HST holiday little to cheer about for Nova Scotia distillers

Distillers in Nova Scotia Upset Over Federal Government’s HST Holiday

Several distillers in Nova Scotia are expressing frustration and confusion over the federal government’s two-month HST holiday, which excludes spirits sold in bottles. Graham Collins, president of Compass Distilling in Halifax, believes the decision to make some alcoholic drinks tax-free while others are not is nonsensical.

Collins stated, “It’s very bizarre. It’s inexplicable. Why is it that you can buy a bottle of beer or wine without paying HST, but spirits are still subject to the tax?”

A federal finance department official defended the tax break, stating it provides temporary relief on select goods considered holiday essentials. However, Collins argues that the confusion is amplified by the fact that his distillery also operates a bar selling mixed drinks in the same space as bottled spirits.

He added, “Here it’s a double whammy because it even applies to cocktails. If we sell a glass of wine, there’s no HST, but a cocktail with spirits incurs the tax.”

While Compass Distilling benefits from the HST cut on mixed drinks with less than seven percent alcohol content, Collins worries that consumers will opt for tax-exempt beverages over spirits during a peak sales period.

Riley Giffen, president of Coldstream Clear, shares these concerns. His company sells canned alcoholic drinks that qualify for tax savings, but he anticipates a potential sales drop once the tax holiday ends.

Giffen emphasized, “This is a significant purchasing season for spirits. It’s the busiest time of year, followed by the slowest.”

As president of the Craft Distillers Association of Nova Scotia, Giffen revealed that the group has raised objections to the government regarding the tax exemption rules, but no resolution has been reached.