Thank you, Mr. Speaker. My questions are for the Minister of Finance regarding the liquor pricing review that is currently being undertaken. My question is: as part of that review, will the Minister increase the small brewery discount, thus lowering the cost of beer taxed that is produced in the Northwest Territories? Thank you, Mr. Speaker.
Thank you, Member for Yellowknife North. Minister of Finance.
Thank you, Mr. Speaker. The pricing review is not done yet. It is on track and on time, and it should be back by March. Once we have the information back, available to us, we will be able to make some decisions. Right now, beer manufacturing, of which there is exactly one individual, is receiving a fairly significant discount in terms of the typical markup that would normally be seen. Where they are at right now is worked on fairly significantly between that producer and the department, so I am confident, Mr. Speaker, that, when that review information comes back, we will again work with our local producers or local producer and figure out an appropriate way forward. Thank you, Mr. Speaker.
The Minister's answer gets to my next point directly. I believe we are presently where the Yukon was about 20 years ago, where they had one brewery, and now they have multiple in multiple communities. They have opened a distillery. There is an industry growing with people working, northern labour. There are jobs existing. I hope one day I can stand in this House and another MLA can ask questions about local manufacturing of wine, beer, and spirits in this territory. My question for the Minister is: is there work being done to assess the barriers for expanding the manufacturing in this industry? I know right now that both the federal Excise Act applies as well as a number of different departments across the GNWT, and there is an extremely high capital barrier to anyone wishing to produce locally made alcohol in the territory. Has the department conducted a review of the barriers that people face in wanting to get into this industry?
This is one time when I want to give a simple answer and say no, but that is not a simple answer. I think it's really more as the Minister of ITI, in some ways, that I think I would be answering this question, which is really around barriers that small businesses, small- and medium-sized businesses, might have in order to open their businesses, become entrepreneurs, or innovate existing businesses. That is the kind of work that gets done regularly.
A couple of examples I would give right now: firstly, with respect to liquor specifically and the Liquor Act, to the extent that there may be some barriers within that, if there are, if that is the perspective of the industry, that review is about the get underway very shortly, looking at ways of streamlining and modernizing that act. The second one, Mr. Speaker, is the red tape review. There is a red tape review undergoing work right now, and I would strongly urge anyone who says that there is a barrier to this industry to respond in to that effort so that they are well aware of, in fact, what barriers there are so we can reduce them.
The reality is that anyone who is looking to brew beer in the NWT is never going to do it with local northern labour and get to a price point anything comparable to the large producers in the South. There are simply too many input costs to be competitive. When we look at the generous discount, as the Minister frames it, the price per litre that we are taxing beer at that is locally produced in the Northwest Territories is still not comparable to Ontario's microbrewery rate, for example. We are taxing them at a higher rate so that that beer will never be competitive with the Molson Canadians of the world, an example, who I might point out are currently locking out their union.
I think one of the ways to fix this would be to allow locally produced beer to directly sell to restaurants. Right now, if you produce beer, you have to sell it to the liquor commission and then buy it back with those taxes. If you want to sell beer in a tasting room, you have to sell it first and then buy it back more expensively, at a price per litre that just is not competitive and really never will be, given the cost of labour and doing work in the North. My question to the Minister is: as part of this pricing review, can we allow locally produced beer to directly sell to restaurants without going to the liquor commission to be sold first?
I think, actually, that is a regulatory question, and that then falls back to the Liquor Act review that is underway. The good news is that there is much work happening and many opportunities to affect change that will make things hopefully better. It has to be done in a methodical way and in a process-oriented way. One thing I have discovered in this role is that liquor brings out a myriad of different opinions about whether it should be controlled or whether it should be more open and whether there should be more production or whether there should be less production. It has to be methodical. We have to go out to the community. The Liquor Act review is going to do that, and it's going to ask some of those questions. Do we need to change the way people can buy liquor, sell liquor? Those are exactly some of the questions we will be asking in the course of that.
