Saskatchewan Imposes 50% Retaliatory Tax on US Alcohol as Trade War Continues

Saskatchewan Premier Scott Moe speaks with reporters at Canada’s High Commission on March 2 in New Delhi, India. (Photo: Adrian Wyld/The Canadian Press via AP)

Saskatchewan’s 50% retaliatory levy on American alcohol takes effect Tuesday, raising the cost of U.S.-produced beer, wine and spirits ordered by retailers in the province, according to the Globe and Mail.

The levy applies to U.S.-origin alcohol imported into Saskatchewan and is being administered through the Saskatchewan Liquor and Gaming Authority’s online ordering system, which retailers use to purchase products. Any U.S.-produced alcohol ordered through the system beginning Tuesday is subject to the 50% levy.

The province announced the measure Aug. 27 in response to a 50% U.S. tariff on Canadian alcohol that took effect Aug. 22. Saskatchewan said the levy is intended to reciprocate the U.S. measure while continuing to leave American alcohol available to consumers.

Unlike several other Canadian provinces, Saskatchewan has not banned American alcohol from store shelves.

Premier Scott Moe previously said the province would keep U.S. products available because consumers should be able to make their own purchasing decisions. He also said sales of American alcohol in Saskatchewan had already fallen about 40%.

Several Saskatchewan brewers and distillers have supported the approach.

In a Sept. 1 statement from the provincial government, local producers said the levy could encourage consumers to choose Saskatchewan-made beer and spirits while allowing shoppers to make the final decision.

The government has also emphasized that it wants the broader Canada-U.S. trade dispute resolved. Deputy Premier and Finance Minister Jim Reiter said the province’s objective is to return to tariff-free trade rather than prolong the dispute.

Saskatchewan is one of two Canadian provinces where American alcohol has remained available rather than being broadly removed from retail shelves. Alberta has not announced a matching 50% levy.

Saskatchewan’s move therefore creates a different approach to U.S. alcohol within Canada’s provincial liquor systems: American products remain available in Saskatchewan, but retailers will now face a significant additional charge when ordering them.

The levy is scheduled to remain part of Saskatchewan’s response to the trade dispute as the province and federal government continue to call for a negotiated resolution and the removal of tariffs and other trade barriers.