Beer and Wine Tax

Beer and wine taxes are included in the price you pay for wine and wine coolers that you buy from an Ontario winery retail store, on or off the winery site, and beer made by an Ontario beer manufacturer, microbrewer or brew pub that you buy from:

  • Brewers Retail Inc. (i.e., The Beer Store)
  • licensed establishments, such as restaurants, bars and brew pubs
  • on-site retail stores of beer manufacturers or microbrewers, and
  • southern agency stores of the LCBO (e.g., cottage-country agency stores).

Who pays beer and wine taxes?

If you buy beer made by Ontario beer manufacturers, microbrewers or brew pubs from beer vendors, or wine or wine coolers from winery retail stores in Ontario, you pay tax on those beverages.

Beer and wine taxes are included in the price you pay for the beverage.

If you make your own beer, wine or wine coolers, or if you purchase these beverages from the Liquor Control Board of Ontario (LCBO), you do not pay beer and wine taxes on those beverages.

Tax rates

Beer

Beer tax includes:

  • beer basic tax
  • volume tax
  • environmental tax (if applicable).

Draft beer made and bought at a brew pub or a secondary location of the brew pub is subject to the beer basic tax only.

Beer basic tax

The beer basic tax is calculated based on the volume of beer bought.

The tax rate that applies to the beer depends on:

  1. what type of beer it is (draft beer (e.g., from a keg larger 18 litres or larger) or non-draft beer (e.g., bottled beer), and
  2. who made the beer (beer manufacturer, microbrewer, or brew pub).
Beer Basic Tax Rate
Effective Date Beer made by Ontario Beer Manufacturers Beer made by Ontario Microbrewers Beer made and sold at Ontario Brew Pubs
Draft beer Non-Draft beer Draft beer Non-Draft beer Draft Beer
March 2, 2015 to
October 31, 2015
60.15 ¢/L 76.63 ¢/L 23.66 ¢/L 26.64 ¢/L 22.96 ¢/L
November 1, 2015 to February 29, 2016 63.15 ¢/L 79.63 ¢/L 26.66 ¢/L 29.64 ¢/L 25.96 ¢/L

For example, on a 341mL bottle of beer made by a microbrewer purchased on March 15, 2015, the beer basic tax will be 0.341L × $0.2664/L = $0.0908.

Adjustments to beer basic tax rates

The beer basic tax rates are adjusted annually in March to factor in inflation, and is based on the Consumer Price Index for Ontario over the past three years. Pursuant to the 2015 Ontario Budget, there is an increase of 3 cents per litre to the rates on November 1 in each of 2015, 2016, 2017 and 2018, in addition to the annual adjustments.

Who are microbrewers

To be considered a microbrewer for a given sales year, all of the following conditions must be met:

  1. The brewer's worldwide production (not just in Ontario) for the past production (calendar) year is not more than 50,000 hectolitres (5 million litres). This figure includes all of the beer:
    • the brewer makes, even if the beer is made for another brewer
    • the brewer's affiliates make, even if the beer is made for another brewer, as well as
    • any other brewer makes for the brewer or for any of the brewer's affiliates
  2. if the brewer has an affiliate that also makes beer, that affiliate must also be a microbrewer
  3. if there is a beer‑making arrangement where another brewer makes beer for the brewer, that other brewer must be a microbrewer, and
  4. if there is a beer‑making arrangement where the brewer makes beer for another brewer, that other brewer must be a microbrewer.

NOTE: Pursuant to the 2015 Ontario Budget, the requirement in the fourth criterion listed above has been amended. A microbrewer will not lose its microbrewer status if it makes beer for a non‑microbrewer who lost its microbrewer status for the sales year due to the fact that it had a non‑microbrewer manufacture beer for it in the past production year.

If you are a microbrewer for the current sales year and wish to remain a microbrewer in the upcoming year, you must meet all of the above conditions or you will lose your status as a microbrewer and any resulting benefits.

