06/22/2017 10:55 EDT | Updated 06/22/2017 13:23 EDT

Breweries make case that Alberta beer tax system unconstitutional

CALGARY — Lawyers for two breweries are in a Calgary court today arguing that the Alberta tax system on small breweries is unconstitutional.

Toronto-based Steam Whistle Brewing and Saskatoon-based Great Western Brewing Co. are together pressing the case that Alberta's system unfairly favours producers in the province.

They say that the system, which charges all small breweries $1.25 per litre sold but returns much of that to Alberta producers in the form of a grant, effectively provides an unconstitutional trade barrier.

The system replaced an earlier tax regime that gave western Canadian brewers a more direct tax advantage over those in the rest of Canada, which Steam Whistle had also challenged.

Great Western CEO Michael Micovcin said the changed tax system adds $7 per 24-case of beer that they have to pass on to consumers since they don't get the grant, which makes their product uncompetitive.   

The defendants, which include the Alberta government and the Alberta Gaming and Liquor Commission, have yet to present their case.