Liquor Tax In Canada By Province (2023)

If you grew up in Canada, then you’re probably used to the hefty liquor taxes imposed by most provinces.

In some areas, such as Nunavut, it’s not uncommon for a bottle of vodka to go for well over $100 (and that’s not top-shelf vodka, either). So how much is the liquor tax in Canada?

Although the federal government doesn’t charge separate liquor taxes, most Canadian provinces and territories have implemented liquor taxes between 5% and 61.5%.

Before you visit the liquor store or go out for a night of drinking at the bar, it’s a good idea to know what type of taxes to expect. Below, I’ll explain everything you need to know about the liquor tax in Canada and how it differs by province.

What Are Liquor Taxes?

In 1996, the federal government passed the Liquor Tax Act. This act required all Canadian provinces to impose a base liquor tax on retail alcohol sales. Liquor tax is not paid by manufacturers or distributors.

Rather, it’s paid by consumers whenever they purchase liquor from a liquor store or when they purchase liquor from a bar or club.

In addition to taxing straight liquor, liquor “coolers” (such as a canned vodka-soda mix) are also subject to liquor tax, similar to a liquor-based cocktail purchased from a bar.

The Three Types Of Liquor Taxes In Canada

Canada’s Liquor Tax Act meant that all provinces in Canada would have to impose at least some type of additional liquor tax or sales restriction on retail liquor sales. However, the act allowed provinces to decide the amount to be taxed and, more importantly, how the liquor would be taxed.

Some regions, such as the Northwest Territories, don’t have a set tax rate. However, liquor sellers must adhere to strict guidelines when selling liquor, such as setting daily spending limits or only selling certain-sized bottles.

Depending on the province, there are three different ways that liquor (and all alcohol, for that matter) can be taxed in Canada, including:

  • Tax percentage rate
  • Volumetric liquor tax
  • Flat-rate liquor tax

1. Tax Rate Percentage Liquor Tax

A tax rate percentage is, by far, the most common type of liquor tax in Canada, as it’s the simplest to calculate.

Provinces like New Brunswick, PEI, BC, and Saskatchewan have all implemented a base tax rate that’s charged as a percentage, no matter what type of liquor or liquor-based beverage is being purchased.

2. Volumetric Liquor Tax

Volumetric liquor tax is a lot more complicated for consumers and retailers to calculate. However, some provinces like Ontario and Quebec have implemented it.

As you might be able to tell from the name, a volumetric liquor tax applies separate tax rates depending on the volume of alcohol being purchased. Ontario charges both a standard liquor tax rate and a volumetric tax rate.

3. Flat-Rate Liquor Tax

Most provinces don’t charge a flat-rate liquor tax. However, this tax is when customers are charged a single flat rate for their purchase. For example, Ontario charges an additional 8.93 cents for non-refillable alcoholic containers (which is most alcoholic containers).

Provincial Liquor Taxes In Canada

Now that you understand the different types of liquor taxes in Canada, let’s take a quick look at the liquor taxes in Canada by province:

Province/TerritoryLiquor Taxes
Alberta$18.33 markup tax per litre (greater than 60% ABV) $13.76 markup tax per litre (between 22% and 60% ABV)
British Columbia10% tax rate on all liquor sales
ManitobaFlat-rate markup between $1.16 and $60.37, depending on volume
New Brunswick5% tax rate on all liquor sales
Ontario61.5% tax rate on liquor sales 38-cent flat-rate markup on liquor sales (per litre)
Prince Edward Island25% tax rate on liquor sales
QuebecFlat-rate markup of 72 cents per litre of liquor
Saskatchewan10% tax rate on all liquor sales
Yukon12% tax rate on liquor sales

Why Does Canada Charge Liquor Tax?

Compared to other countries, Canada has some of the highest liquor taxes in the world. Needless to say, many Canadians aren’t happy about this, especially when you consider that some cities (like Vancouver, for instance) are continuing to increase alcohol taxes.

So, why does Canada charge a liquor tax in the first place?

The official justification for high liquor taxes in Canada is to “reduce liquor consumption.” However, many Canadians have referred to Canada’s exorbitant liquor taxes as a blatant tax grab that’s designed to exploit alcohol addicts.

I’ll leave it up to you to decide which. However, the evidence does suggest that higher liquor taxes have significantly reduced liquor consumption. For example, the 10% liquor tax increase in Saskatchewan resulted in 8.4% fewer alcohol sales in the province.

At the end of the day, alcohol is an addictive drug that can cause lots of harm when over-consumed and abused. Chronic alcohol abusers are at far higher risk of heart attacks, stroke, and cancer.

Given that Canada’s universal healthcare program covers the majority of medical costs and hospital visits, alcohol abuse represents a financial strain on the healthcare system.

The idea behind the liquor tax is to discourage the abuse of concentrated liquor by implementing high liquor taxes.

What Makes Liquor Tax In Canada Different From Alcohol Tax?

While liquor prices remain historically high in Canada, the tax rates on less concentrated alcoholic beverages like beer, wine, and malt beverages have intentionally been kept lower. This incentivizes more responsible, healthy consumption of alcohol.

Do You Have To Pay Shipping Duties On Imported Alcohol?

If you’re importing liquor into Canada from across the border, then you’ll also have to pay an additional excise shipping duty fee. The following fees apply:

  • Spirits with less than 7% ABV: 33 cents per litre
  • Spirits with more than 7% ABV: $13.04 dollars per litre

Which Province Has The Highest Liquor Tax In Canada?

Of all the provinces in Canada, Ontario has the highest liquor tax rates. In addition to flat-rate fees, Ontario imposes a 61.5% retail sales tax on all liquor purchases.

Conclusion – Will Liquor Taxes In Canada Increase?

Liquor Tax In Canada

Liquor taxes have become a standard part of everyday life for most Canadians. There are no signs that indicate a future decrease in taxes either. If anything, more provinces are beginning to increase their liquor taxes to keep up with growing inflation.

From a financial perspective, alcohol can be a real drain on your money, and every dollar spent on exorbitantly-taxed liquor is a dollar that you could have invested toward your financial freedom. To learn more about investing, be sure to check out my beginners’ guide to investing in Canada next!

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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