Proponents argue expanding sin taxes like those on alcohol and tobacco, to high sugar foods and drinks will reduce consumption. Or at least raise revenue to help fund treating the negative health outcomes such as obesity, diabetes, heart disease and stroke.
This sounds great in principle, but there are criticisms:
- Flat taxes of any type affect low income households disproportionately;
- Statistically, those with lower incomes rely on highly processed, high sugar food to a greater degree;
- A small tax on a small purchase will not deter anyone;
- Taxing sugar would be cumbersome to administer for government and retailers;
- Sugar taxes have failed in a number of countries. They just don’t work.
Most of the research to date has concluded, that while in theory a sugar tax should work, in practice there is no real decrease in consumption. That is until the most recent study on Mexico’s sugar tax and battle with obesity. With 70% of the adult population and a third of children overweight, something had to be done. In January 2014 the government brought in a 10 percent tax. A year in and sales have dropped 6 percent. It’s clear something is happening.
By 2019, 20 percent of Canadians will be obese. By the same date, a full 70 percent of Newfoundlanders and Labradoreans will be obese. This is a massive burden on our healthcare system, not to mention the quality and length of life of our citizens. Cheap, highly processed foods with high sugar, salt and fat are making high numbers of people really sick.
It’s true that there are many other factors affecting the health of our population, including genetics and activity levels. But it’s much like the fire triangle of oxygen, heat and fuel, where if one is removed, the fire will go out. With obesity related health issues we have genetics, calories and activity as our triangle.
While a sugar tax is no panacea, it is a signal that these products harm the public. It’s also a shift to proactive prevention. And sugar should only be the beginning, with taxes on high salt and saturated fat products to follow. Taxes should be designed so they have 2-3 tiers, with the highest sugar content having the highest tax. The revenue raised should not go to the general government coffers, but directed towards activities that promote healthy eating such as:
- Not-for-profits who provide food skills and healthy eating workshops for our most vulnerable and youth;
- Subsidies for locally grown or produced healthy food;
- A wellness campaign that signals as a province, now is the time to change the way we eat and live.
We could study this issue for years, put it to committee so to speak. Or we could just try a pilot and see if it works here. Sugar sweetened beverages (SSB) are the leading source of empty calories, with just one 355ml can having 10 teaspoons of sugar and no nutritional value. It’s a great place to start.
Edited January 26, 2015: Based on the assumptions below the potential gross value of the tax revenue from soda is $4,345,000 – 5,830,000 per year in NL alone.
- Per capita soda consumption: 82-110L per year
- Tax rate: 10cents/litre
- Population: 530,000
So how would we get started?
- Department of Health and Community Services would review sugar levels within SSB and make a recommendation on tiers. Also to develop mechanism for measuring sales and/or consumption of SSB.
- Department of Finance would review potential tax revenue from tiered SSB tax, as well as mechanisms to implement the tax.
- Government would draft and pass legislation as part of budget 2016-17.
- Department of Agriculture would administer local produce subsidy.
- Department of AES and/or HCS would administer funding to not-for-profits for food skills and healthy eating workshops.
Wondering how much added sugar is in your favourite food and drinks?
Update: September 2019
Public Health England and the Behavioural Insights Team release the progress report on the British sugar tax, the Soft Drinks Industry Levy (SDIL). The tax largely targeted product reformulation rather than decreases in consumption. During the period 2015 – 2018, sugar content in products decreased as follows:
- 2.9% reduction in average sugar across all products subject to the tax
- 8.5% reduction in breakfast cereals
- 10.3% reduction in yogurts
- 28.8% decrease in sugar sweetened beverages