Debates of March 22nd, 2023

Opposition Motion—Tax Increase on Beer, Wine and Spirits

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Madam Speaker, I have a question and a comment from the Rheault Distillery in the riding of Algoma—Manitoulin—Kapuskasing, in northern Ontario. A minister said that there is a graduated system for the excise tax on beer, but as the member is well aware, the reality is that the government forgot about small distilleries. No matter what volume is produced, whether it be 1,000 litres or a million litres, all distilleries pay the same tax.

Does the member agree that the graduated system that is used for breweries should also apply to distilleries?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I thank my hon. colleague from New Westminster—Burnaby for his question and suggestion.

As I said in my speech, we got that proposal adopted some time ago. I also believe that, when I served with the hon. member on the Standing Committee on Finance, those were the kinds of measures that we adopted and then asked the government to look at and implement. Those measures sought to promote local products and to give small business owners just starting out, including those in the spirits sector, an advantage when entering the market.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, as a proud resident of Abitibi-Témiscamingue, I can say that microbreweries are at the heart of our identity.

Whether we choose the Foublonne or Brother John from Trèfle Noir in Rouyn‑Noranda, the stout from Pierre de fée in La Sarre, the Blonde du Frère Moffett from Barbe Broue, in Ville‑Marie, and in Témiscamingue, the Tête de Pioche from the Prospecteur in Val‑d'Or, or simply a beer from a Quebec microbrewery we can pick up at the Chez Gibb cornerstore, there is always a way to have a drink from Abitibi‑Témiscamingue. We even have very good wines produced by the Domaine des Duc. The member for Joliette has even tasted it.

The Conservatives' motion essentially replicates the recommendation in the pre-budget consultation report of the Standing Committee on Finance that called on the government to freeze the federal excise tax on beer, spirits and wine at the 2022 rates for the 2023 and 2024 fiscal years until inflation returns to the Bank of Canada's target range, somewhere between 1% and 3%.

The excise tax on alcohol is a fixed amount by volume. Traditionally, that amount has been occasionally reviewed in a budget implementation bill. Since 2017, the law has set out an automatic escalator formula based on the consumer price index. As a result, the excise tax will go up 6.3%, reflecting the high level of inflation we experienced in 2022.

We will therefore be supporting the Conservative motion because, in the midst of this inflationary surge, hiking a consumption tax that would further increase prices would be ill-advised.

That said, admittedly, the impact of the alcohol excise duty escalator on the final selling price of the product will be rather minimal. We are talking about 1¢ per can of beer.

This motion is not a real response to the inflationary pressure on food prices. Moreover, only the big brewers would truly benefit from the adoption of this motion. Regional microbreweries pay only a fraction of the excise tax and will therefore benefit much less from the tax rate freeze.

In fact, thanks to pressure from the Bloc Québécois in 2006, it is only after 75,000 hectolitres that a microbrewery pays the full tax rate. Under that amount, the cost varies between 10% and 85% of the value of the tax depending on the number of hectolitres produced.

Of the 1,200 breweries in Canada, including the more than 300 in Quebec, only 12 pay the full amount of the excise tax on the majority of their production. Most of these 12 breweries are owned by foreign multinationals.

There are other ways to help microbreweries and their brewmasters, who introduce us to new flavours. For example, the government could exempt microbreweries from paying the tax on the first 10,000 hectolitres, as recommended by the Canadian Craft Brewers Association. In fact, 80% of microbreweries produce less than 2,000 hectolitres per year.

The regulations on the excise tax and its escalator based on capacity made it possible for many craft microbreweries to expand, but the 75,000-hectolitre threshold is now a barrier to their growth, according to the Canadian Craft Brewers Association, which I salute. Another solution that would help our local businesses compete against the big breweries would be to raise the threshold while keeping the rate brackets.

One of the positive aspects of the 2022 spring budget was the excise tax exemption for producers of cider and mead, such as Mieillerie de la Grande Ourse de Saint‑Marc‑de‑Figuery. I salute the member for Joliette for waging and winning this battle. His example should be followed and should provide further inspiration to the government today.

However, the government still has a very restrictive definition of what constitutes cider and mead. Producers who flavour their products with berries or aromatics continue to pay the tax. The Bloc Québécois hopes that all of this will be resolved in the upcoming budget.

