Social cost of alcohol addiction in Canada outweighs government revenue by $6 billion dollars

Canadians continue to pay a high cost as a society when it comes to alcohol consumption.

A recent study from the Canadian Center on Substance Use and Addiction (CCSA) shows that in 2020 net government revenue from alcohol sales was $13 billion, while the net social costs from alcohol use were $19 billion leaving Canadians with a $6 billion alcohol deficit.

The costs include health care, people missing work, and criminal justice costs.

“Some of the costs are deaths, hospitalization, addictions, treatment, long-term disability, short-term disability, absenteeism, and presentism when people are at work but their capacity is reduced,” said Adam Sherk senior scientist and special policy advisor with the CCSA.

“But there are many secondhand effects — the harms to others that are difficult to cost. Drinking in the home has a massive impact on domestic partner violence with kids and youth, but that’s not part of this cost to study,” Sherk said.

Sherk compiled data from 2007 to 2020 that shows the alcohol deficit has more than doubled in that time.

Sherk said there are decades of research from many different countries that show the most effective way to change consumer purchasing patterns around alcohol is to move around the price.

On April 1, the federal government officially raised its alcohol excise tax to 2 per cent.

Originally, the tax was set to increase to 4.7 per cent, in connection with inflation. But the government decided to cap it at 2 per cent, a break welcomed by those in the alcohol business. Sherk says taking inflation into account, the 2 per cent increase was a 2.7% real decrease in the tax. He calls that a corporate subsidy for bars and restaurants.

“Not adjusting the federal alcohol excise tax along with inflation is a poor idea for health and well-being because alcohol becomes cheaper over time. It advantages alcohol manufacturers, including smaller players, but especially the largest corporations which produce a vast amount of alcohol. The lion’s share of the subsidy will be vacuumed up by the largest corporations,” Sherk said.

Calgarian Earl Thiessen stopped drinking in 2007.

“It almost cost me my life. It costs many of my friends their lives,” said Thiessen who is now the executive director of the Oxford House Foundation.

Oxford House provides helps for people in recovery from drug and alcohol addiction through affordable housing and support. In his role, he continues to see the price we all pay when it comes to alcohol.

“The strain on the system economically, divorce, treatment centers, psychologists, hospitals. I must have been in the hospital about 50 times,” Thiessen said.

“Alcohol still has the biggest impact on society. We call it ‘slow suicide’ because it just takes longer to have that impact on your liver and your stomach and your throat and your heart,” Thiessen said.

Sherk said the federal alcohol excise tax has gone down for many years, starting in the 1990s. He says it went down continuously overtime in real terms.

“It fell behind inflation and the price level of all other goods and services. So this makes alcohol cheaper compared to other goods and services and that tends to push up the sale of whatever we’re talking about,” Sherk said “Because of the serious health impacts of alcohol, it would be more reasonable to keep the price of alcohol, at least kind of stable to the price level and not allow it to decline overtime,” Sherk said.

At this point the Alberta government has no plans to increase the alcohol tax.

“Within the Ministry of Mental Health and Addiction, our focus is to build the Alberta Recovery Model and create a system of care that gives every person an opportunity to pursue recovery. Changes to taxes on alcohol are typically only considered when drafting the budget, and no proposals are currently under consideration.” said Hunter Baril, a spokesperson for the office of the Minister of Mental Health and Addiction.

A spokesperson for Health Canada said the department recognizes that alcohol use is a serious public health and safety issue that affects individuals and communities across Canada, and accounts for substantial health and social costs.

“Our actions to address alcohol-related harms are guided by the renewed Canadian Drugs and Substances Strategy (CDSS) which takes a public health and public safety approach to reduce the harms associated with substance use in Canada. This includes supporting research, conducting public awareness activities, developing guidance, and monitoring trends in alcohol consumption and harms,” read a statement from a Health Canada.