Hawes critical of taxation change

The Abbotsford-Mission MLA is calling for the government to take a second look at regulation change

Abbotsford-Mission’s MLA is speaking out after deputy premier Rich Coleman announced a taxation change that would aid smaller breweries.

On Wednesday, Randy Hawes criticized the BC Liberal government of essentially giving a subsidy and “big market advantage” to one company, Pacific Western Brewers (PWB), which he asserts is no longer a smaller brewery.

“This is fundamentally unfair,” said the backbench, three-term MLA who does not plan to run in the May 2013 election. “I don’t know why we’re doing this. I think this should be pulled back and changed.”

Coleman is the minister responsible for liquor policy and put forward Wednesday a new regulation which calls for the mark-up rate breweries pay to increase incrementally between annual production of 160,000 and 300,000 hectolitres.

Smaller breweries are taxed at a lower rate than big commercial operations, until this week paying a flat tax of $1.75 per litre of bottled or canned beer and $1.20 per litre of draft. That rate applied until annual production reached 160,000 hectolitres, at which point the higher commercial brewery rate applied to the entire production run.

Reaching that threshold would trigger a tax increase in the millions of dollars, and PWB of Prince George was the only B.C. producer getting close, partly from increased sales of its low-priced line of Cariboo beers.

The company asserted if the rules hadn’t been changed, that it would have had to shut down for a month.

Coleman said Monday the new system creates a sliding scale of tax rates for smaller brewers that takes them up to the commercial tax rate of big breweries when they reach 300,000 hectolitres of annual production.

This is said to benefit seven B.C.-based breweries, according to government.

The pending change prompted reaction from the National Breweries Association which in turn contacted MLAs.

– with files from Tom Fletcher and Langley Times

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