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Dueling Grants and More Beer Policy Stuff

Alberta Finance Minister Joe Ceci delivers Budget 2017.

It has been rather quiet on the beer policy and politics front recently. No updates on the ongoing legal disputes around Alberta’s mark-up policy and brewers’ grant program (for a summary read here), no big announcements or controversies – just the usual. Saskatchewan is plugging away at privatizing many of its liquor stores, but it is too soon to judge the effects and Ontario spreads its new beer in grocery stores (sorta) policy.

However, two announcements caught my eye in the last couple weeks. They are not beer-related, per se, but I do think they have  implications for the ongoing debate about beer policy.

Two weeks ago, the Ontario government announced a new $5 million grant program for small cideries and distilleries (read the coverage here). They money, spread over three years, will take the form of grants to eligible producers. The government currently provides $1.2 million in funding to the Ontario Craft Brewers Association and in the past has had grants for breweries as well.

Then, in last week’s Alberta provincial budget, Finance Minister Joe Ceci boasted about the beer grant program and promised an extension to craft distillers. To quote him: “The Alberta small brewery grant program is creating jobs and driving new investment. This year, we are going to build on the success of our craft brewing program and work to model a similar program for Alberta’s craft distillers.”

No details have been released but if it works like the beer grant it will take the form of regular payments linked to production levels.

Other than the expected applause from craft cideries and distilleries, the response has mostly been crickets. I find this curious given the uproar over the announcement of Alberta’s beer grant last year. What a few months ago was decried as a horrible violation of inter-provincial trade laws, is now no big deal? What’s the difference?

I have two answers to that last question. First, craft cider and (in particular) craft distilling are much earlier in their development as an industry. Craft distillers are very small and, for the most part, restricting sales to their region. There are few established Ontario craft distillers selling in Alberta (a quick search found a single product), or vice versa. Beer, on the other hand, as a more mature craft industry, has sizeable players who ship product to many provinces. A beer grant for Alberta producers ruffled the feathers (and threatened market share) of some established parties. In contrast, in distilling, no apple cart can be overturned because it hasn’t been built yet.

Second, the close proximity of the two announcements makes it hard for anyone to take specific umbrage with either program. With beer last year, the Alberta government could be isolated and singled out as they were the only ones making changes. People’s short memories had forgotten the millions handed to Ontario breweries by the Ontario government because that had been standard practice for years. Alberta seemed like an outlier, and thus vulnerable to criticism. Throw some partisan politics into the mix and  you get a controversy. An Ontario distillery can hardly cry foul about Alberta’s grant program when their government announced one days earlier.

Clearly the political and economic dynamics are different with cider and spirits. It is possible some one launches a complaint against these new grant programs, but somehow I kind of doubt it.

8 comments to Dueling Grants and More Beer Policy Stuff

  • Sorry but anything coming from this NDP government has me perplexed and the Ontario connection is even weirder as in hiring an Ontario company to change Alberta shower heads is completely bizarre. Now the new federal budget just taxed beer again for another 2%. Sounds small but add that to Prentice’s increase in his budget and it all adds up. I now pay 37% more for beer than I did 3 years ago. That I’m from the government and am here to help is sounding rather shallow right now. Taxman. Thanks

    • beerguy

      I appreciate you position, Bigsky, but you seem to be neglecting that the whole grants-and-protections-for-breweries thing is not an Alberta issue. It is EVERYWHERE. Even Brad Wall, self-professed champion of free markets (BTW who increased the sales tax today – increasing the price of beer) provides border protections for Sask. breweries.

      This issue is far bigger than the NDP government in Alberta. It is easy to focus on what they are doing – but looking only at them misses the big picture.

      As usual, thanks for commenting.

  • All this political mumbo jumbo has got my knickers in a not and thats not the way it should be for a simple idea because of entrepreneurs trying to make a go of it. So simple yet so controversial. Welcome to the New Canada. The old one who built it just left the door and slammed it shut. Have a good day. Merci

    • beerguy

      It’s okay. Step back, open a good Alberta beer of your choice, breathe a few times and maybe watch the hockey game. It will all be okay. And be glad you are not living in the US right now…

  • Your two answers are good, but here is another thought.

    It is difficult to oppose something that is as yet undefined. The grant program for brewers was significant, at greater than $1.00 per litre for some. The impact on the beer math for small non-Alberta brewers was (and remains) a big factor. This is particularly true when you witness double dipping, where Alberta brewers do not reduce their prices by the same amount as their grant, thus collecting from both the craft beer buyer and the tax payer.

    While it remains to be seen, the ‘cheques in the mail’ program for distillers will likely not be as big a factor, and not worth the outcry. Time will tell.

    We do also distill and we do sell in Alberta…but quite frankly we are becoming well trained in just shutting up while getting nudged toward the sidelines. We just settle for a good old-fashioned eye roll and ‘here we go again’ moment.

    • beerguy

      As usual, some insightful and thought provoking observations. I was just struck by the contrast of responses. Thanks! I will keep my eye on this.

  • Tommyboy

    Thanks for keeping it real Beerguy. Some great analysis on all things Beer! As a fan of the craft beer/distill scene (all provinces) the cheap shots at our Alberta goverment makes my beverage hard to swallow.

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