Uncorking the budget: Slight tax hike planned for wine sold in Ontario
Published Friday, April 12, 2019 1:06PM EDT
Last Updated Friday, April 12, 2019 7:32PM EDT
Wine drinkers in Ontario will be paying a little more for a bottle come next January, despite an announcement in Thursday’s budget that the planned tax hikes were being “paused.”
The 383-page document, delivered by Finance Minister Vic Fedeli, included a freeze on the wine basic tax rate, which was scheduled to go up on April 1.
The document stated that upcoming legislation would “pause the previous government’s changes to the Wine Tax,” allowing the government to “leave more money in the pockets of Ontario wine consumers.”
On Thursday, Fedeli tabled the Protecting What Matters Most Act, which clarified that the government is actually deferring the tax changes until Jan. 1, 2020.
“Currently, subsections 27 (1.1), (2) and (2.1) of the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996 provide for an increase, effective April 1, 2019, in the basic tax payable on purchases of wine and wine coolers,” the proposed legislation reads.
“The Act is amended so that the increase does not take effect until January 1, 2020.”
The tax hikes would affect Ontario and international wines purchased at the LCBO, wine boutiques or at a vineyard.
Ontario wines purchased at the LCBO would have the same tax rate of 6.1 per cent, but would be increased from 9.6 per cent to 11.1 per cent if the same bottle of wine is bought at a wine boutique.
International wines would be taxed at a higher rate at both the LCBO and private wine retailers, going up from 19.1 per cent to 20.1 per cent and from 22.6 per cent to 26.6 per cent, respectively.
The tax increase would mean a $14.45 bottle of Australian Yellow Tail Big Bold Red would be 15 cents more expensive per bottle at the LCBO and 58 cents more at a private retailer.
When asked about the deferred tax increase, a spokesperson for the finance minister indicated there would be another announcement on the topic on an unspecified date.
“We are continuing our review of the alcohol sector and will have more to say when the review is complete,” said Robert Gibson, the press secretary for Fedeli.
Fedeli’s office did not respond when asked whether that meant the tax increase would be scrapped entirely.
The legislation containing these measures has yet to be passed by the Ford government.
Here is a breakdown of the wine basic tax rate:
Currently: 6.1 per cent
As of Jan. 1, 2020: 6.1 per cent
Currently: 9.6 per cent
As of Jan. 1, 2020: 11.1 per cent
Currently: 19.1 per cent
As of Jan. 1, 2020: 20.1 per cent
Currently: 22.6 per cent
As of Jan. 1, 2020: 26.6 per cent
Boozy budget green lights ‘happy hour’ and more
A number of new changes fell under the umbrella of alcohol service and consumption in the PC government’s 2019 budget.
The province is set to allow bars, restaurants, and golf courses to start serving alcohol at 9 a.m., seven days a week, if they choose. Currently, licensed establishments can serve alcohol starting at 11 a.m.
The government said hours could be increased even further, depending on the results of consultations.
Back in February, Toronto city councillor Paula Fletcher brought forward a motion to ask the province to change hours which restaurants serve alcohol on the weekends. It was passed in a 18-8 vote.
At the time, Fletcher pointed out that grocery stores like Loblaws can sell wine as early as 9 a.m. but “a business two blocks away can’t sell a glass of wine until eleven.”
The budget also handed over rulemaking about public alcohol consumption to municipalities.
It will be up to cities like Toronto to decide whether people can have a drink in places like public parks.
For visitors of Woodbine Beach on Friday, where outdoor parties are common in the summer months, the government’s official word doesn’t make much of a difference.
“You’re not going to stop it,” said one woman. “People were drinking in the park last year. There were big parties and stuff, but they picked up after themselves. If people stay on top of that, I don’t see any harm in it.”
Francesca Brunsden, who spent years in London, England, where drinking in parks is legal, said the rules don’t seem like a big deal.
“It’s a common thing there,” she said. “I really took for granted when I came here that you couldn’t do that. It would be nice to be able to do that again, to be honest.”
Others expressed possible safety concerns about the public consumption.
“It’s all a question of quantity,” said another. “If someone wants to have one beer or a glass of wine… That seems very civilized. But if people don’t have limits then it makes other people feel unsafe.”
The once-forbidden “happy hour” is also back in business as the province loosens the rules.
The measures laid out in the budget add to alcohol changes made by the government last year.
Back in December, the Ford government announced that all LCBO and Beer Store locations, as well as authorized grocery stores, could sell alcohol from 9 a.m. to 11 p.m. seven days a week. The government also lowered the minimum price of a bottle or can of beer to a dollar.
The government hopes the measures will show consumers can be trusted to “make responsible choices.”