We also hope that the excise tax exemption will apply to producers who make wine from other types of fruit, such as blueberries, which promote our region.

In Val‑d'Or, in the riding of my neighbour from Abitibi—Baie-James—Nunavik—Eeyou, there is a a company that specializes in producing distilled beverages. Spiritueux Alpha Tango produces Bravo Charlie and Echo Foxtrot gin, Valentine amaretto, Mission Kosmos vodka and even Mayday liqueur, which is made of black spruce and cinnamon. I want to say that Quebec's microdistilleries are on an impossible mission to the cosmos and that their mayday signal is not receiving an answer from the government. That is a problem. Even their gin is made using cattails. There is something interesting and inspiring about that.

With the excise tax at over $12 per litre of alcohol, a bottle of Alpha Tango gin will cost 25¢ more. That is not a catastrophic increase, but it is in addition to the general increase in prices. As the saying goes, it takes four quarters to make dollar.

The Bloc Québécois would have proposed a different solution than the Conservatives. We need to duplicate the microbrewery model for microdistilleries and impose only a fraction of the tax that is charged to industry giants. That way, a bottle of Grande dérive, from Miellerie de la Grande Ourse, would cost $3 less per bottle instead of the meagre 25¢ being discussed today. This would apply to all those small, local producers who give us a taste of their regional expertise.

I sincerely hope that the government will listen to this suggestion. It would allow our flavour artisans to benefit from a more targeted measure. Nevertheless, I repeat, we will support the Conservative motion because its merit lies in the message that the House is sending to the government.

That being said, the solution to inflation is not simply a measure like this. Microbreweries in Abitibi-Témiscamingue have a long list of problems. In early February, Le Trèfle Noir, a source of pride in Rouyn Noranda, sold its recipes to Lagabière, a microbrewery in Saint-Jean-sur-Richelieu. Owner Alexandre Groulx, whom I commend, said that inflation, the pandemic and the labour shortage led him to sell part of his business.

Our entrepreneurs need more than a band-aid solution. They need concrete solutions. We must ensure that our farmers benefit from measures to help them produce, in particular by creating a special emergency account similar to what was done during the pandemic, which would help ensure they are supported when they need it. There is a significant cash flow crisis within the farming community. Obviously, these are the raw materials used by our microbreweries and microdistilleries. We also need to address the labour shortage in all our regions and the housing crisis.

These two problems are hindering the economic development of Abitibi—Témiscamingue. Some measures do exist, including a tax credit for returning recent graduates, a tax credit for immigrants who choose the regions of Quebec, tax incentives for experienced workers, increased transfers for the creation of social and community housing, and so on. The Bloc Québécois has solutions. We need the government to listen. With the budget only one week away, I hope it is listening.

In conclusion, I invite all parliamentarians to support local microbreweries and microdistilleries, especially those in Abitibi—Témiscamingue. They will see that our products are full of local flavours, and I am sure they will become their favourites. Above all, they will have to enjoy them in moderation.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Madam Speaker, I have to agree with the member on the subject. Beyond capping this escalator tax, we really should be looking at restructuring the excise tax, especially for spirits.

We also have the craft breweries of Canada asking for that, even though they have the staggered rise in excise tax based on how much they produce. It is way more than breweries or distilleries are paying in the United States, for instance.

Could the member comment further on that? This is something that should be looked at. The distillers in my riding are very concerned about the unfairness of the way the excise tax for spirits is calculated today.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, I thank my colleague for his interest in this issue. I recently met Jean‑François Nellis, the owner of Pit Caribou since 2019. Pit Caribou is one of the most important microbreweries in the Gaspé and a member of the Association des microbrasseries du Québec.

One of the things we talked about is the notion of the space in which microbreweries operate, which is of vital importance. The microbrewery model brings life and vigour to an area. It is good for the tourism industry and it is obviously good for the local economy.

People say that microbreweries create jobs and contribute to the social fabric. Microbreweries are often located in the regions. One-third of microbreweries are found in towns with a population of less than 10,000. That is really interesting. When looking for ways to ensure that our economy is not centred just in Toronto or on oil from western Canada, we can really see a solution in microbreweries.

