Smaller increase to federal tax on alcohol a relief for N.S. restaurant industry

Restaurateurs in Nova Scotia say this year's increase in thefederal excise tax on alcohol is "manageable,"after the originally proposed increasewas more than three times the amount.

In the federal 2023-2024 budget released on Tuesday, Ottawa temporarily capped "inflationadjustment for excise duties on all alcoholic products at two per cent for one year only as of April 1, 2023."

Earlier this month, the federal government was set to increase the excise tax by 6.3 per cent to match inflation.

Gordon Stewart, executive director of the Restaurant Association of Nova Scotia, said in a recent interview the smaller increase offers some measure of relief for a sector that continues to struggle after the pandemic.

"It's a bit of a reprieve. At the end of the day, it's the restaurant's customers that are going to end up to pay for their tax," he said. "The difference between two per cent and six per cent is a lot when you're buying something, particularly when you're doing it on a regular basis."

He added that consumers may see a few adjustments to prices.

Prices up at liquor store

At the provincial level, the Nova Scotia Liquor Commission raised prices on its alcohol products three per cent on Monday, before the federal budget revealed the two per cent excise duty increase.

Allison Himmelman, the communications director of the Nova Scotia Liquor Corporation, said in an interview that the federal excise tax is only one factor the organization considers when adjusting retail prices.

"Like all industries, we are impacted by overall price increases and inflation. Grocery prices are going up and beverage alcohol is no different," she said.

"Increase in commodities costs, things like barley, and freight and shipping, all of those costs factor into our overall price increase and what we look at."

Himmelman added that the NSLC increases prices twice a year, every year; once in the spring and again in the fall. In the last fiscal year, there was an overall 7.5 per cent increase in prices, she said.

Depending on the product, prices at the NSLC might be going up a few cents up to around adollar, she explained.