The provincial government is compelling Quebec residents to pay up on their bad habits through an increase of taxes on alcohol and cigarettes proposed in the new budget.
The Parti Québécois expects to generate $536 million over three years to help clear up the province’s debt. The budget proposed an 18 per cent increase on tobacco products and raise in 25 per cent on alcohol.
The goal of the tax being to rake in more money on items that are not considered essential but that people consume on a regular basis; its revenue will be key in reducing Quebec’s debt which Premier Pauline Marois hopes to erase within the end of the next fiscal year.
Although the tax was only announced last Tuesday, it will be applied retroactively. Restaurants and bars are expected to tally and pay the difference between what they have already paid in taxes on unopened alcohol and what the new increase would cost.
According to Paul Quinn, the owner of Montreal bar Irish Embassy, the tariffs are hitting at a tough time. Quinn emphasized that having to go through the inventory when bars are preparing for the holiday rush seems counterproductive.
“What harms us the most is that the tax is retroactive. It takes time before we can change the menus and all the prices so in the end, we’re losing money,” said Quinn. “They’re actually harming themselves in the long run. With the hockey lockout, there isn’t a lot of tourism and higher prices aren’t going to bring more people.”
Conversely, Tommy Nguyen, the manager at local bar La Station des Sports, isn’t worried.
“People will never be discouraged from buying alcohol or cigarettes,” said Nguyen.
Restaurants boasting wine cellars will lose the most due to the number of unopened bottles. The amount they will have to pay is significantly higher than bars where alcohol sells quickly and there is no storage of wines or spirits.
According to Finance Minister Nicolas Marceau, the last time Quebec saw a tax increase on alcohol was 15 years ago and on cigarettes, nine years ago in 2003.
For restaurants, beer will cost 82 cents per litre instead of 65 cents and will increase by $1.35 for other alcoholic beverages. For the folks at home, the tax on beer is up to 50 cents from 40 cents. The tax will add $1.12 per litre to the purchase of other alcoholic beverages, up from 89 cents per litre. As for cigarettes, the taxes are now worth 12.9 cents per cigarette from 10.9 cents.