By Dean Bennett - The Canadian Press

Good hop, bad hop: Alberta’s craft beer subsidy plan tanked by trade panel

Jun 11, 2018 | 2:46 PM

EDMONTON — 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 grants to assist Alberta craft brewers are unfair and violate interprovincial free trade rules.

“By tying the grant explicitly to certain levels of production and sales of beer produced in Alberta, the (grant) program encourages the production and sale of Alberta beer and provides a competitive advantage … over beer produced in other provinces,” wrote the appeal panel.

All brewers in Alberta pay the same $1.25 tax per litre on beer, but in 2016 Finance Minister Joe Ceci introduced grants in 2016 to help small Alberta producers expand their businesses.

Calgary-based Artisan Ales, which sells imported beer, filed a complaint with the internal trade panel, saying the grants effectively tilted the playing field against those who bring in beer from outside.

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An original hearing panel found the tax and grant program constituted unfair trade while the appeal panel said the tax was fine but agreed the grant program was still offside under free trade rules.

Artisan Ales owner Mike Tessier said the program has severely undercut his business, but said the panel ruling is a victory for common sense.

“We were right the first time,” Tessier said in an interview.

Ceci was to respond to the trade ruling later Monday.

The dispute drew in Saskatchewan, which also argued the program was unfair. It became a bone of contention late last year when Saskatchewan threatened to ban Alberta licence plates from its job sites in retaliation.

“We are very pleased with the decision which confirms that Alberta’s beer market distorting policies unfairly discriminate against Saskatchewan and Canadian brewers,” Saskatchewan Trade Minister Jeremy Harrison said in a news release Monday.

“We call on the government of Alberta to immediately comply with this ruling, as they have promised, ensuring that brewers from our province and the rest of Canada can compete fairly with Alberta-based brewers.”

Earlier this year, Alberta Economic Development Minister Deron Bilous said in an interview the province would abide by trade rulings on its beer plan.

Opposition United Conservative Leader Jason Kenney said the ruling was “predictable” and the NDP government needs a consistent trade policy.

“If we want to champion free trade in the movement of our oil, we have to champion free trade on everything,” Kenney said in Calgary.

“These interprovincial trade barriers make us all poorer and in Alberta they make us pay more for beer and that’s why I’ve said I would go back to the drawing board. Let’s free the beer.”

Alberta’s beer plan has been modified a number of time since Ceci announced changes to government markups on beer sales in 2015.

Until then, beer producers had been charged a markup on a sliding scale. Large producers paid the maximum of $1.25 a litre.

Alberta kept the sliding scale for provinces in the New West Partnership at that time — Saskatchewan, Alberta and British Columbia — but made all other brewers pay the maximum $1.25 regardless of how much or how little they sold.

Opponents argued this was a violation of free trade and, in 2016, the province made all beer producers in Alberta and elsewhere pay the same $1.25 a litre. It also introduced grants for Alberta producers which prompted the legal challenge by Artisan Ales.

Alberta has argued that the $1.25 across-the-board markup and the grants are two different things and are both allowed under interprovincial free-trade rules.