OTTAWA — The federal government is set to extend its cap on an annual alcohol tax increase for another two years in a bid to rein in costs facing Canada’s brewers, wineries and distilleries.

Excise taxes on booze had faced annual increases pegged to inflation on April 1 each year, but the Liberal government has temporarily capped those hikes at two per cent since 2023.

This was supposed to be final year for that cap, but a government official who was not authorized to speak about the announcement before it’s made public told The Canadian Press that Ottawa is set to renew the cap through to 2028.

The federal government is also giving a two-year extension to an agreement meant to support craft brewers that cut excise taxes in half for the first 15,000 hectolitres of beer brewed in Canada.

The official says the extensions aim to give predictability to Canadian brewers, wineries and distilleries in the midst of global trade and supply chain disruptions and ahead of what could be a busy drinking season with the FIFA World Cup coming to Canada this summer.

The federal Conservative party and the Canadian Taxpayers Federation have both been calling on the Liberals to scrap the planned tax hike on alcohol completely ahead of the April 1 deadline.

This report by The Canadian Press was first published March 31, 2026.

Craig Lord, The Canadian Press