Steam Whistle granted injunction against Alberta tax increase

Canadian craft brewers won't have to shell outextra cash to sell their beer in Alberta for now.

Steam WhistleBrewing has been granted acourt injunction this week suspendingthe increased tax on craft beer produced in provinces outside Alberta, British Columbia and Saskatchewan.

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The province announced the "New West Partnership" tax plan last October, adding a 260 per cent tax increase on smallbeer producers fromelsewhere in Canadaa jump from $0.48 per litre to $1.25 per litre.

"This whole idea of aggressivetax to injure the businesses of craft brewers from within our own country but are entering Alberta to us makes no sense," saidGregTaylor, co-founder of Steam Whistle Brewing.

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The Ontario-based brewer says it took on the legal challengeon behalf of other craft brewers excluded from the New West Partnership. Their lawyerarguedthe tax provided a barrier to interprovincial trade.

"It was specifically a tax to stop craft brewers from outside the province of Alberta from prospering within Alberta," said Taylor.

Finance MinisterJoe Cecihas told CBC newsthe tax increase was brought in to helpgrow thebrewery business in Alberta,create jobs anddiversify the economy.

"I think that's probably what the spirit of the province's move was, to try to level the playing field," saidNeilHerbstfrom the Small Brewers Association of Alberta.

While Herbst hasn't seen a direct increase in sales of Alberta craftbeer, he's seen more small breweries popping up.

He says Alberta hasan open-listing system where the province does not determine who can sell beer. Yet, Ontario and Quebeccan decide which beers are sold in the province under a restricted listing system.

But Taylorsays Alberta's new law istoo harsh, and will consider taking Steam Whistle off Alberta shelves if the new tax is adopted permanently.

"It's tough growing a craft beer in Canada, there's a lot of barriers, but gosh, to facethese punitive measures that are brought in by governments, it's very tough."

There will be a hearing on the taxon July 21.