On the sugar tax

By Jaymie White

Local Journalism Initiative Reporter

WEST COAST – On Sept. 1, Newfoundland and Labrador will become the first province in Canada to implement a sugar tax on soft drinks and other drinks with added sugar such as fruit juices, iced tea, sweetened sports and energy drinks, and some frozen beverages as well. This tax will means an additional 20 cents a litre and the province estimates this will amount to $9 million in extra revenue.

MHA Tony Wakeham (Stephenville – Port au Port) who has been actively trying to get the government to reverse their decision on the sugar tax, said that while this may be an additional revenue for the province, an extra tax on Newfoundlanders and Labradorians already struggling is unjust and unfair.

“Any tax you put on people at a time where the cost of living is high, it’s not a good time to be implementing a new tax. The government, in their new budget, talked about no new tax increases this year but, of course, they approved this tax increase last year so this is a bit of smoke and mirrors on their part.”

Wakeham said the reason the province is giving for implementing this tax is unnecessary.

“Government talks about, and the Premier talks about behaviour modification, that this is why they need this tax, that people need to stop choosing to drink the sugary drinks. Now the industry will tell you that people are already moving in that direction without this tax being applied, and at the same time, one could argue if government wanted people to move away from sugary drinks, perhaps they should find a way to take the tax off of better options. For example, if you go into the store to buy a 500 ml of milk and pay tax on it, or a bottle of water and pay tax on it, maybe if you didn’t tax those things it would be more inexpensive things for them to choose.”

Wakeham said that people who are least able to afford another tax will be the ones most affected.

“The concern is that the people on the lower level of income will be mostly affected by this and that’s unfair. That’s why this is a very negative tax and we don’t need it at this time. If you want to encourage people to reduce their consumption of sugary drinks, then find a way to help them do that and that’s not simply by increasing costs.”

Wakeham said this tax will just take more money out of the pockets of provincial residents.

“This year they’re budgeting $5 million dollars. They originally talked about a $9 million dollar revenue stream, so basically it’s a revenue generation, once again, for the government. They will argue again that they want to turn around and try and modify behaviour. Well I’m sorry, but I don’t believe the people of Newfoundland and Labrador need their behaviour modified by more taxes.”

Wakeham said that if this is the reason why the government wants to implement this tax, there are different ways to go about it. He maintains that levying a new tax on people who are already overburdened with the high cost of gas, food, and home heating fuels, is the wrong approach.

“I think if government is really serious about wanting to move people away from sugary products, and we all get that – we all understand the impact that sugar consumption can have, especially on diabetics and the high amount of diabetes in our province – but there are other ways to do it, in a more positive way. By actually going out and promoting campaigns to move people away from sugary drinks – because it’s not just your pop. This sugar is in a lot of other products that are on the shelves right now in our supermarkets and convenience stores.”

Wakeham said the Premier has talked about European countries that have implemented something similar with success, but stated that this is not exactly the case.

“What they did in a lot of other countries in Europe, in England for example, they didn’t tax the consumer. What they did is they went to the manufacturer and said if you lower the amount of sugar you put in your formula when you make your product, we’ll give you a lower tax rate. So in other words, they incentivised the manufacturers to lessen the amount of sugar they actually use in their product,” said Wakeham. “Now the province of Newfoundland and Labrador doesn’t have the ability to do that because they aren’t going to tell national and multinational companies how to make their product. That’s why this sugar tax, which hasn’t been implemented anywhere else in Canada that I know of, leaves the question of why. Why do you want to add other tax burdens on the people of Newfoundland and Labrador at this time? If you want to do more research on this, do it, but defer it because that’s the last thing people need right now, another tax and more money coming out of their pockets.”

Wakeham said that to date the government has not responded favourably to his requests to stop the implementation of this tax.

“They’ve refused. They’ve drawn a line in the sand basically and say it seems like it is full speed ahead. We’ve made these suggestions to government when the House of Assembly was open and we continue to make these suggestions to them. I know the industries themselves have written to the government on several occasions outlining their side of how this may or may not work. There’s been a lot of challenges with a lot of the store owners and how exactly they’re going to implement it at the cash registers, all of those challenges, but the fundamental principle is that the last thing the people in our province need right now is another tax.”

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