I Am un-Canadian: My new 'rant' as beer goes flat, taxes rise

Canada may well need a new “Rant.”

Remember the old one, the Molson “I Am Canadian” campaign and what became known as “The Rant” by actor Jeff Douglas as Joe Canada?

Clearly, times are changing.

First, the Ontario government decided to slap a new tax on beer.

Now, Statistics Canada reports that beer continues to lose market share as we become less hoser and more wine snob.

According to the federal agency this week, beer’s share of the alcohol market slipped to 42 per cent in the year ending March 31, 2014, down from 49 per cent almost a decade earlier.

Wine’s market share, in turn, rose to 31 per cent from 25 per cent in the same period.

While the numbers are more than a year old, the trend hasn’t likely changed given that the market share for beer has been eroding for years.

Don’t take that to mean we’re still not drinking it.

Beer remains the biggest seller, at $8.7-billion in sales in the 2013-2014 period.

But consider this: Total sales of alcoholic beverages rose 1.1 per cent in that period. Beer sales were flat – yes, I did that on purpose – while wine sales rose 2.3 per cent, spirits 0.5 per cent, and ciders, coolers and the like 9.5 per cent.

The longer-term numbers also tell a tale: Beer sales, by volume, has climbed at an average annual pace of just 0.3 per cent over a 10-year period, trailing wine’s 3.9 per cent.

What governments take from excise, sales and alcohol taxes, along with the money from licences and permits, was $10.5-billion in the 2013-2014 fiscal year.

Ontario Premier Kathleen Wynne recently unveiled plans to allow beer sales in some supermarkets, along with a new tax, calling it “a great day for people who like their beer cold.”

The Beer Store won’t pass on the cost to consumers for a couple of years. But if the consumer bears the full brunt, it will be about $1 extra for every case of 24.

My new “Rant" might be: This is downright un-Canadian.

The oil patch may be waking up to an NDP government this morning, but hey, at least oil is at a fresh high for the year.

(For readers outside Canada, the New Democratic Party is on the left side of things.)

Oil is rallying after yesterday’s report from the American Petroleum Institution that showed crude stocks falling.

But as Groucho Marx might have put it, when royalties go out the door, higher prices come innuendo.

As The Globe and Mail’s Jeffrey Jones reports, Rachel Notley’s NDP has pledged to review the system of royalties, hike corporate taxes and beef up environmental regulations.

“A new government means a new vision for the province, including incremental program spending, a more progressive personal income tax system and higher corporate taxes relative to the outgoing government’s plan,” National Bank economist Warren Lovely said today.

“Notwithstanding the province’s strong balance sheet and noted fiscal flexibility, the prospect of extra red ink on the bottom line and a slower return to balance has contributed to some underperformance in Alberta’s credit spreads,” he added in a research note.

“And although a recent recovery in oil prices hints at some potential revenue upside for the province, a proposed royalty review could add some near-term uncertainty to an oil and gas sector still under pressure.”

As Mr. Lovely noted, there are so many issues to settle now, starting with a commission to study the royalty structure.

“Elsewhere on energy, the NDP have indicated they would not actively push development of two high-profile oil pipelines: Keystone XL and Northern Gateway,” he said.

“The NDP takes a more favourable view of the Energy East pipeline, which would move Alberta oil to Quebec/New Brunswick. The NDP would aim to phase out coal-fired electricity generation and would also nix carbon capture/storage projects, reprofiling the existing capital spending envelope towards the priority areas of transit, health and education.”

It’s another big day on the corporate earnings front, both in Canada and elsewhere.

And watch after markets close for Tesla’s report.

“The company has recently expanded its horizons into solar-powered batteries for homes and businesses but the direction of shares in the days to come will be dependent on the outlook for its core electric cars business,” said analyst Jasper Lawler of CMC Markets.

“The company is expected to make a loss but shares can still push higher if the company maintains or expands its guidance on vehicle sales this year,” he added.

“There is considerable excitement over Tesla’s new ‘SUV crossover’ Model X. Its production can’t be delayed because it is factored into the annual sales target.”

"Price action around last week’s GDP disappointment was a howl of disapproval, something akin to the The Scream by Edvard Munch."

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Goldman Sachs