Alberta at odds with its biggest craft brewery after substantial beer tax hike

A stand off is brewing between Alberta's government and the province's biggest and oldest craft brewery as the company faces a sudden 22 per cent tax increase under a new provincial liquor fee rate — a rate that largely doesn't impact any other brewery. A bartender pours a craft beer in Buffalo Grove, Ill., Thursday, Feb. 9, 2022. THE CANADIAN PRESS/AP/Nam Y. Huh

EDMONTON — A standoff is brewing between Alberta’s government and the province’s biggest and oldest craft brewery.

Big Rock Brewery, founded in 1985, is facing a sudden 22 per cent increase to the fees it pays the province after a new rate was introduced last month — a rate that largely has no impact on any other brewery.

Brad Goddard, vice president of business development and government relations for Big Rock, says the hike means the Calgary-based company will hand over $1.4 million in additional taxes annually.

“The province where we have built our business, overnight -- literally with eight hours' notice -- increased their tax 22 per cent and decreased our capacity to grow by 55 per cent,” said Goddard.

“That doesn’t feel like the Alberta that I’m used to.”

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The agency tasked with regulating alcohol — Alberta Gaming, Liquor and Cannabis — takes in fees from companies for every litre of alcohol they make. The more a company produces, the higher the fee.

AGLC introduced its new rates on Feb. 28, just one day after the Alberta government tabled its budget.

Service Alberta Minister Dale Nally, who oversees AGLC, says “99 per cent” of Alberta’s small brewers will pay the same rate as before — $0.10 per litre — because they produce much less beer than companies like Big Rock.

“Out of the 137 small craft brewers in this province, the vast majority of them ... do 5,000 hectolitres or less,” he said. A hectolitre is equal to 100 litres.

Under AGLC’s new fee rate, every beer maker that produces more than 180,000 hectolitres per year will pay $1.25 per litre. Previously, breweries could produce more than double that amount before being charged $1.25 rate.

Big Rock, which Goddard said makes roughly 150,000 hectolitres per year, will now pay between $0.78 and $0.81 per litre, about $0.20 more than before.

Nally said the new rates weren’t designed to increase government revenue, despite the province’s new budget forecasting a $5.2 billion deficit.

Instead, he said the change will protect small brewers and charge bigger producers accordingly.

“We need to protect small brewers in this province, and we do that by ensuring that the small brewer markup goes to small brewers,” Nally said.

Beer Canada, which represents breweries across the country, endorsed the minister’s argument last month, calling it a step toward equity.

“(It’s) an encouraging first step toward implementing a more balanced and transparent beer fiscal framework for Canadian brewers operating or selling in Alberta,” said President CJ Hélie in a statement.

But Goddard says it means Big Rock is being lumped together with multinational breweries like Molson Coors or Labatt, which produce millions of hectolitres of beer.

“The brewers that they’re trying to compare me to, the brewers that dominate the marketplace, are unbelievably large compared to me,” he said.

Alberta Small Brewers Association director Blair Berdusco said the new fee rate could discourage other breweries from growing.

“Fortunately, at this moment, nothing immediately changes really for the smaller Alberta breweries,” Berdusco said. “But again, you go to that outlook for them and the story changes.”

Berdusco said she expects major breweries to take an even higher share of the market as a result.

Goddard said Big Rock’s own growth plans are uncertain and its long-held relationship with the Alberta government appears to be in tatters.

“The Alberta government has encouraged us to grow, to attract investment, to hire more people, to make more products here in Alberta,” he said.

“Now it feels like the message coming out of the Service Alberta office is, ‘No, growth isn’t what we’re looking for.’”

Nally’s press secretary, Brandon Aboultaif, said in an email that a formal review of the fee structures for beer and other types of alcohol will take place every five years moving forward.

“This will help maintain a fair balance between industry growth, government revenue needs, and consumer interests,” he said.

This report by The Canadian Press was first published March 13, 2025.

Jack Farrell, The Canadian Press