Alberta ordered to amend or repeal craft brewer grant program

A Government of Alberta program to help small craft brewers has been ruled non-compliant under the Agreement of Internal Trade — a setback to the province's much-touted program to diversify the economy.

Finance Minister Joe Ceci said Monday the province will review the decision and consult with stakeholders before deciding what to do. 

He said Alberta may take action against other provinces that put up barriers to make it difficult for Alberta producers to get into their liquor stores.

"Other provinces have benefited their own industry, their own craft brewing industry, to the detriment of ours," Ceci told reporters in Edmonton. "So I will be considering all my options in that regard." 

When asked if that included going to court, he replied, "That's correct."

In a decision released Monday, a three-person panel ruled the government must repeal or amend the Alberta Small Brewers Development Program (ASBD) within six months.

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"The ASBD program provides a direct incentive to produce beer in Alberta, thereby putting producers of beer from other provinces at a competitive disadvantage in the market for beer in Alberta," the decision states. 

"For these reasons, we uphold the determination of the panel that the ASBD Program is inconsistent with Article 403 of the AIT."

Under the program, small brewers can apply to receive monthly grant payments. Ceci says this helped 46 new craft breweries set up across the province since June 2016. 

The ruling was the result of a complaint lodged two years ago by Calgary beer importer Artisan Ales Consulting Ltd. 

Co-owner Bo Vitanov said she is vindicated by Monday's ruling and called on the government to honour it. 

"The trade agreement does allow for grants but it doesn't allow for this ongoing payment," she said. "If they try to tweak what they're doing then I think they will still be non-compliant." 

Company at disadvantage

The ruling released Monday upholds a July 2017 decision which found the Alberta government violated inter-provincial trade rules with graduated beer markups and a rebate program designed to help the province's small brewers.

In October 2015, the Alberta government introduced a lower markup for beers produced by smaller brewers in Alberta, Saskatchewan and British Columbia.

But the province rolled back the policy in August 2016, instituting a markup of $1.25 a litre for all beer. At the same time, it introduced a rebate for Alberta craft brewers, known as the Alberta Small Brewers Development program, to help the craft beer industry in the province.

Artisan Ales alleged both measures put the company at a disadvantage and caused a significant drop in sales.

Jason Kenney, leader of Alberta's Official Opposition United Conservative Party, said he would end the subsidies if he was premier. 

"Let's have free beer trade all across Canada,"  Kenney said. "No tariffs. No subsidies." 

But Neil Herbst, owner of Alley Kat Brewery in Edmonton and president of the Alberta Small Brewers' Association, said that would be detrimental to the industry. 

"Most of the breweries in Alberta would be gone," Herbst said.