To know more about requirements to qualify as a Microbrewer, please see the Frequently Asked Questions for Microbrewers.

Read on: list of Ontario beer manufacturers and microbrewers and the brands of beer they make.

Beer volume tax

The beer volume tax is calculated based on the volume of beer bought. The tax rate is 17.6 cents per litre regardless of whether the beer is draft beer or non‑draft beer and whether the beer was made by a beer manufacturer or a microbrewer.

The beer volume tax does not apply to draft beer made and bought at a brew pub or a secondary location of the brew pub.

Environmental tax

The environmental tax is 8.93 cents for each non‑refillable container in which the beer bought is packaged.

The environmental tax does not apply to draft beer made and bought at a brew pub or a secondary location of the brew pub.

Historical Beer Taxes Rates

Beer Basic Tax Rate
Effective Date Beer made by Ontario Beer Manufacturers Beer made by Ontario Microbrewers Beer made and sold at Ontario Brew Pubs
Draft beer Non-Draft beer Draft beer Non-Draft beer Draft Beer
March 3, 2014 to
March 1, 2015
59.20 ¢/L 75.42 ¢/L 22.71 ¢/L 25.43 ¢/L 22.60 ¢/L
March 1, 2013 to
March 2, 2014
58.10 ¢/L 74.02 ¢/L 21.61 ¢/L 24.03 ¢/L 22.18 ¢/L
March 1, 2012 to February 28, 2013 56.79 ¢/L 72.35 ¢/L 20.30 ¢/L 22.36 ¢/L 21.68 ¢/L
March 1, 2011 to February 29, 2012 55.68 ¢/L 70.94 ¢/L 19.19 ¢/L 20.95 ¢/L 21.26 ¢/L
July 1, 2010 to
February 28, 2011
54.75 ¢/L 69.75 ¢/L 18.26 ¢/L 19.76 ¢/L 20.90 ¢/L

Wine

Wine tax includes:

  • wine basic tax
  • volume tax
  • environmental tax.

Wine basic tax

The wine basic tax is calculated as a percentage of the 'retail price' of the wine or wine cooler bought. The 'retail price' is the price set for the wine or wine cooler by the LCBO (or the winery if the LCBO has not set a price), less the total of:

  • any deposit on the container, and
  • all taxes imposed on the purchase of the beverage under
    • Part IX of the Excise Tax Act (Canada) (i.e., the harmonized sales tax), and
    • Alcohol and Gaming Regulation and Public Protection Act, 1996 (i.e., the wine‑tax).

The tax rate that applies to the retail price of the wine or wine cooler depends on whether it is an Ontario or non-Ontario wine or wine cooler:

Type of Wine or Wine Cooler Wine Basic Tax Rate
Ontario Wine or Wine Cooler 6.1 per cent of retail price of wine or wine cooler
Non-Ontario Wine or Wine Cooler 16.1 per cent of retail price of wine or wine cooler

For tax purposes, 'Ontario' generally means that the wine or wine cooler is produced from 100 per cent Ontario-grown produce.

Wine volume tax

The wine volume tax is calculated based on the volume of wine or wine cooler bought.

The tax rate depends on whether the beverage is wine or a wine cooler:

Type of Product Wine Volume Tax Rate
Wine 29 ¢/L
Wine Cooler 28 ¢/L

For example, on a 750mL bottle of wine sold at a winery retail store, the wine volume tax would be 0.750L × $0.29/L = $0.2175.

Environmental tax

The environmental tax is 8.93 cents for each non‑refillable container in which the wine or wine cooler bought is packaged.

Ontario beer vendors, beer manufacturers, microbrewers, brew pubs and wineries

An Ontario beer manufacturer, microbrewer or licensee of a brew pub collects the beer tax and amounts on account of the beer tax on the beer it distributes in Ontario and must report and remit them to the Ministry of Finance. The reporting period is for each month and the return and tax remittance must be received by the 20th day of the next month.

