Whether you’re sipping gin on the dock, cracking open a craft brew at a backyard BBQ or stocking up on coolers for the long weekend, Ontario has something to cheers to on August 1 that could give both your wallet — and the provincial economy — a boost.
How did we get here? A budget move to modernize booze pricing
This change traces back to Ontario’s 2025 provincial budget, where the government committed to overhauling the complex system of alcohol taxes and markups. It followed a year-long review launched in 2024 to find ways to modernize, simplify and make pricing fairer for both consumers and local producers.
Finance Minister Peter Bethlenfalvy told the Canadian Press the goal was to “level the playing field” and give Ontario’s craft distillers and brewers a real shot against big global brands. After years of local industry pressure, the province is finally pulling some major levers to bring costs down and boost competitiveness, just in time for your long weekend drink run.
So, how does the alcohol tax work?
When you buy booze in Ontario, you’re not just paying for the drink, you’re also paying for a mix of taxes and markups that can add significantly to the final price.
In this case, the basic tax (sometimes called the “basic tax on alcohol beverages”) is paid by the producers, like local breweries, distilleries and cideries. It’s calculated as a percentage of the price they charge to sell their products, either to retailers like the LCBO or directly to you.
Even though producers pay the tax directly, they typically pass that cost on to customers, so a lower tax means a lower price at the shelf. It’s similar for microbreweries and RTD (ready-to-drink) makers, who are taxed per litre or by markup percentage, depending on the product type.
The LCBO also applies its own markup, which is being reduced in tandem with these tax cuts, meaning your total cost at checkout should reflect the savings.
Spirits up: Local distilleries get a big tax break
As Ontario residents head into their LCBO, they will be met with a plethora of locally made gin, vodka, whisky and other spirits that are ready for their big break. The tax on spirits sold at Ontario distilleries is being cut in half, from 61.5% down to 30.75%, which will also reflect the prices on LCBO store shelves.
So, for example, if a local distillery makes a $50 bottle of gin, the old tax rate of 61.5% would add $30.75 in tax, bringing the price up to over $80 — and that’s before retail markup. With the new reduced rate of 30.75%, that tax drops to $15.38. So, not only will you save some money, but you may just discover a new favourite made in your own backyard.
Your six-pack just got better and cheaper
Imagine rolling up to your local store or that riverside patio knowing you’re supporting a local brewery, and paying less for it. Ontario’s 300+ craft microbreweries are also getting a major leg up with beer taxes being slashed nearly in half:
- Draft beer: halved from 36¢ to 18¢ per litre
- Bottles & cans: lowered from 40¢ to 20¢ per litre
The icing on the cake? The LCBO is mirroring those cuts with its own markups, so you’ll see real savings at checkout, which means you might actually splurge on that extra flight of IPAs or a surprise seasonal brew.
These local gems, most based outside the GTA, employ thousands and generate over $683 million a year, all while pouring community spirit and regional flavour into every pint.
Crisp, refreshing ciders now more tempting than ever
Love sipping something light under the summer sun? Ciders and RTDs are about to get a lot more wallet-friendly.
Right now, the government adds big markups on these drinks, sometimes doubling their price at the store. But starting August 1, those markups will be slashed nearly in half:
- Ciders: The extra fee you pay will drop from about 60% of the price to just 32%
- Wine-based RTDs (think sangrias and spritzers): their markups fall from nearly 65% down to 48%
- Spirit-based RTDs (vodka sodas, rum punches, and the like): those sky-high markups (almost 97%) will come down to 48%
What does that mean? On a typical $10 can of cider or RTD, you could save $2 to $3 off the shelf price. More choices, more savings and more reasons to enjoy a refreshing drink without breaking the bank.
From pocket change to powerhouse: Ontario’s $200M alcohol boost
We’re not just talking pocket change here. The province estimates these changes bring in over $200 million in support to Ontario’s alcohol sector by the end of 2025. That’s not small-town change. It’s real momentum for local producers.
For context: Ontario’s alcohol ecosystem generates nearly $13 billion in annual revenue, supports 90,000 jobs, and powers rural communities — from fruit orchards to local distilleries and breweries. This tax relief creates space for innovation, lowers the barrier to entry for small producers and cultivates sustainable growth.
A pint of pride
For many Ontarians, the pride in our local brews is real. From 2023 to 2024, 88% of beer dollars spent in Canada went toward products brewed right here. That’s nearly nine out of every 10 bottles, cans and pints proudly domestic.
Back in 2015, craft beer sales in Ontario jumped 36%, which was a significant surge that helped lay the foundation for the thriving, diverse craft beer scene we enjoy today. Since then, local brewers have steadily expanded their share of the market, winning over beer lovers with unique flavours and authentic stories rooted in their communities.
So, when you pick up that local six-pack or cider can after August 1, you’re not just grabbing a drink — you’re supporting a movement that sustains jobs, fuels rural economies and celebrates Canadian pride in every pour.
Cheers at the checkout
Saving money at the checkout is just one part of the story. These tax breaks support the people, places and passion behind every bottle and can produced in the province of Ontario. With more affordable local spirits, craft brews and ciders on the shelves, Ontarians can enjoy summer with pride and new possibilities. Whether you’re raising a glass with friends or discovering a new favourite from nearby, these shifts will make every sip better for both your wallet and your community.
Sources
1. CP24: Ontario to spend hundreds of millions to boost alcohol sector (May 15, 2025)
2. Statistics Canada: Buying Canadian: The beer edition (July 9, 2025)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.