To answer my colleague's question, one of the fundamental issues is the notion of liquidity. Companies need to have liquidity and the excise tax has a direct impact on that. Cutting the excise tax will help our microbreweries improve their ability to invest, develop new products and innovate.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Madam Speaker, 88% of the beer Canadians enjoy is brewed and created here in Canada by over 20,000 hard-working Canadians employed by these breweries, whether microbreweries or large breweries like Pacific Western Brewing in my town of Prince George. They are worried. The unions are worried and labour is worried. The breweries are saying they cannot handle a 6% tax increase.

I want to ask if my hon. colleague is hearing the same in his riding as we are hearing, if the breweries are saying the same things. Maybe he has some more stories he can tell us about how these breweries are just worried about the next day and whether or not they are going to be able to keep the doors open.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, I thank my colleague from Cariboo—Prince George for the question. I am pleased to see him here in person in the House.

Indeed, these discussions are under way. It is not easy for businesses to survive, especially SMEs and especially because of COVID‑19. That is what the owner of the Trèfle Noir microbrewery said.

My colleague from Joliette managed to get the excise tax on spirits reduced. David Ouellet, from Miellerie de la Grande Ourse developed a gin and a mead. His products enjoy great commercial success, so much so that he has a hard time producing enough. By lowering this tax, we encourage creation. I will say that again because it is a clear example. This lends itself to local pride and a sense of belonging. We need to listen to that and give businesses some oxygen. In an inflationary context, this is something that is essential.

These producers will return this to us one-hundred-fold because this promotes our regions and that is invaluable. Obviously, this creates jobs and we cannot pass on that.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Madam Speaker, I will be sharing my time with the wonderful MP for Elmwood—Transcona.

My riding of South Okanagan—West Kootenay is the finest in the country in many ways, but one of its best features is the thriving beer, wine and spirits sector. I think everyone here knows that we make the best wine in Canada, but we might be here all night if I were to list all of those wineries. Perhaps fewer know the sheer number and quality of craft breweries, so I would like to try to list them here, with apologies if I miss any. Abandoned Rail, Cannery, Highway 97, Neighbourhood, Slackwater and Tin Whistle are all in Penticton. There is also Firehall in Oliver, North Basin in Osoyoos, Rossland Beer in Rossland, Trail Beer Refinery in Trail, and Tailout Brewing in Castlegar.

Then there are the distilleries. We have Legend Distilleries in Naramata. It used to be my old doctor's office, but it has been turned into a distillery. We have Maple Leaf Spirits and Old Order in Penticton; Dubh Glas in Oliver, where my friend Grant Stevely makes what I think is the best gin in Canada, Noteworthy Gin; Tumbleweed in Osoyoos; Kootenay West in Trail; Tonik in Crescent Valley; and Kootenay Country Craft in Winlaw. There may be more. It is hard to keep up.

I was recently talking to my friends Jorg and Anette Engel, who own Maple Leaf Spirits, which is a small craft distillery in Penticton. It is one of the first craft distillers in the region, and they have taken advantage of the bountiful fruit of the Okanagan to produce award-winning brandies and other liquors. In fact, their brandy won the award for best brandy in Canada last year for the second time. As their business grew over the past 20 years, they saw other small distilleries establish in the region, and that strong growth in the craft distillery sector has been mirrored and even exceeded by the growth in the number of breweries and small wineries. This sector is therefore particularly important in South Okanagan—West Kootenay.

These businesses, many of them small family-owned companies, have combined two traditional pillars of the local economy, agriculture and tourism, to create a powerful new centre of growth for the region. However, like many sectors, this sector has been hard hit recently by soaring inflation. The cost of almost everything that goes into their products has been rising. The grain that goes into beer and spirits has more than doubled in price. The price of bottles has gone up. They also share another inflation-related challenge that no other sector has to deal with, and that is an excise tax that automatically rises as inflation rises. Since 2017, this tax has gone up every year without legislation or parliamentary debate, and this year it will increase by a whopping 6.3%, the largest one-year increase in the last 40 years.