An Ontario winery collects the wine tax on the wine and wine coolers it distributes in Ontario and must report and remit them to the Ministry of Finance. The reporting period is for each month (or, if the winery qualifies and elects, each set quarter) and the return and tax remittance must be received by the 20th day after the end of the reporting period.

Filing a beer tax return or a wine tax return

Learn how to complete your beer tax return and schedules or your wine tax return.

Information about filing requirements, supporting schedules, penalties for late filing and failure to remit tax collected or payable and payment information for remitting the tax is also provided.

When beer vendors, breweries and wineries are deemed to be buyers of their own products

An Ontario beer manufacturer, microbrewer or licensee of a brew pub is deemed to be the buyer of the beer that it distributes in Ontario without charge and must pay the beer tax on that beer. A beer vendor is deemed to be the buyer of the beer that it buys but does not sell.

An Ontario winery is deemed to be the buyer of the wine and wine coolers it distributes in Ontario without charge and must pay the wine tax on that wine or wine cooler.  If an Ontario winery provides samples of wine or wine coolers at a charge and the charge does not cover all of the wine tax associated with that sample, the winery is deemed to be the buyer of the sample to the extent of the shortfall and must pay the shortfall in the wine tax for that sample.

Limited exemption for Ontario beer manufacturers, microbrewers, brew pubs and wineries

An Ontario beer manufacturer, microbrewer or licensee of a brew pub can claim a limited exemption from the beer tax on up to 10,000 litres of beer per sales year that it makes and distributes in Ontario without charge to promote its beer. 

Read on: Promotional distribution exemption for Ontario beer manufacturers and brew pubs.

An Ontario winery can claim a limited exemption from the wine tax on up to 10,000 litres of wine and wine coolers per annual period that it makes and distributes in Ontario without charge to promote its wine and wine coolers. 

Read on: Promotional distribution exemption for Ontario wineries.

Tax Credit for Small Beer Manufacturers

The Taxation Act, 2007, includes a refundable corporate tax credit for small beer manufacturers. Beer manufacturers with permanent establishments in Ontario may qualify in respect of eligible sales of draft and non‑draft beer sold to purchasers in Ontario during a sales year, if they meet certain criteria, including limits on production.

To know more about the Small Beer Manufacturers Tax Credit, please see the Frequently Asked Questions

For additional information, refer to the Taxation Act, 2007, or contact the Ministry of Finance at 1 866 ONT‑TAXS (1 866 668‑8297).

Tax‑included pricing

The purchase price of all beer sold by beer vendors (including beer manufacturers and microbrewers that operate their own brewery retail store) to purchasers and all wine and wine coolers sold by wineries at winery retail stores to purchasers must include all beer and wine taxes payable.

Beer vendors and wineries must provide information on the amount of the beer and wine taxes included in the price in a manner approved by the Minister of Finance.

Read on: Tax‑included pricing and requirements for beer vendors and wineries.

Alcohol licensing

The Alcohol and Gaming Commission of Ontario (AGCO) and LCBO are responsible for the general regulation of the beer and wine industries in Ontario, including the licensing of alcohol manufacturers and sellers.


Frequently Asked Questions for Microbrewers

What are 'sales year' and 'production year'?

A sales year is a period of approximately twelve months that runs from March 1 to the end of the next February unless:

  • March 1 is a Saturday or Sunday, in which case the sales year begins on the following Monday.
  • The last day of February is a Friday or Saturday, in which case the sales year ends on the following Sunday.

A production year in relation to a sales year is the calendar year immediately before the beginning of the sales year. For example, for the sales year from March 2, 2015 to February 29, 2016, the relevant production year is January 1, 2014 to December 31, 2014.

What does the annual worldwide production include when determining whether a brewer qualifies as a microbrewer?

