That is exactly the problem, and my thanks to our senior official for explaining it. That is what the late Jacques Parizeau used to call an escalating tax, which operates much like a staircase. In other words, it goes up but it never goes down. It always goes up. It means an additional burden on taxpayers, the customers, but also on the companies with employees, like restaurants or licensed premises.
That is why the association that represents the manufacturers of alcoholic beverages was really unhappy following this announcement. Here is what its CEO said in a media release:
We are absolutely shocked and dismayed that the federal government has decided to saddle Canadian Spirits manufacturers with higher taxes at this time...
A little further into the release, he gets directly to the heart of the problem:
The budget proposal to automatically adjust federal excise duties to CPI is a return to the failed policies of the past. Between 1981 and 1986, annual automatic adjustments to alcohol excise duties resulted in massive job losses, and plant closures across the country.
I understand that we are not in a partisan arena. So I will ask a technical question in the hope of getting a technical answer. Has the Department of Finance evaluated the consequences this might have on manufacturers of alcoholic beverages and the businesses that sell them, like licenced premises and restaurants?