Nova Scotia Brewery Threatens to Leave Province Due to Rising Costs and Water Rate Hikes

Oland Brewery, a Nova Scotia-based company, has threatened to leave the province due to looming water rate hikes and other rising business costs. The brewery, owned by Labatt, cited proposed rate increases from Halifax Water, rising power and natural gas prices, and the province's corporate tax rate as factors that make it difficult to operate in Nova Scotia. The company's threat to relocate may be seen as a flexing of muscles, but could have a significant impact on the brand's loyal following.

An iconic Halifax-based brewery, Oland Brewery, has threatened to relocate due to escalating business costs, including looming water rate hikes. The brewery, which produces historic Maritime beers such as Oland Export, Schooner, and Alexander Keith's, has cited proposed rate increases from Halifax Water, rising power and natural gas prices, and the province's corporate tax rate as significant challenges to its operations in Nova Scotia.

Oland Brewery, owned by Labatt, which is a subsidiary of Anheuser-Busch InBev, has filed a letter with the Nova Scotia Regulatory and Appeals Board, expressing concerns about the proposed rate increases. The utility, Halifax Water, is seeking two double-digit rate increases in 2026, with the first taking effect on January 1 and the second on April 1. These increases range from 15.8% to 24.5%, depending on the size of the water meter. The brewery's general manager, Frederick Tofflemire, stated that these increases would make it significantly harder to do business in Nova Scotia, potentially threatening existing production levels.

The brewery's threat to relocate may be seen as a strategic move to highlight the impact of the proposed rate hikes. Professor Lisa Watson, dean of the Gerald Schwartz School of Business at St. Francis Xavier University, noted that while the brewery could likely relocate relatively easily due to its parent company's extensive operations, she questioned the sincerity of the threat. She suggested that the message was more about flexing muscles to underscore the potential impact of the rate increases rather than an immediate plan to leave the province.

The proposed rate hikes come at a time when businesses in Nova Scotia have been dealing with a "death by a thousand cuts" scenario, as various costs, including utilities, have been rising. Duncan Robertson, director of legislative affairs for Nova Scotia at the Canadian Federation of Independent Business, pointed out that while the province has made notable improvements to the business environment, the utilities play a significant role in creating a favourable business climate. He emphasized the need for better forecasting and transparency from utilities regarding rate increases.

The regulatory board will scrutinize the proposed rate increases in a public hearing scheduled for next week. Oland Brewery is an intervener in the case but has indicated that it will not be appearing at the hearing, with the letter it filed serving as its opening statement.

References:
[1] https://ca.news.yahoo.com/oland-brewery-threatens-leave-nova-090000891.html
[2] https://www.cbc.ca/news/canada/nova-scotia/oland-brewery-threatens-to-leave-nova-scotia-1.7628327