Ontario Hikes Taxes On Cigarettes, Raises Minimum Price For Wine In 2016 Budget

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TORONTO — The Ontario government tackled a number of key vices in its 2016 budget, making it costlier to smoke and consume certain types of alcohol in the province, although a section of the gambling industry was given a small boost. Here are the key details:

SMOKING

Smokers in Ontario need to brace themselves for higher prices as the province's tobacco tax is hiked.

Starting Friday, the Liberal government is increasing the tobacco tax rate by $3 per carton of 200 cigarettes. That's an increase from 13.98 cents to 15.48 cents per cigarette and per gram of tobacco products other than cigars.

Tobacco tax rates will further increase based on inflation over the next five years, beginning in 2017. The province says the increases will support smoking cessation efforts while working towards Ontario's goal of having the lowest smoking rate in Canada.

kathleen wynne charles sousa

Ontario Premier Kathleen Wynne, left, and Finance Minister Charles Sousa ahead of the tabling of the budget, Queen's Park, Feb. 25, 2016. (Canadian Press photo)

For instance, a portion of revenues will be used to support a $5-million investment to improve access to smoking cessation services for "priority" populations. The tobacco tax increases are also expected to help combat the contraband tobacco market.

Tobacco retail inspections are being enhanced with pilot projects starting in April at four public health units that will focus on seizing contraband tobacco and flavoured tobacco products.

Ontario is further proposing legislative amendments that would allow for the forfeiture of raw leaf tobacco — a measure also aimed at deterring contraband tobacco distribution.

DRINKING

It will become costlier to enjoy certain types of alcohol in the province, with wine lovers particularly likely to feel the pinch.

The government will establish a minimum $7.95 retail price for table wine per 750 ml bottle by 2019. The increase will be phased in over three years.

The province says the measure is being taken to make the price of wine consistent with spirits and beer.

The minimum cost of cider, fortified-wine and low alcohol wine will also increase over the next three years at yet-to-be-announced rates.

Moreover, the Liquor Control Board of Ontario will increase the markup for wine products by two percentage points starting in June, another two percentage points in April 2017 and a further one percentage point in April 2019.

The basic tax on non-Ontario wine bought at winery retail stores is going up by one percentage point in June, and will rise by one percentage point further in April of 2017, 2018 and 2019.

The government is also planning legislation that will establish higher basic wine tax rates for sales at winery retail outlets that operate inside grocery stores, and will bring in legislation that taxes spirits purchases at on-site distillery retail stores.

Despite the higher prices, it's getting easier for Ontario residents to purchase certain alcohol, as up to 70 grocery stores will be authorized to sell wine and beer together by the fall, with that number expected to rise. Cider will also be sold at grocery stores.

Net income from the LCBO is estimated to be $58 million higher than what was projected in the last budget, largely due to strong sales last summer that were pumped up by good weather, strong tourism and sporting events, such as the Toronto Blue Jays' high intensity performance last year.

Earlier on HuffPost:


GAMBLING

The horse racing industry was given a boost as a provincial transfer payment program — formerly known as the Horse Racing partnership — was extended for two years to March 2021 while the Ontario Lottery and Gaming Corporation works to integrate horse racing into its gaming strategy.

The province says the program extension will encourage investments and business decisions while also contributing to the support of rural jobs and economic development in the agricultural sector, especially the horse breeding sector.

The government says it intends for the OLG to establish a future longer-term funding arrangement with the horse racing industry which would be subject to government approvals.

Net income from the OLG is estimated to be $159 million higher than projected in last year's budget, with higher-than-projected sales in national lotteries cited for the boost.

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