Distillers like that of the Engels are going to be struggling to survive. They recently wrote me a letter, and I would like to read some of it here:

Our locally produced Craft liquors are more expensive in liquor stores than imported and multi-national brands, through the Federal Excise Tax. The rates of excise duty on spirits are adjusted annually on April 1st, based on changes to the Consumer Price Index. As a craft distillery, we now pay $1.74 in excise tax for each 375ml bottle.... That is $3.48 for each 750ml bottle, or $5.22 for each 1 liter bottle. Here in Canada, Excise is further more than doubled by 167% provincial mark-ups, to burden domestic distillers with a tax barrier of approximately $9 on every 1 liter bottle in a liquor store, increasing every year. In liquor stores, our products compete with liquor from the USA, who have reduced their excise tax to a fraction of what we must pay. We see an imbalance on the market. We want our products to get priced in liquor stores on a level playing field with products coming from out of country.

These concerns are shared with other distillers across the country. Marcel Rheault and Mireille Morin own Rheault Distillery in Hearst, Ontario. They have very similar concerns. They make Loon Vodka and other great products. They say they have to remain competitive, so they cannot mark up their prices to keep their margins intact. Again, this is echoed across Canada in every craft distillery, every craft brewery and every small winery in the country.

I want to be clear that all of these businesses are fine with paying the excise tax on beer, wine and spirits, but they are concerned about the fairness of how this tax is now structured and calculated. On top of the escalator feature, excise taxes on alcoholic beverages produced in Canada are treated differently depending on whether they are wine, beer or spirits, and very differently when compared with excise taxes levied by our biggest trading partner, the United States.

Excise taxes are much lower in the United States and are structured so that small producers pay much less, on a sliding scale, than bigger producers. In Canada, only the beer excise tax is scaled that way, by the size of the operation, but the average tax here is still much higher than it is in the United States. It is twice that, and the independent craft brewers of Canada would like to fix it.

One issue is the federal definition of a craft brewery, which is a brewery that produces less than 75,000 hectolitres of beer per year. If a brewery makes more beer than that, it pays the full excise tax. However, there are different definitions. In Alberta and Saskatchewan, the definition of a craft brewery is one that produces less than 400,000 hectolitres, and in the United States the definition means seven million hectolitres. That is what they consider a craft brewery south of the border. It is clear that it would be helpful for Canadian breweries if these definitions and regulations were synchronized as much as possible so that competition is as fair as possible. Craft brewers have put forward a reasonable suggestion to the government that would do just that, and I urge the Minister of Finance to consider it seriously.

The wine sector is in a special situation because most wineries in Canada never had to pay excise tax until last year, when Canada eliminated an exemption for wines made from Canadian grapes after a trade dispute with Australia. After strong lobbying from the wine industry, the federal government did step up with a support program to help wineries adapt to this new reality, but that support is set to disappear next year. The excise tax will continue after next year, of course, so it makes sense that a more long-term solution is needed.

Craft distillers are the hardest hit in many ways. As I mentioned earlier when reading the letter from Maple Leaf Spirits, the excise tax on a one-litre bottle is $5.22, and when we add provincial taxes, that goes up to about nine dollars. This makes it very difficult for local producers such as Jorg and Anette Engel to compete with imports from other countries that are taxed at a fraction of that rate. We need a similar restructuring of the excise tax on spirits to level the playing field.

These are all reasonable, common-sense recommendations, and I know from experience that the government will sometimes listen to such recommendations and make the right decisions. When the beer industry came to me last year and pointed out that de-alcoholized beer was being charged an alcohol excise tax, I put forward a private member's bill that would remove that tax. To its credit, the government included that provision in last year's budget, so it can be done.

The House of Commons finance committee has recommended that the government freeze the excise tax rate at 2022 levels for at least the next two years, and I hope the government takes up that advice for the budget coming next Tuesday. I also hope it will listen to Canadian producers of beer, wine and spirits and restructure the excise tax to make it fairer for small producers so that this sector can continue to make fine products and make a very important contribution to our local economies.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Madam Speaker, I appreciate our hon. colleague's speech, because for the first four minutes he entered into Hansard the names all the microbreweries and breweries in his riding. I think he owes a care package to all member who are currently present in the House.

When the escalator tax was introduced and brought in back in 2017 before COVID, Finance Canada officials testified at committee that the Liberals did no modelling on how this tax would impact small businesses and breweries all across our country. Why does the government continue its mismanagement of monetary policy? Is the member hearing the same as what we are hearing? Perhaps he has some suggestions on what the government can do to scrap the tax and make things more affordable for Canadians.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Madam Speaker, I thank the member for Cariboo—Prince George. It is good to see him in person. As others have said, we missed him here in person in this place. We know he has been active virtually, but I—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

I remind the hon. member not to mention the presence or absence of members in the House.

