I mean, obviously this guy is wrong on so many levels. For one, I have never seen 30 packs of cans for $15 (unless it's the kind of death-inducing cheap swill that makes Drew Magary say "I MUST HAVE IT!" in his Thursday Jamboroo column.)
Second, the majority of tax on beer in Ontario is volume based. They are based on both the volume of the packaged beer itself, as well as the tax rate the brewer falls under being determined by the overall volume of beer they produce and package.
The "44%" you see mentioned a lot is just a shorthand for how much tax comprises the Ontario price of an average priced beer made by a large producer. I work it out here for a 24 of Bud bottles costing $33.95.
Here are where I got my figures for the tax rates:
New York
Federal tax in Canada
Ontario combined "beer basic" and "volume" taxes
First of all, finding a price for 30 packs of Blue in New York state is nearly impossible. Consumer's Beverages (Buffalo's beer store! Who close at 5 on Sundays! Grrrrr...) at one point listed 30 bottles at $19.99 on this weird site. Maybe it's a past flyer? It's not the current one, at any rate.
The only place I found 30 cans was somewhere in Pennsylvania (where you can only go to government run or specially licensed beverage stores to buy beer, and can't buy less than a 24 pack! You have to buy from a hotel or restaurant to get less than 24! And you thought our laws were crazy!)
I'm going to make things easy, and do 24 cans. Wegmans in the Buffalo area this week has a 24 pack for $16.99. That seems to be a very good retail price, and is a pretty fair way to go about this comparison.
Starting with the US pricing is very convenient. You know why? Their prices don't include sales tax or deposit! People have a clouded perception right from the beginning of this comparison. Hell, some people who have tweeted thousands of times on this issue didn't know that Ontario prices included tax and deposit. Sales tax on all goods in New York is 4%, and deposit is 5 cents a container, in case you were wondering, making that beer actually cost $18.87 at the register. Anyway....
We start with the $16.99 price.
Now, we must strip out the only "sin tax" on beer in New York state. Grab ahold of your britches, because it's a whopping 14 cents a GALLON! Unlike New York's hidden tax on beer, a gallon is massive. It is equal to 3.78541 L.
So, the hidden tax on those 24 cans of Blue are (0.355 L per can x 24 cans/ 3.78541 L to GAL x 0.14/GAL tax) is $0.315104! 31 and one half cents!
Let's round it up to 32 cents strip it out of the $16.99. That leaves us with $16.67 real US dollars as the real price of the goods.
Now, here's the fun part! Let's figure out how much this product would cost if the taxes we had to pay in our fine province were applied to it.
First, let's figure out the volume of the package (0.355x24)
8.52L
Now let's apply the federal excise tax to it. Since Labatt easily produces over the max threshold for tax discounts of 75,000 hL of beer a year (equivalent to 21,126,760 regular size cans of beer) their rate is the maximum $0.3122/L.
$2.66 in excise tax
Here's where things really get fun!
Ontario commodity (shorthand for the combined beer basic and volume) taxes on beer produced by large brewers is 93.02 cents a litre! That is insane! By comparison, converting that New York rate to litres means their tax is $0.04 a litre! Anyway...
$7.93 in Ontario commodity taxes!!
Also, since it's cans (and adding more fees is always fun!) Ontario also charges an environmental levy of 8.93 cents per non-refilliable container.
That's another $2.14 in tax.
That gives us a grand (grand as in HUGE) total of $12.73 in Ontario taxes!!!
Adding that to our $16.67 US price gives us $29.40.
How much does it really cost at the Beer Store if you take out the HST and deposit? Well, it's $36.95 all in. Minus the $2.40 for deposit, and the 13% HST gives us a grand total of...
$30.57! Not quite the massive difference you were expecting, right? Of course, there is one other HUGE factor people often ignore.
I will leave the conversion from US to Canadian dollars as an exercise for the reader. Our dollar is going in the tank (and with it, the NHL's salary cap) thanks to Obama being awesome (I guess), and the one huge moneymaking thing our country was doing (Alberta oil sands) collapsing in value. Who knows, maybe we'll catch back up when a crazy Tea Partier like Joni Ernst or (LOL) Ted Cruz are President! I leave that for you to calculate in your current context, dear reader. Our dollar is currently worth $0.80 US, and banks aren't in the habit of NOT making money for themselves, so you will pay several points more than that.
OK, I give. I really want to do this. That US beer price with Ontario hidden taxes applied, in Canadian dollars on this January 23, 2015 is $36.75. That's 20 CENTS lower than the Beer Store's all-in price that includes HST and deposit.
Adding HST and Ontario deposit to that US price with Ontario hidden taxes, converted for today's exchange rate is...
$43.92!!!!!!!
Yeah, I think the only problem with the raw retail costs in Ontario is perception.
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