July 2006

On May 2, 2006, the Minister of Finance tabled a Notice of Ways and Means Motion, which included amendments to the Excise Act and the Excise Act, 2001 to implement new rates of excise duty on beer, spirits, wine, and tobacco products, effective July 1, 2006.

For beer produced in Canada, it was announced that new reduced rates of excise duty were to be tiered according to a licensed brewer’s beer production in a calendar year, and would not apply to licensed brewers whose annual beer production is greater than 300,000 hectolitres. Please refer to Excise Duty Notices EDN 9, Excise Duty Rate Changes – July 1, 2006 and EDBN 6, Excise Duty Rate Changes on Beer Produced by Small and Mid-Sized Brewers for further information on the announcements made on May 2, 2006.

On June 28, 2006, the Minister of Finance announced some changes to the tiered rates of duty to Canadian-made beer. These tiered rates will apply to most beer that is brewed in Canada, regardless of the size of the brewer. However, these rates will not apply to reduced alcohol or "de-alcoholized" beer containing not more than 0.5% absolute ethyl alcohol by volume, which will be subject to excise duty at the rate of $2.591 per hectolitre. Please refer to Excise Duty Notices EDBN 9, Reduced Rates of Excise Duty on Beer Brewed in Canada for detailed information on the application of the tiered rates of duty to Canadian-made beer and to EDBN 10, Associated and Related Persons Rules for Brewers for information on the rules applicable to associated corporations and other associated persons who are licensed to make beer under the provisions of the Excise Act.

Following are the revised tables for the tiered rates of duty on beer produced in Canada. There have been several small changes to the rates applicable to beer containing more than 0.5% but not more than 1.2% absolute ethyl alcohol, and a clarification of the volumes subject to the normal duty rates when in excess of 75,000 hectolitres in a company’s annual production. The changes to the tables for the rates of duty on beer that were published with EDN 9 are indicated in bold type. This Notice replaces the portion of EDN 9 that dealt with the rates of excise duty applicable to Canadian-made beer.

Further information on the excise duty rates may be obtained from the regional excise duty offices. A list of regional excise duty offices is available in Excise Duty Memorandum 1.1.2, Regional Excise Duty Offices on CRA’s Web site at www.cra-arc.gc.ca/menu/EXMS-e.html.

Beer or Malt Liquor Brewed by Domestic Brewers