In all sincerity, I really appreciate the quality of our guest’s reply. We really have gotten into a lot of the fine details.
However, it is a concern for manufacturers. Their profit margin has gone down over the years. Once it was 8.4%, now it is 4.3%. Competition plays a role, but the associated taxes, which are now actually becoming escalator taxes, also play a major role.
That is why the restaurateurs association said the following:
This inflationary approach to beverage alcohol taxes was tried unsuccessfully in the 80s and resulted in sales declines and job losses.... [O]ur future is at risk as is our ability to create jobs and spur economic growth.
When you create an escalator tax, as they are called, it has a direct effect not only on the people on the front lines, but also on the entire industry.
I quote the wine and spirit manufacturers association once more:
Higher excise taxes will reduce industry investments in our plants and brands, force a scaling back of innovation, depress sales, reduce our grains' purchases from Canadian farms, and lower our new export market development.
My sincere thanks to the witnesses who are here to give us precise explanations. But, in reality, this escalator tax, invented, created and imposed by the Liberal government, is going to have a negative effect on the Canadian economy.