Bo Vitanov of Artisan Ales led a legal fight against Alberta’s NDP after its 2015 beer tax hike—up to 166% on out-of-province brewers—crushed small producers like Steam Whistle Brewing, which won a $2.1M restitution judgment in 2016. The policy violated the Agreement on Internal Trade, forcing the NDP to reverse course but miss deadlines, while taxpayers footed legal bills. Now, with the UCP promising less red tape, the appeal hinges on payment alone, exposing the NDP’s election-year tactics and leaving Albertans with pricier craft beer as a legacy of regulatory overreach. [Automatically generated summary]
You're listening to a free audio-only recording of my show, The Gun Show.
My guest tonight is Bo Vitanov from Artisan Ales.
We're discussing an appeals court hearing that happened just yesterday afternoon.
The Alberta government is appealing a $2 million judgment levied against them issued to Steam Whistle Brewing after the company took the Alberta government to court over their unconstitutional changes to beer taxes.
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The Alberta government continues its attack on private industry.
Today, I'll tell you about how they are continuing to fight a court ruling that levied a $2 million fine against them.
I'm Sheila Gunn-Reed, and you're watching The Gunn Show.
Seems as though after four years of Rachel Notley's NDP being in power,
we can sum up their governing style as, if it ain't broke, then try to fix it anyway with more government and then ruin the entire system and then cost the beleaguered Alberta taxpayers millions of dollars just trying to hide your mistakes.
Yesterday afternoon, a three-member judicial panel heard arguments in an appeal of a Court of Queensbench ruling that determined the Alberta government had unconstitutionally applied beer taxes to out-of-province brewers.
Two out-of-province brewers said that the Alberta government had violated the Canadian Constitution by creating illegal interprovincial trade barriers when the Alberta government hiked the per-liter markup on out-of-province beers by up to 166%.
Now, that Court of Queensbench ruling from late last June levied $2 million in restitution to Great Western Brewing Company based in Saskatoon and Toronto's Steam Whistle Brewing.
Now to translate that for you, the Alberta government got greedy and did something illegal and unconstitutional.
And now the Alberta taxpayers are not only on the hook for the expenses involved in the continued fighting of these court cases, but also $2 million to out-of-province brewers because the NDP just didn't know what the heck they were doing at all.
My guest tonight will explain exactly how this all happened.
She's a small businesswoman who won a similar court battle with the Alberta government, but she won it at a trade tribunal over the exact same issue, the beer markup.
So joining me tonight in an interview we recorded late last night is Beau Vitinov from Calgary's Artisan Ales.
Joining me now from Calgary to discuss all the comings and goings from the appeals court panel today is Beau Vitinov from Artisan Ales.
Hey, Bo, thanks for joining me.
Thanks for having me, Sheila.
Hi.
Now, you've been on the show a lot, but just for some of our newer viewers, maybe could you give us a brief Kohl's notes version of your fight with the Alberta government and how that came to be and how after three or nearly four long years, you actually won your battle with the Alberta government for beer freedom?
Yeah, so as you say, it's been a long road.
In late 2015, the NDP government instituted a change in the way that they applied the beer markup or the liquor tax on beer, if you want to call it that.
Up until that time, small breweries or micro breweries were given a much lower markup than the big guys.
So the markup for the smallest breweries was 20 cents a liter and the markup for the big guys was $1.20.
And that's consistent with the way that it's done in other provinces in Canada.
And it didn't matter if the brewery was from Alberta, from another Canadian province, or another country.
It was based on the worldwide production of the brewery.
And so what happened in 2015 was the NDP changed that overnight.
Every brewery, regardless of its size, that was from outside the New West Partnership, which included Alberta, BC, and Saskatchewan, went up to $1.25 overnight.
And the micro breweries from within the New West Partnership got a big advantage because they were still given a graduated markup.
So as you can imagine, anyone like us who is representing breweries from outside the New West Partnership took a huge hit.
We knew it was going to devastate our business, which it did.
So we tried to figure out how we could get the government to change it.
Initially, we tried to just write to them, talk to the AGLC.