The hon. member.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Madam Speaker, I will retract that, but it is good to see him.

We do not want to scrap the tax. We want to restructure it so that it is fair. For it to go up 6% in one year when we are already facing the effects of inflation is too much to ask of these producers. We want it capped and we want all these taxes restructured so that small producers are treated fairly and can compete.

[Adam van Koeverden, Liberal, Parliamentary Secretary to the Minister of Health and to the Minister of Sport]

Madam Speaker, I would like to thank my friend and colleague from South Okanagan—West Kootenay for being an advocate for the wineries and small craft breweries in his riding. I have two breweries in my riding. Orange Snail and Third Moon are both awesome. They do a lot in our community. Andrews Farm produces wine as well, and we have strong connections to Pelee Island in Milton. That is a great Ontario winery.

This is all about balance, as my hon. colleague pointed out. It is not a matter of just scraping a tax all at once; I think that would be irresponsible. Consumption has an impact on the health care system, so we have to consider those ramifications.

On the topic of balance, how does my hon. colleague suggest we approach that? What would be reasonable? I agree with him that a 6.3% increase to the excise tax is not reasonable to ask our breweries, vineyards and spirit producers to shoulder. What would be appropriate?

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Madam Speaker, I do not think it would be too difficult to ask for. When the government brought in this escalator tax, inflation was pretty marginal. There was very little inflation, so it was only going up 1% or 2% per year. I would like to see something less drastic than just following inflation every year, because if it goes up 6%, that is drastic. What would be more important for these producers, especially the small producers, is to develop a fair sliding scale of excise tax payments that makes it easier for them to compete with the bigger players and especially the imports.

[Claude DeBellefeuille, Bloc, Salaberry—Suroît, QC]

Madam Speaker, I really enjoyed my colleague's speech. I had the opportunity to taste the wines produced in his riding. I have friends who live in the Okanagan Valley, in Summerland's Trout Creek area. It is really the place to have a nice drink and enjoy local flavours. He understands the Bloc Québécois's position. Quebec is home to many small craft producers who have developed berry wines and ciders.

Can my colleague explain why it is so important that the government listen and exempt these producers from the excise tax so that they can benefit—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

I must interrupt the hon. member.

I will give the hon. member for South Okanagan—West Kootenay 15 seconds to answer.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Madam Speaker, if someone makes cider or mead and then throws some berries into it, suddenly they are paying an excise tax. They do not pay it when it is produced without the berries. It does not make sense. I think that illustrates the excise tax needs a serious going over to make it fair in many ways.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, I want to tell the story of Marcel Rheault and Mireille Morin, the owners of the Rheault Distillery in Hearst, Ontario, which produces Loon Vodka. They cannot raise their price any more to be competitive. A 6% tax hike is something that is really going to hurt them and their product, which has won many awards for its quality. It is for people like Marcel and Mireille that we need to adopt this motion this evening.

I am very pleased to rise and talk a little bit about the situation in Winnipeg. We have a lot of local brewers and distillers in the province of Manitoba. I think especially of Crown Royal, but there are many beer makers in Manitoba, such as Half Pints, Barn Hammer, Torque and Little Brown Jug. I could go on; there are a number. Manitobans are pleased to support their local brewers when they reach into the fridge for a beer at the end of a long week, if that is their choice. We want them to be able to continue to do that and continue to support local economies when they do. However, the fact of the matter is that many producers, particularly smaller producers, are in a tight spot when it comes to an increase in the excise tax.

The excise tax is not based on a percentage of their revenue or of their profit; it is a certain amount they have to pay for every unit sold, so when it goes up, it really has an impact on their business model. Also, because that increase in the rate of tax is tied to inflation, we are seeing that be a particularly high increase this year.

I think it was always a problem having a tax tied to inflation, a tax levied at an absolute rate, which is raised at the rate of inflation. It is something that was raised in 2017-2018 when the Liberals first brought this in. People asked, “What if we have a period of extraordinary inflation?” They said, “Well, that is not likely to happen. Inflation has been very consistent.” Of course, we know that major events can change the course of an economy, and Canada, along with many other parts of the world, has certainly been experiencing that. We have had a major event with the pandemic and there are major events happening as a result of climate change. Those are having an impact on the economy.

