CALGARY -- The Alberta government argued for the constitutionality of its craft beer program in court today following legal challenges by out-of-province breweries.
Toronto-based Steam Whistle Brewing and Saskatoon-based Great Western Brewing Co. say the system, which charges all small breweries $1.25 per litre sold but returns much of that to Alberta producers in the form of a grant, effectively provides an unconstitutional trade barrier.
Lawyer Sean McDonough defended the government's position at the Court of Queen's Bench in Calgary, arguing the markup is not a tax, and that the Alberta government has the right to support its small breweries.
He said many provinces help their small brewery industries through tax rebates, direct grants, and preferential treatment in government-run retail stores, with Alberta simply doing the same.
The current program in Alberta replaced an earlier markup on breweries that only applied to provinces east of Saskatchewan, which was abandoned after Steam Whistle secured an injunction against the old system in January 2016.
Great Western Brewing president Michael Micovcin said the new system has led to a loss of a third of his sales, since Alberta breweries can charge less knowing they'll get the markup back as a rebate.