That went nowhere.
So we knew we couldn't afford to take them to court.
So we went a different direction.
We basically filed a grievance or a complaint through the Agreement on Internal Trade, which is a Canadian-wide free trade agreement.
We took the Alberta government to a tribunal panel.
The panel ruled in our favor.
We won.
The Alberta government appealed.
And in the meantime, they also changed the policy because they realized that they really were offside, that they were going to lose.
So they changed the policy where they jacked up that beer markup to $1.25 on everyone.
But what they were doing was through a different ministry and the government, they were rebating whatever the difference was back to the 10 cents a liter or 20 cents a liter, but only for the Alberta micros.
And so the trade panel basically ruled that you can't do in two steps what you can't do in one step.
And they basically smacked down the Alberta government's policy.
The government appealed.
We had the appeal tribunal kind of late spring last year and they lost again.
And they basically had six months to change the policy and they finally did.
And they basically reverted back to a policy very similar to the one that was in place before they started all this, all these shenanigans.
They did miss the deadline that they were given to make the changes.
But yeah, they've been completely routed and they've had to basically put the beer mark up back the way that it was three years ago, three and a half years ago.
And likely they spent millions of dollars in legal fees fighting a small business like you who, I mean, you guys really did what seems to be the impossible.
You basically caused the Alberta government to do a complete and total 180 and reverse everything.
And I remember you telling me somewhere along the way, the Alberta government actually wanted to hold you responsible for some of their legal fees, even as they appealed tribunal rulings that found them in the wrong.
Yeah, they've, I mean, like you say, they've had fairly expensive lawyers working on this on their behalf, which of course taxpayers are paying for.
And yeah, even after they lost that first tribunal and we went to the appeal, they basically their position was, hey, even if we lose this appeal, you should stick artisanals with part of this part of the costs from this appeal tribunal.
Fortunately, they didn't get their way.
Nonetheless, I mean, it did cost us money because it's not like court.
So winning does not get you.
They did have to pay some of our legal fees, but the costs of the tribunal wind up getting assessed out to the participants.
So, you know, for us, being a small business, this wasn't easy, though we did have great help from the Canadian Constitution Foundation, which is a non-profit organization that's basically interested in these sorts of constitutional issues.
They're the people who also backed Mr. Como in that big liquor como case that went to the Supreme Court last year, I believe it was.
So without them, we wouldn't have been able to fight this.
And I think that's kind of the issue with these sorts of situations.
It's like, sure, you have the opportunity to fight and complain with the government, but it costs money and they have deep pockets.
They have nothing but time and taxpayers' money to fight.
Now, can you tell us what exactly happened today at the appeals court panel?
Can you tell us how the Alberta government ended up before an appeals court panel with Steam Whistle?
So basically, when, as I mentioned, we couldn't afford to go to court with the government when we were unhappy with what happened with the beer markup.
But Steam Whistle could and did.
So I can't remember the timing, but basically shortly after they put the original policy change in place in late 2015, Steam Whistle filed for an injunction to basically keep the Alberta government from imposing this $1.25 beer markup on them.
And they were successful in getting the injunction granted.
And subsequently, when the government made its change where it excluded Saskatchewan, then Great Western also joined in into this.
And so last year, the government lost not just to us in these trade tribunals, but they lost to Steam Whistle.
And of course, as with us, they appealed that decision.
So they were in the hearing in the original court case, they were basically told that they would have to pay Steam Whistle.
I believe it's $2.1 million.
And so the appeal is really around the money because obviously, given their loss to us, they've changed the policy.
So in effect, it's been proven that their policy was wrong and was not constitutional and broke trade barriers, I mean, trade agreements.
But the appeal is really around whether the government has to pay this money to Steam Whistle and Great Western.
Yeah, from what I understand, it was $2.1 million in restitution.
And rest assured, the government has probably spent well over that dragging Steam Whistle back to court to appeal the findings of another court.