As we see inflation go up, we should not see the government exacerbating the problem of inflation by having an automatic increase in the tax, which is not to say that no taxes can increase, but it is appropriate to have a debate and a vote in Parliament in order to have that happen. What we are seeing now is the fruit of a decision to take Parliament out of the equation and have those taxes increase automatically at the rate of inflation instead of increasing them deliberately by a choice of Parliament in the face of difficult economic circumstances.

As my colleague for South Okanagan—West Kootenay pointed out earlier, quite rightly, there are other issues with the excise tax. New Democrats support the idea of a more gradual ramping up of the excise tax in order to help smaller brewers and smaller producers be more competitive when they are trying to carve out a space for themselves in what is a very competitive market with a lot of established, large players. That is not exactly what the motion calls for tonight, but I think that is part of the larger conversation we might be able to have more readily in this place if the excise tax were not already on an automatic escalator.

It would mean that government would have to come back to this place every year if it wanted to see the excise tax go up, and that would create opportunities for parliamentarians, like New Democrats, who are interested in a fairer excise tax structure for smaller producers, to raise those issues at that time. Today, then, we are doing this in the context of an opposition day motion, because otherwise there is no natural opportunity to be able to discuss this kind of thing.

I do think there is a real argument to be made about the particular economic circumstances we find ourselves in for Canadians who enjoy the odd beer and who are already facing increasing costs on groceries, rent and everything else. They do not need an added increase in the excise tax on their beer.

There is an argument to be made for small businesses that are going to be distressed by having to pay these additional costs and worrying about whether they can raise their prices in order to pass that on to the consumer without just getting shut out of the market.

I also think there is a more general and principled argument about the role of Parliament in approving taxation, where we can have great debates in this place about what the appropriate rate of taxation is on various things, and I am sure that we can find at least as much disagreement as we find agreement on that. I think it is important that this debate come to this place and that increases in taxes are approved.

I would say this is just the other side of the coin of another measure that I do not personally support, which is indexing income tax brackets to inflation, too. I think that governments and legislatures, particularly, have a responsibility to evaluate the circumstances and make decisions, in a particular time, about what is appropriate.

If that is a change in tax brackets, that is something that should be deliberately debated and about which a very intentional decision should be made. When it comes to something like the excise tax, likewise, that is something that should be debated and there should be an intentional decision about it.

I think this mechanism of an automatic escalator is problematic because it removes people's democratically elected legislators from the equation when we are having important debates about what an appropriate rate of taxation is.

I am a member of the finance committee, and I was certainly very happy to see in the finance committee's pre-budget consultation report a recommendation to freeze this planned excise tax increase, so that lets us know that it is not just coming from one party. It takes a majority voice on a committee in order to issue a recommendation, and I think the government should take very seriously the fact that coming out of one of the most senior committees of the House of Commons was a recommendation not to proceed with this tax hike.

I think they need to look at the extent to which the excise tax will be increased because of the extraordinary period of inflation we have been living through over the last 12 months. This was not the kind of usual inflation that was normal in the Canadian economy prior to the pandemic. I do not believe this is what the government of the day foresaw. It is certainly not what Canadians foresaw when this automatic escalator was put in, and I think it is reasonable to recognize that the situation calls for a different course of action.

That is why I am pleased to rise in support of the motion, alongside my other New Democratic colleagues.

[The Deputy Speaker, Conservative, Chris d'Entremont]

The hon. member for Don Valley North is rising on a point of order.

Don Valley North

[Han Dong, Liberal, Don Valley North, ON]

Mr. Speaker, I have informed the Prime Minister and the leadership of the Liberal Party caucus that I will be sitting as an independent member at the conclusion of these remarks. Mr. Speaker, I am in your hands as to what happens next.

To all my colleagues in Parliament, media reports today quoted unverified, anonymous sources that have attacked my reputation and called into question my loyalty to Canada. Let me be clear: What has been reported is false and I will defend myself against these absolutely untrue claims. Let me assure members that, as a parliamentarian and as a person, I have never advocated, and I will never and would never advocate or support the violation of the basic human rights of any Canadian or of anyone, anywhere, period. The accusations are false.

