Finance committee  This tax mechanism has been in place since 2017. I think 2023 is the perfect example of why we have opposed this since 2017. These annual increases are determined using an inflation indexing formula. As inflation rises, the size of each annual increase goes up. As I noted in my opening remarks, this year's increase was triple the previous five-year average.

Finance committee  It does, yes. I think one thing that differentiates beer from other beverage alcohol categories, like wine and spirits, is that it is heavy, bulky and quite expensive to ship across the country. The price of beer is certainly influenced by the price of fuel.

Finance committee  Yes. First off, thanks for your advocacy on this issue, Mr. Sorbara, and raising it within the Liberal caucus. It did not go unnoticed. We appreciate that. Despite some of the media commentary over the past couple of years, the Canadian brewing industry is not growing. It's not flat.

Finance committee  Mr. Chair and honourable members, thank you for the invitation to appear this morning as part of the committee's study of the subject matter of Bill C-47. My name is Luke Chapman. I'm the vice-president of federal affairs for Beer Canada, the only inclusive national trade association for Canadian beer companies.

Industry committee  Before the pandemic, the small to medium-sized brewing category was growing. One thing that's unique about that segment of the market is that those companies rely much more significantly on sales through their on-site taprooms. Obviously, when COVID-19 hit, there were restrictions in place for consumers to go and enjoy a pint of draft beer.

Industry committee  That is exactly it.

Industry committee  It is, absolutely. I think that's a big reason that we did see growth in non-alchoholic beer sales over the last two years. Small brewers are becoming more interested in that space, and I think it's being driven by consumers looking to lead healthier lifestyles and to look at experimenting with more non-alcoholic products.

Industry committee  Absolutely. As I alluded to earlier in this session, brewers are already dealing with historically high input costs. The number of dollars it costs to produce beer in Canada has risen quite substantially over the last two years. Our message to the government is that brewers are not opposed to paying their fair share of taxes.

Industry committee  Thank you very much for the question. Beer Canada did have the opportunity to meet with Mr. Cannings to talk about the excise treatment of non-alcoholic beer. In Canada, it's an obscure situation that kind of caught us by surprise. Beer, compared to wine and spirits, does pay excise, while those other categories are exempted from any excise at all.

Industry committee  Absolutely. We at Beer Canada, and our member companies, are fully supportive of the elimination of barriers that make it difficult to move our products from province to province. I think beer is unique in many ways, and it's also unique in its physical characteristics. When you compare it to both wine and spirits, beer is a much bulkier, heavier product, so it is more costly to ship between provinces.

Industry committee  It's certainly a challenge, as I noted in my remarks. In early 2022, beer prices have already increased by 5% compared to the same period in 2021. It's certainly a combination of things. We're dealing with historically high malt barley prices and historically high aluminum can prices.

Industry committee  Thank you very much. Mr. Chairman, honourable members, thank you for the invitation to appear this afternoon as part of the committee's study on the labour shortages and productivity of Canadian small and medium-sized enterprises. My name is Luke Chapman, and I am VP of federal affairs for Beer Canada, a national trade association comprising 48 member brewing companies that account for 90% of the beer produced in this country.