The LCBO wine markup tax is increasing by 2 per cent this week – the first of four tax hikes on wine
The Canadian Taxpayers Federation (CTF) is calling on the government to reverse this week’s 2 per cent hike in ad valorem tax in wine. Premier Wynne announced the tax increase, which is applied as a markup by the LCBO in her 2016 budget. The tax is moving from its current rate of 65.5 per cent to 67.5 per cent for Ontario wine, and from 71.5 per cent to 73.5 per cent for imported wine.
“Wine in Ontario is already taxed at high rates, and the LCBO markup alone is eye-popping. But for this spending addicted government, taxing a product at over 70 per cent isn’t enough, apparently they need to hike the taxes even higher,” said CTF Ontario Director, Christine Van Geyn.
When other taxes are added, an Ontario wine maker will now receive only $4.27 on a $10 bottle of their Ontario wine. The other $5.73 of the price goes to taxes and bottle deposits. Things are even worse for imported wine, where the pre-tax price of the wine is only $3.44 on a $10 bottle.
“Most shoppers have no idea just how much of the price of wine is actually going towards federal and provincial taxes, or that there is an LCBO markup tax of 67.5 per cent for Ontario wine. We have an award winning wine industry here in Ontario, but the government seems to be trying to drive shoppers away with these high taxes and constant tax hikes,” continued Van Geyn.
The markup is not the only recent change in wine taxes, and it is not the last. The tax will increase a further 2 per cent in 2017 and 2018, and by 1 per cent in 2019. And the 2016 Ontario budget already increased the basic tax on non-Ontario wine purchased at winery retail stores by 1 per cent at the beginning of June. Like the LCBO mark up tax, this tax hike will also increase by another 1 per cent in 2017, 2018 and 2019.
“The government needs to stop squeezing more and more out of shoppers who are just trying to live their lives and take care of their families. This wine tax grab is yet another example of Wynne putting her wacky spending priorities like her $8.3 billion green scheme and huge deficits ahead of the every day realities of Ontarians,” concluded Van Geyn.