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Fair And Free Trade – Alberta Told To Stop Subsidising Brewers

It does come as something of a surprise to find that Canada has more than two brewers – Molson and Labatts – but that’s an obvious implication of this story. That, in the name of free and fair trade Alberta must stop subsidising craft brewers. It’s also an obvious point that if we’re to have that free and fair trade then provincial governments can’t go around selectively subsidising producers in a certain location or sector. And that is what they were doing:

Alberta’s subsidy plan to boost its own craft beer industry has been hammered again by a trade panel ruling.

An appeal panel under the Agreement on Internal Trade has upheld an earlier decision that provincial subsidies to assist smaller Alberta craft brewers are unfair and violate inter-provincial free trade rules.

You can see why the subsidy was enacted:

Finance Minister Joe Ceci and the NDP government sure love craft beer, but they might want to start hitting the hard stuff.

The NDP being, roughly enough, the Canadian equivalent of the nuttier parts of Jezz Corbyn’s following. You know, small is good, local is good, why not damn reality or the law and splash money at small and local?

The reason they lost here is obvious enough:

At issue was Alberta’s Small Brewers Development Program, which Calgary-based beer importer Artisan Ales — supported by Saskatchewan in the dispute — contended was operating in contrary to free trade obligations.

Introduced in 2015, the program essentially put higher markups on beers produced outside of Alberta.

It was changed in 2016, applying a higher mark up on beer brewed anywhere; but to off-set that locally, a grant to Alberta brewers was made available.

Mark up here – Canadian being one of the colonial misunderstandings of English as she is spoke proper – being an excise tax, not an increased gross margin.

The Canadians have their own variation of free trade between the provinces. The US says that only the Feds get to regulate trade between the states, the UK hasn’t thought for a millennium about regulating trade between the counties, the Canucks gain the same point in a slightly different manner. You’re perfectly allowed to have a different tax rate on all business in a province, that’s fine. You can also tax whatever you damn well want to – different tax rates on different products is just fine. But what you can’t do is have different tax rates dependent upon production in or out of province. For that’s the type of discrimination which does have trade consequences.

Given that Canada does in fact have that inter-provincial free trade it was always pretty obvious that Alberta was going to lose here. As they had already in fact, this just being confirmation of that fact. All of which really brings the question, well, why did they try? It must have been obvious they’d be over ruled, so why make the effort?

Well, it took some time to get to this point, there might well have been an election or two along the way and who knows how many votes the policy bought in that time?

Politics, eh?

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6 years ago

Why did they try? Surely provinicial microbrewers testified in committee about the virtue of a healthy brewing industry, surely accompanied by campaign contributions, and legislators aimed to give the customer value for the money spent. Their error was not in failing to realize that their profession was favor-selling but in failing to realize they were not the top dogs in this racket. They have to move to Ottawa before plying this con.

Rhoda Klapp
Rhoda Klapp
6 years ago

If you brew good beer you will need no subsidy.

6 years ago
Reply to  Rhoda Klapp

And if you brew bad beer…?

Rhoda Klapp
Rhoda Klapp
6 years ago
Reply to  Spike

No subsidy (sudsidy?) will help but there will be plenty of bad brewers applying for it.

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