For a brewer to be considered a microbrewer for a sales year, its annual worldwide beer production for the past production year must not be more than 50,000 hectolitres (5 million litres). Worldwide production means anywhere in the world, not just Ontario, and includes all beer manufactured during the production year by:

  • the microbrewer, even if the beer is manufactured under contract for another brewer
  • any affiliate of the microbrewer, even if the beer is manufactured under contract for another brewer, and
  • another microbrewer under contract for the microbrewer (or its affiliates).

Could having a contracting arrangement with another brewer affect a brewer's 'microbrewer' status?

Yes. If the microbrewer or any of its affiliates has a beer‑manufacturing arrangement with any other brewer, that other brewer must also be a microbrewer in order for the brewer to qualify for and maintain the 'microbrewer' status.

A microbrewer cannot have any beer‑manufacturing arrangement with a non‑microbrewer if it wishes to remain a microbrewer. This includes an arrangement for the microbrewer or its affiliate(s) to manufacture beer for the non-microbrewer, or for the non‑microbrewer to manufacture beer for the microbrewer or its affiliate(s).

NOTE: Pursuant to the 2015 Ontario Budget, this requirement has been slightly amended. A microbrewer will not lose its microbrewer status if it makes beer for a non-microbrewer who lost its microbrewer status for the sales year due to the fact that it had a non‑microbrewer manufacture beer for it in the past production year.

I am a microbrewer and have an arrangement for final packaging with a non‑microbrewer. Will this arrangement affect my microbrewer status?

An arrangement with a non‑microbrewer for only final packaging of your beer will not affect your microbrewer status.

In some cases, final packaging of the beer requires the filtering and carbonation process be performed immediately before the packaging, and in certain circumstances, some substances can only be added to the beer at the time of final filtration. In these situations, provided that they must be performed as part of the final packaging, filtering, carbonating and addition of substance will not affect your microbrewer status.

Does a brewer need to meet the conditions every year to maintain its 'microbrewer' status?

Yes.


Frequently Asked Questions about the Small Beer Manufacturers' Tax Credit

What is the Small Beer Manufacturers' Tax Credit?

The Alcohol and Gaming Regulation and Public Protection Act, 1996 (AGRPPA) imposes a basic beer tax on purchases in Ontario of all beer made by Ontario beer manufacturers, with microbrewers benefiting from reduced beer basic tax rates.

To qualify as a microbrewer and benefit from the reduced beer basic tax rates, one of the requirements is that the microbrewer's worldwide production of beer for the production year must not be more than 5 million litres or 50,000 hectolitres (hL).

To complement the beer basic tax under the AGRPPA, the Small Beer Manufacturers' Tax Credit under the Taxation Act, 2007 provides for a refundable tax credit available to beer manufacturers having worldwide production in the previous year over 5 million litres (50,000hL) but less than 15 million litres (150,000hL).

Who qualifies for the credit?

A beer manufacturer may qualify in respect of eligible sales of draft and non‑draft beer sold to purchasers in Ontario during a sales year, if it meets certain criteria&Nbsp;including:

  • it has a permanent establishment in Ontario
  • it cannot be a microbrewer eligible for the reduced beer basic tax rates, and
  • its worldwide production of beer for the previous production year must be over 5 million litres (50,000hL) but less than 15 million litres (150,000hL).

How much is the tax credit?

The maximum tax credit available to an eligible small brewer is $2,499,500 for non‑draft beer and $1,824,500 for draft beer on eligible sales exceeding 50,000hL and up to and including 75,000hL. The tax credit is subject to a phase‑out once eligible sales exceed 75,000hL and is fully eliminated when eligible sales exceed 150,000hL in the sales year.

How to receive the credit?

To receive the tax credit, a beer manufacturer must apply not more than 2 years after the end of the sales year for which it was eligible for the credit.

Provided it qualifies, a beer manufacturer will receive the tax credit as a lump‑sum at the end of the sales year for which it is eligible for the credit. However, it may receive the tax credit in monthly instalments during the sales year if the request is made before the start of the sales year for which it is eligible for the credit.

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