Alberta wine tax a ‘slippery slope,’ sparks industry backlash

Kathy Le explains how Alberta's wine tax, introduced in 2025, is negatively affecting businesses in the province as wine costs rise by more than 20 per cent.

Winemakers, restaurants and liquor stores are calling on the Alberta government to repeal a wine tax introduced last year, saying it is driving up prices and squeezing small businesses.

The ad valorem tax, implemented in 2025 without industry consultation, applies to most wine sold in Alberta priced above $11.25 per bottle. Because the tax is percentage-based, higher-priced wines face higher markups, on top of Alberta’s existing flat liquor tax.

Al Drinkle, owner of Calgary wine shop Metrovino, said the impact is already being felt.

“Every bottle of wine in the shop is going up in price or already has,” he said.

Drinkle said the tax disproportionately affects smaller producers and independent retailers.

“The only kinds of wines that are excluded from this tax are ones that come from corporate entities that are farmed and produced by industrial practices,” he said.

Restaurants are also feeling the pressure. At Vin Room, owner and founder Phoebe Fung said wine costs have increased by about 20 per cent. While the business has absorbed much of that increase, she said customer traffic is slowing as household budgets tighten.

“We’re trying to ride it through,” Fung said.

“But when I talk to my fellow restaurateurs, they’re saying they’re cutting hours, because you have to find that cost reduction somewhere.”

Industry groups say the tax comes at a difficult time, as businesses face rising operating costs and consumers grapple with affordability pressures. The coalition opposing the tax includes Wine Growers British Columbia, Restaurants Canada, the Alberta Hospitality Association, and the Import Vintners & Spirits Association.

Jeff Guignard, president and CEO of Wine Growers British Columbia, said the tax has significantly reduced sales from Canadian wineries into Alberta.

“We’re seeing declines of up to 50 per cent in direct-to-consumer shipments to Albertans,” he said.

“It is now harder and more expensive to sell Canadian wine in Alberta than it has ever been.”

Mark von Schellwitz, vice-president of Restaurants Canada, warned the tax could set a precedent.

“We’re really worried this is a slippery slope,” he said.

“Ad valorem is now on wine. What’s going to come next as far as an ad valorem tax, which is going to make things a lot more expensive for Alberta consumers.”

In a statement, Service Alberta and Red Tape Reduction Minister Dale Nally defended the policy, saying Alberta remains the most tax-friendly and open jurisdiction in Canada for alcohol, including wine.

The province said the ad valorem tax applies to about 16 per cent of wines sold in Alberta, and that once all taxes are applied, a $20 bottle of wine can cost up to 87 per cent more in other provinces.

The government added that ad valorem pricing is used in several provinces and said Alberta’s approach is intended to balance affordability, competitiveness for small businesses and a strong liquor industry.

The industry coalition is urging the government to repeal the tax and work with stakeholders on an alternative solution that supports consumers and businesses while respecting interprovincial trade agreements.