My family came to Canada for freedom. I have had the privilege of being elected to the House, and believe I have served honourably. I pledge to continue to serve honourably and fulfill my oath of office. I will continue to serve the residents of Don Valley North as an independent member of the House.

I am taking this extraordinary step because to sit in the government caucus is a privilege, and my presence there may be seen by some as a conflict of duty and the wrong place to be as independent investigations pursue the facts of this matter. I will be sitting as an independent member so that the business of government and, indeed, the business of Parliament, is not interrupted as I work to clear my name and the truth is presented to Parliament and to the Canadian people. I am a proud Liberal and I am proud of the work our government does, day in and day out, to serve the people of Canada. I also do not want to distract from that important work.

Before concluding, I want to assure Mr. Michael Spavor and Mr. Michael Kovrig and their families that I did nothing to cause them any harm. Like everyone in the House, I worked hard and advocated for their interest, as a parliamentarian. The allegations made against me are as false as the ones made against them.

I will continue to work on my constituents' behalf as their member of Parliament.

I thank my staff. I know the days ahead will be difficult, but I will be there to support them as we continue to serve the people of Don Valley North.

I love my family, in particular my parents, who brought us here to Canada; my wife, Sophie; and my kids. I love them. I thank them for all the support and love they give me. The truth will protect us. Our honour and our family will get through this together.

[The Deputy Speaker, Conservative, Chris d'Entremont]

I thank the member for his statement. I assure him that the House will be making the appropriate changes to the seating plan.

We will take a quick breather here for a moment before we go back to questions and comments.

The House resumed consideration of the motion.

Opposition Motion—Tax Increase on Beer, Wine and Spirits

[Robert Gordon Kitchen, Conservative, Souris—Moose Mountain, SK]

Mr. Speaker, it is great to hear that the member for Elmwood—Transcona is going to support our opposition day motion.

It is interesting. We have heard from the government members, and their comeback is that this escalating tax is 1¢ on a beer. If it is 1¢ on a beer and they downplay that so much, why is it that we even bother putting the 1¢ on a beer? Why are we not giving Canadians that break?

The unfortunate part is that Canadians have lost trust in the current government. What we need to do is start building that trust back in Canadians. One of the first steps to do that is to show them they have cause.

I appreciate the member's comments and I wonder if he would like to speak further on that aspect.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I feel I would be remiss if I did not take a moment to acknowledge what has happened in the House with the member for Don Valley North. Obviously I am not in a position to speak to the veracity of the claims that have been made in the media, but I think this is an important reminder of the very real personal and professional impacts the debate we have been having on foreign interference in elections can have.

It is an example of why it is important that we have a public inquiry, so we can have a proper airing of the kinds of accusations being made in the media, in many cases now by anonymous sources, and so that folks in the Chinese-Canadian community know that those claims are being considered by someone who has access to the full evidence and has the power to clear names where names should be cleared. That is why it is important that we have nothing short of a public inquiry.

On the question that was posed, it is a good point that while it is a relatively small increase in some ways, that argument does not really pass muster because it is a big impact on the bottom lines of these smaller producers of beer, spirits and wines. At the end of the day, if it is not that big of an increase, which is what the government is saying, then it is not that big a loss for it to bypass it.

We know that other government revenue has grown a fair bit because of inflation. This is not the place to do it. If the government wants other revenue, we know there are companies, such as Loblaws, frankly, that can afford to pay more in tax. The government should be looking at them, not smaller producers of beer, spirits and wine, to raise revenue.

[Adam van Koeverden, Liberal, Parliamentary Secretary to the Minister of Health and to the Minister of Sport]

Mr. Speaker, I was eager to ask my colleague from Elmwood—Transcona a question about a balance on the taxation of products that lead to certain health outcomes.

I was also eager to stand to say it was kind of him to acknowledge the pain that our colleague is going through, but then the member politicized it a little, and I was pretty disappointed. I am a bit shaken because of what these types of debates do to people and families in this place. I think that is exactly why a non-partisan person should be the one to determine whether or not there is a public inquiry in this case. I hope we can let that stand and allow that person to do the work.

Going back to the excise tax on beer, it comes down to a balance on precisely how we tax these products to ensure that they are providing commensurate revenue for health care in this country. I am a big fan of the products that the member mentioned. I am a big fan of the two breweries and the winery in my riding. Where does that balance sit?