Beer photo at Big Rock Brewery in Calgary.
Stuart Dryden / STUART DRYDEN/CALGARY SUN/QMI AGENCY
Calgary-based Big Rock Brewery says it is laying off staff as a result of provincial beer tax policy.The 33-year-old brewery announced in a news release Wednesday afternoon that it has undertaken significant cost-cutting measures, including work force reductions, in response to the “persisting regulatory environment” for brewers of its size in Alberta.“We recognize that personnel reductions are difficult for our employees, their families and the community,” said Big Rock CEO Wayne Arsenault in the release. “We will continue to work with the new Government of Alberta to establish a positive regulatory environment for small brewers in the province that is predictable, stable and supports growth.”Big Rock said if no changes are made to the way Alberta taxes beer production, it expects its net provincial liquor tax charges to increase from $10.7 million in 2018 to greater than $21 million for fiscal 2019 (based on 2018 Alberta sales volumes).Under former Premier Rachel Notley, Alberta’s NDP government began in 2015 to tinker with the province’s beer markup framework. At the time, Alberta had graduated beer markup levels, meaning brewers who sold beer in the province were taxed based on their size (for small craft brewers, the markup was as little as 20 cents a litre). It did not matter whether a brewer was based in Alberta or another jurisdiction.But in an effort to stimulate the growth of the local craft beer sector, the NDP government hiked the markup on all beers made by operators outside of the New West Partnership Trade Agreement — Alberta, Saskatchewan and British Columbia — to $1.25 a litre. Facing complaints the changes were a barrier to interprovincial trade, Alberta altered the rules again in 2017, instituting a flat markup rate of $1.25 a litre on all beer, regardless of where it is produced or the size of the brewer. A new grant program was introduced for small Alberta brewers (brewing less than 50,000 hectolitres per year) that essentially offset the higher markup.However, in light of ongoing trade and legal challenges, the government eliminated that grant in late 2018. Big Rock said that in its Q1 2019 financial report that the move to eliminate the grant resulted in a 104 per cent increase in net beer tax on Big Rock sales, resulting in the need for “significant price increases” and cost-cutting inititiatives.Big Rock has brewing operations in Calgary, Vancouver, Toronto and sales in five Canadian provinces and two territories.The company was founded by Ed McNally in 1985.More to come…..email@example.comTwitter.com/AmandaMsteph