I mean, it's just outrageous that they are continuing to waste taxpayer dollars fighting small businesses and brewers in court because they couldn't have the foresight, the NDP, I mean, didn't have the foresight to see the chaos that their changes to a perfectly well-functioning liquor system would have across the entire system and then spills out into other provinces.
Government Wastes Taxpayer Dollars00:04:30
Yeah, I, you know, I certainly don't understand.
Well, I guess, like I say, if you if you don't personally have to pay the money, I guess there's no incentive to kind of stop fighting.
And, you know, I don't, I don't understand their motivations, particularly with respect to this, to this case, because they've lost, they've lost to us.
But, you know, maybe part of it is a function to just kind of make this drag out uh, until after the election, so they don't actually have to have a headline saying that they did lose and that they have to pay this money back.
So yeah, I i'm kind of baffled as to why this has kept going.
Yeah, and it's such a weird hill to die on it, just so strange.
I mean, who picked a fight with Brewers?
It just seems like such a crazy thing.
And in the middle of all of this um, Joe Cecey, the finance minister, and Darren Billis, a trade minister, they go and they pick a fight with Ontario because they say Ontario isn't allowing um Ontario, Alberta products into their marketplace.
But in the meantime they slept on this weird tax in the middle of nowhere.
So I, i'm a firm believer that the the case against Ontario was actually like a big distraction from having to admit that they lost to us in the tribunal.
That was completely timed to to basically, you know, distract from the, from the press asking them about, you know losing, losing in the tribunal.
So they were, they could say oh, we're still fighting for Alberta Brewers.
Look over there Ontario, big bad Ontario.
And you know, don't get me wrong.
Um, I I don't deny that there's issues with the LCBO, but if that was something that was so, if that was the issue, then that's what they should have addressed back in 2015 and not wait like three and a half years until they're told what they're doing is wrong.
To go and uh and pick on on another province.
Yeah, and I just saw a headline the other day that the government of Canada is now um, at least trying to eliminate federal barriers to alcohol trade.
Um, it seems like a strange thing from um Justin Trudeau's government to be in favor of free trade.
But you know, I i'll take it where I can get it.
I guess.
Yep yep, there's.
Um, there's definitely like some moves afoot to try and and make this a little simpler.
Yes, go ahead.
Sorry, go ahead.
No, I was just going to say um yeah, I mean, this is something I, I guess the conservatives, have been fighting for since well gosh, since they were in power and actually had the power to do something about it.
Um, so it is good to see the needle moving a little bit.
Um, I hate to give Justin Trudeau credit for anything, but if he he does this well, then good for him.
Yeah well, really good for all of us, because it should just be easier, right like?
We keep hearing that they're, I mean, they rework the Ait.
It became the Canadian um Free Trade Agreement and um so we're you're hoping that they would make things easier to do business across the country instead of making it more difficult, right?
Um, now the election's coming up um.
I know that the NDP have had um.
I mean, it's pretty clear they just don't believe in um the free exchange of goods and services between provinces, um based on their their tariffs and trade barriers.
UCP's Role in Beer Tax Red Tape00:05:10
Um, where where does the UCP stand on this beer tax stuff?
So I haven't really heard them speak about it specifically.
I did talk to the candidate, the UCP candidate in my riding, Jason Kopping.
And I do, my understanding is that they have a group or I don't, a team that's actually looking specifically at what they call red tape that's preventing businesses from working smoothly or efficiently.
So I definitely brought this beer issue up for their attention because one of the things that they've instituted is that even though they now have gone back to this graduated tax, which is for all breweries, again, from all over the world, they've kind of been sore losers.
And they're asking for an incredible amount of paperwork for a brewery to basically become eligible to get the reduced beer markup.
So if we're bringing in a really tiny, bringing in beer from a really tiny brewery from Belgium and the brewery isn't willing to provide all kinds of detailed information about their financials and the structure of the organization and their declaration of production,
which is actually the declaration is not such a big deal, but the financial statements and all kinds of private information about the company, if they're not willing to provide that, then they're back up to that $1.25 a liter markup anyway.
And we just, we don't believe that that's actually helpful.
