A Win for Alberta Restaurants: Government Reverses Wine Tax Change

In today’s Provincial Budget, the Government of Alberta announced it will replace the ad valorem tax on wine introduced in April 2025, returning to a simpler, flat-tax model.

Since the ad valorem tax was first announced, the Alberta Hospitality Association (AHA) has worked closely with our members and industry partners to clearly communicate how this complicated tax structure was creating real challenges for restaurants across the province. The tax disproportionately impacted wine pricing, added administrative complexity, and made it harder for operators to offer diverse wine lists at accessible price points for guests.

We are pleased to see the Government of Alberta respond to these concerns by reinstating a flat tax on wine effective April 1. The new structure will apply an increase of approximately $0.44 per bottle on all wines, generating needed provincial revenue while maintaining predictability and fairness for hospitality operators.

This change helps ensure restaurants can continue to offer quality wine selections at reasonable prices, supports consumer choice, and removes unnecessary complexity from an already challenging operating environment.

AHA will continue advocating for policies that support a sustainable, competitive hospitality industry across Alberta and we thank the Government for listening to industry feedback.

January 2026 - Press Conference on the Ad Valorem Tax

Background on AHA’s Advocacy for the Ad Valorem Tax

The Alberta Hospitality Association along with a coalition of other associations has long been raising the alarm on the province’s ad valorem wine tax, explaining that although it was framed as a “luxury” charge, it quietly increased costs on many of the wines served at everyday restaurants, disrupted Alberta’s historically competitive wine pricing, and added pressure to operators already battling high food, labour, and operating costs. AHA highlighted that this percentage-based tax, layered on top of the existing markup system, not only drove up prices for consumers and made it harder for restaurants to offer diverse, mid-tier wine selections, but also hurt efforts to support Canadian producers, since most Canadian wines fell into the tax’s higher brackets. Representing more than 700 Alberta restaurants, the Association consistently urged the government and AGLC to rethink the policy and return to a fair, flat markup model in order to protect small businesses and maintain a vibrant hospitality sector.