The tax women cometh
Alcohol taxes brought in $12B into Canadian federal and provincial government coffers last year. The government doesn’t leave a drop untaxed. Before we could even own a still, we had to prove we can measure the alcohol we produce so we can pay excise tax on it. We applied for our federal excise license last October but was only assigned an excise officer in May. Luckily, the officer responsible for our application was very friendly and helped us through the process.
The first thing we had to do was purchase instruments to measure and weight alcohol that are approved by Excise Canada. Unfortunately, they don’t publish a list of approved instruments so we had to submit ones we thought would be approved. A time consuming process since we had to wait for the CRA lab’s approval. We ended up purchasing an Anton Paar DMA 4500 alcohol density meter. This $25K machine can measure alcohol volume to the five decimal places of precision required by Excise Canada. Total overkill considering we had a $2K Anton Paar Snap 40 that was accurate to one decimal place.
The second big ticket item we had to buy for the CRA was an approved scale. After doing some research, I concluded a platform scale would work best for us. It would allow us to weight barrels of alcohol collected from the still as well as weighing shipping pallets. I found an American vendor, Rice Lake, that had a Measurements Canada approved platform scale. They had a distributor a half hour away in Burnstown, GTR Scales. They recently supplied a scale to the nearby King’s Lock Distillery so they were familiar with the Excise Canada’s process.
With both the alcohol meter and scale on site, I scheduled our Excise exam with Amy. The GTR Scales technician came out before Amy arrived and setup the weights needed for the exam. He had to bring 2000KG of weights which our neighbour was kind enough to move into place with his forklift. With Amy present, he ran the scale through a series of tests. Once Amy was satisfied, he put his Measurement Canada seal on our scale. First part of the test passed.
Now it was Jessica’s turn to be examined. A week prior, we received vials from Excise Canada with unmarked alcohol samples. We had to measure the density and alcohol content of each vial. Our Anton Paar unit performed as expected and showed the vials to be 15%, 40% and 70% alcohol. Amy used a table to convert the density values into alcohol percentages. Her values didn’t match that of the Anton Paar unit so I insisted she record both. Luckily, I did since it turned out she had used the wrong table.
With these tests passed, we got our Federal Spirits Manufacturer's license from Excise Canada. Hurray! We can now pay taxes.