The Toronto Distillery Co., a local maker of organic spirits, is in a fight with the LCBO about unpaid fees that could threaten the company’s existence.
The company is taking legal action against the LCBO because they say the LCBO is unfairly requiring them to pay taxes on booze they sell directly from their distillery; a tax that they say is “inconsistent with Canada’s constitution.”
Their argument stems from the Constitution Act of 1867 which states that all taxes in this country need to be legislated. That is, they need to be presented in the house (federal or provincial) and then voted on. As such, the Toronto Distillery Co. claims that current fees for onsite stores that are imposed on distilleries and created by the Ministry of Finance (and not voted on), are not consistent with this law.
The current fees related to booze sold onsite, The Toronto Distillery Co. alleges, are based on the same mark-up the LCBO uses on the booze they sell in their actual stores. That is to say, if a distillery opts to sell liquor from their own premises, they are forced to mark up their prices 140% and pay the LCBO a hefty fee. Continue reading