Tyler Dyck, CEO of Okanagan Spirits Craft Distillery and president of the Craft Distillers Guild of B.C. Dec. 16, 2020. (Brendan Shykora - Morning Star)

Tyler Dyck, CEO of Okanagan Spirits Craft Distillery and president of the Craft Distillers Guild of B.C. Dec. 16, 2020. (Brendan Shykora - Morning Star)

Okanagan distillery pressures feds for tax reduction for Canadian distillers

Head of BC distillers guild pens two letters to federal ministers calling for support for spirits industry

Now that the United States has crafted its craft beverage tax reform, Okanagan Spirits is putting pressure on the Canada to support its distillers in kind.

U.S. Congress passed a Craft Beverage Modernization and Tax Reform Act Dec. 21, which made permanent a decrease in federal excise rates on the first 100,000 proof gallons of spirits produced by American distilleries.

Washington added the tax reform to Congress’s year-end spending bill 12 months after a one-year extension of the excise decrease, which was set to expire on Dec. 31, 2020.

According to the Alcohol and Tobacco Tax and Trade Bureau (U.S.), tax rates reduced by the bill equate to $2.70 per gallon, compared to $13.50 per gallon for spirits not covered by the reduction.

Tyler Dyck, CEO of Okanagan Spirits Craft Distillery and head of B.C.’s distillers guild, has spoken out in recent weeks about the absence of government support for Canadian distilleries that spent the early months of the pandemic stripping their craft spirits into emergency hand-sanitizer — many of which donated bottles of the solution by the thousands.

In a pair of letters addressed to ministers Chrystia Freeland, Mona Fortier and Mary Ng on behalf of the province’s 250-odd distilleries, Dyck called on the government to follow the example set south of the border.

READ MORE: B.C. distilleries still waiting on government support after supplying hand sanitizer

“We ask that the Canadian government moves to match excise parity with the Craft Beverage Modernization and Tax Reform Act in the U.S.,” one letter said.

“Even a match of the decreased excise rate on half the volume given to the U.S. manufacturers would lead to massive growth in Canada’s domestic industry.”

The U.S. introduced the excise cut as an economic stimulus in 2017, wanting to promote job growth and support domestic grain from small to medium distilleries, according to the letter.

“They did this not because they wanted to give up tax revenue, but so they could in-turn, reap much larger financial and job creation gains downstream,” Dyck said. “It worked fantastically well in the U.S., with almost 1,000 new distillery upstarts and countless other distillery expansions since its implementation, and tens of thousands of jobs created.”

Around the same time the U.S. was lowering its excise rate to one-seventh of the Canada’s rate, Ottawa introduced a further tax increase on distilleries.

“At present, we pay $12.610/L and in the U.S., they pay approximately $1.77/L,” Dyck’s letter states.

The cross-border tax imbalance has made it harder for Canadian distilleries to compete in the open market.

“We believe there is a large opportunity for all elected leaders in Canada to help foster the domestic reconstruction of the distilling sector and the economy as a whole as recovery from the pandemic begins.”

As the president of the B.C. distillers guild, Dyck says he’s heard from many distillers in the province who are struggling to stay afloat amid a year of economic downturn, while having contributed to the early push for hand sanitizer after the pandemic created worldwide shortages.

“If the government is worried about protecting against too much in the way of lost revenues, we would suggest even matching the US reduced rate on only the first 25,000L of alcohol produced which effectively more than halves the benefit but still will stimulate massive growth in our domestic sector,” Dyck’s letter said.

“Given the collective need to recover our economy, we believe this would be an ideal time to act and give the public positive news about creating well paying jobs while promoting value-added agriculture.”

READ MORE: ‘It’s obscene’: Okanagan Spirits irked after government turns back on Canadian distilleries


Brendan Shykora
Reporter, Vernon Morning Star
Email me at Brendan.Shykora@vernonmorningstar.com
Follow us: Facebook | Twitter

Distilleries

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A map released by the BCCDC on Jan. 15 shows the number of new COVID-19 cases reported for each local health area between Jan. 3 and 9. (BCCDC Image)
Salmon Arm and Vernon see increase in new COVID cases, curve flattening elsewhere

The rate of new cases is levelling off in Kelowna, Penticton and Revelstoke.

The Premier Hotel on Summerland’s Main Street and the taxi were owned by Bill and Lydia Johnston. Today, the building is Sass Fashions in Summerland. H.S. Kenyon, who moved the building to Summerland from Midway, continued with building construction. His family now operates Greyback Construction. (Photo courtesy of the Summerland Museum)
Two former Summerland hotel buildings have been moved over the years

Transport of buildings is part of community’s history

Interior Health update. File photo.
86 new COVID-19 cases, two more deaths in Interior Health

The new deaths are from Heritage Square, a long-term care facility in Vernon

Keremeos Village town hall. (File photo)
Second electronic public meeting for Official Community Plan update Feb. 1

The first virtual public meeting was scheduled for Nov. 18

Keith the curious kitten is seen on Nov. 4, 2020 at the Chilliwack SPCA. Friday, Jan. 22, 2021 is Answer Your Cat’s Questions Day. (Jenna Hauck/ Chilliwack Progress file)
Unofficial holidays: Here’s what people are celebrating for the week of Jan. 17 to 23

Answer Your Cat’s Questions Day, Pie Day and International Sweatpants Day are all coming up this week

(Phil McLachlan - Capital News)
‘Targeted’ shooting in Coquitlam leaves woman in hospital

The woman suffered non-life threatening injuries in what police believe to be a targeted shooting Saturday morning

The organizer of a Kelowna protest against COVID-19 restrictions was fined by the RCMP for the third time Saturday, Jan. 16, 2021. (File photo)
COVID-19: Organizer of Kelowna anti-restriction protest ticketed for third time

The individual’s latest ticket for $2,300 was handed out by RCMP at an anti-lockdown rally Saturday

Mount Boucherie Secondary School is one of three Kelowna schools with confirmed cases of COVID-19, according to an update from the school district Saturday, Jan. 16, 2021. (File photo)
COVID-19 confirmed at 3 Kelowna schools

Interior Health has confirmed exposures at Mount Boucherie, Springvalley and South Rutland schools

Half of the most expensive homes are on 2080 Mackenzie Crt, which is across the street from Revelstoke Mountain Resort. (Liam Harrap/Revelstoke Review)
The 10 most valuable homes in Revelstoke for 2020

Combined, the properties are worth more than $35M

Lake Country native Evan-Riley Brown is in the cast for the new film Journey To Royal: A WW II Rescue Mission to be released on video on demand and streaming services on Feb. 2. (Contributed)
Okanagan actor lands role in WW II movie

Evan-Riley Brown, from Lake Country, cast in production labelled as hybrid of a feature film and documentary called Journey To Royal: a WW II Rescue Mission.

JaHyung Lee, “Canada’s oldest senior” at 110 years old, received his first dose of the COVID-19 vaccine on Thursday, Jan. 14, 2021. He lives at Amenida Seniors Community in Newton. (Submitted photo: Amenida Seniors Community)
More than 20 days have passed since the last case of COVID-19 was confirmed at Lakeside Manor. (File photo)
Salmon Arm retirement facility reopens social areas after COVID-19

More than 20 days have passed since last confirmed case at Lakeside Manor

A unique-looking deer has been visiting a Nanoose Bay property with its mother. (Frieda Van der Ree photo)
A deer with 3 ears? Unique animal routinely visits B.C. property

Experts say interesting look may be result of an injury rather than an odd birth defect

Most Read