Wine sellers toast Alberta’s removal of tax based on value of bottle

Wine sellers and hospitality representatives in Alberta are saying cheers after the provincial government announced it will scrap a tax on wine that had proved highly unpopular with the industry. 

Al Drinkle, co-owner of Calgary’s Metrovino Fine Wines, said he was “absolutely elated” by the news.

The province announced in its latest budget, tabled Feb. 26, that it is ending the ad valorem tax on wine introduced in last year’s budget. 

Minister of Service Alberta and Red Tape Reduction Dale Nally said the tax was something the government experimented with, but he recognized "it didn't land very well with Albertans."

Now, the province is going back to a standard tax based on volume. It will kick in April 1, and it is going up by 58 cents per litre. The government says that will put the markup on the average 750 ml bottle at $3.52.

The ad valorem tax, on the other hand, had a flat tax on a bottle of wine, with an additional tax that escalated depending on the wine's value — the more expensive the bottle, the more a customer had to cough up. 

That made some people think twice about which wine they chose, said Juanita Roos, who owns Color De Vino Wine & Spirits in Edmonton and sits on the board of the Alberta Liquor Store Association. 

Ernie Tsu, president of the Alberta Hospitality Association, says diners should not expect to see changes on menus or on their receipts right away. 

He said restaurant owners will be looking at wholesale prices to determine what wines they buy. But he said ultimately, the end of the tax will be good news for customers.

The tax did not bring in the revenue the province thought it would.

It was estimated to generate about $22 million to $23 million annually. It ended up bringing in about $10 million in the 2025-2026 fiscal year. 

"That shows that category of wine was operating at a less than 50 per cent success rate compared to the previous year," said Drinkle. "The wine that was being taxed is of a pretty niche category, and it was being taxed so aggressively, the category was more or less suffocating."

Nally said the tax only affected about 16 per cent of wines sold in the province.

"So it actually didn't impact a lot of wines, but there was certainly a lot of Albertans that didn't like it nonetheless. And so we listened to Albertans," Nally said.