So I really do hope that this group that the UCP is putting together, that this is one of the things that they look at and that they get back to simply asking for exercise information because that is the way that it works in the other provinces around the country.
It's just bizarre to me.
It's sort of like, you know, it's sort of like you apply for a job and they tell you that you need to be, let's say, you know, five foot six to be able to do the job.
And you're willing to send them a copy of your driver's license, which shows your height on it.
And they say, oh, no, no, that's not good enough.
We now need, you know, a blood sample and your DNA test results.
It's just bizarre.
It's really intrusive and it just seems like it's just designed to discourage breweries from getting the lower markup.
Yeah, it's creepy.
It feels really creepy.
It feels like, like you say, it's designed to be a deterrent because it is so darn intrusive.
There's no way that I, as a company, would give the Alberta government my financial statements just so that I could do business with Bo Vitinov from Artisan Ales.
I mean, it's just weird.
They don't need to know these things.
They need to know maybe production size, but I don't know why Joe Cece and Rachel Notley need to know about the like the financial statements of a Belgian beer company.
I don't understand it either.
It's, you know, I guess I could kind of see if they think that, oh, you're telling us you're really tiny, but you know, we're looking at your sales or your financial numbers and they're really huge.
But the problem with that is you can't compare, you know, some breweries are their brew pubs, so they're going to have a completely different sort of financial statement, financial results than a tiny micro brewery that's strictly a brewery.
So yeah, I certainly believe that it's just designed to, you know, to prevent breweries from getting the lower markup.
The AGLC constantly assures us that that's not the case, but that's, I think that's why it was put in place.
Thank You for Explaining It00:03:01
Now, Bo, when does the appeals court hearing go forward?
Like, what's the next continuation of the appeals court hearing with Steam Whistle?
When can we find or when are we getting close to a result?
That is a good question, and nobody knows the answer to that.
Basically, it's up now to the panel of judges to render a decision.
And my understanding is that there was no specific date given.
I think from what I've heard, it's usually at least a month or two, but I don't believe they were given a specific time frame of when a judgment will be rendered.
Isn't that convenient?
It feels like the government's ragging the puck on this.
Bo, how can people get information about your legal fight with the Alberta government or even just, you know, find out what Artisan Ales is up to?
Well, they can certainly go to our website and more importantly, our Facebook page.
So our website is artisan-ales.com.
And we've definitely kind of had the story of all of this on our Facebook page.
Yes, I think that's been the best place to get information about what you, I mean, really, you guys were put through the ringer by the Alberta government just to beat them.
And then the government just kept coming back and you beat them again.
And you've really persevered.
And I think you've shown everybody that David really can beat Goliath in this instance.
Bo, I want to thank you for coming on the show.
Thank you for explaining such a complicated issue with such clarity because it is a lot of moving parts and a lot of things to understand.
And I just want to thank you for explaining it in a way that like a lay person, just like a beer drinker can understand.
Well, you know, we appreciate that your interest in this.
We appreciate that you've given us an opportunity to kind of let people know what's happened in the beer market in Alberta.
And I think the most important thing to remember now is that because of what's happened, we have far more affordable, good craft beer for Albertans to drink.
You know, cheers to that, Bo.
Thanks for fighting for cheaper beer and freedom for everybody.
Hopeful Liberation00:01:09
I want to thank you for coming on the show, and hopefully, we'll touch base again when that appeals court hearing comes, the ruling comes down.
Yeah, let's do that.
Thanks for having me.
Thanks, Bo.
I think Bo is right.
I think it really is that simple.
I think the NDP are continuing to fight steam whistle and Great Western Brewing in court because the NDP will spare no expense to avoid the bad optics of being responsible for Alberta taxpayers being on the hook for the NDP's mistakes as we head into an election.
Like so much the NDP has done in and to this province over the last four years, it will be up to the next government to fix the mess and undo all the mistakes and damage.
Well, everybody, that's the show for tonight.
I'll see everybody back here in the same time, in the same place next weekend.
Hopefully, hopefully, by then, we will be liberated from our NDP oppressors.