituting a markup of $1.25 a litre for all beer. But at the same time, the province introduced a rebate known as the Alberta Small BrewersDevelopment Program to help craft brewers.

Artisan Ales Consulting said the markup, followed by the rebate program, resulted in a 33-per-cent drop in sales, and a more than 80-per-cent decrease in company profits.

Destroyed business

"They basically destroyed our business," said Bo Vitanov, co-proprietor of Artisan Ales.

"In our minds they're just wasting taxpayers'money fighting something where they're clearly in the wrong," said Vitanov.

Instead of fighting the ruling, Vitanov wants the government to return to the system that was in place prior to October 2015, which applied amarkup based on a brewery's total production, regardless of product origin.

But the Alberta government doesn't consider the appeal a lost cause.

The original ruling by the trade panel in July was not unanimous, giving Ceci hope a new panel will consider the liquor markup issue separate from the craft brewing rebate program.

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"As we go forward, we'll build on that and other things to have a liquor manufacturing sector in this province," said Ceci.

While not forming the basis of the appeal, Ceci signalled that in the context of free tradeit's important to point out how the sale of Alberta liquor is handled in other provinces.

"Other provinces have frankly cut out Alberta liquor from their shelves," said Ceci.

Ceci said he hopes the work currently being done by the provinces under the Canada free trade system, will result in better co-operation between provinces when it comes to the liquor industry.

"Ontario, Quebec, B.C. and Saskatchewan, if you go to those provincesyou don't see Alberta products on their shelves, meaning to me that they're doing things that are not trade compliant," said Ceci.

UCP Finance Critic Ric McIver said in a statement the decision tochallenge the ruling is a sign the Alberta government doesn't respect trade agreements.

Admit Mistake

"We call on Minister Ceci to admit his mistake and modify the Alberta Small Brewers Development Program to align with existing trade agreements," said McIver.

The AITpanel ordered the government to either repeal or amend the Alberta Small BrewersDevelopment Program within six months.

Now that the government has launched an appeal, the grant program will remain activeuntil a new AIT panel delivers a ruling, says Alberta Finance and Treasury board spokesperson Mike Brown.