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Sugar tax push back


SOUTHWEST COAST – The NL government has set a goal to become one of the healthiest provinces in Canada by 2031. As a part of this initiative, last month it outlined amendments to the Revenue Administration Act to reduce the consumption of sugar-sweetened beverages.

The proposed legislation is intended to encourage residents to choose healthier beverages and is part of an effort to create a culture that emphasizes healthy living, which will result in better health outcomes. The tax is designed to help avoid unnecessary demands on the healthcare system as high sugar intake is associated with chronic diseases, like diabetes.

Should the legislation pass, it will be put in place Sept. 1, 2022. This will result in a tax of 20 cents per litre, paid by residents at checkout.

Deputy Premier Siobhan Coady, Minister of Finance, is confident this new tax will improve the lives of residents.

“The average household in Newfoundland and Labrador spends an estimated 2.8 per cent of its total annual food and beverage expenditures on sugar sweetened beverages. This is the highest in Canada, and twice the Canadian average of 1.4 percent. Our goal is to encourage residents to switch to healthier beverages, resulting in long-term health gains for our province.

Coady stated that evidence from other areas that have implemented a sugar tax has shown that it will not result in job losses in the beverage industry. She also noted that there are supports in place for low-income earners.

“We have a number of programs to help and support the low income, and we’re going to continue to increase, and provide, and do what we can to support the lower income, including doing a full review on the poverty reduction strategy. But I will say, again, that this is about choice of drink, not that you will not consume soft drinks. So just a matter of what you choose to drink vs that you will drink,” stated Coady.

The province expects to bring in $9 million in sugar tax revenue, and these funds will go towards health programs.

“We’ve already started, as I’ve indicated in my opening remarks, with a physical activity tax credit, with improvements to the diabetic insulin pump program, with other programs that I’ve indicated earlier. So we’re already moving towards making sure that people make better choices to improve their health. So we’re taking them, using some of the money that we will gain in this tax and putting it towards those types of programs,” said Coady.

Coady later clarified that the funds from the tax will not be earmarked for specific health improvement programs, but instead will go into general revenue to then be used for such programs.

“The way that finance in the province is done it would go into general revenue, but we have already moved towards introducing programs that would utilize the money.”

Meanwhile multiple areas in NL have residents unable to access to safe drinking water. Coady noted that the province is doing what they can to improve access to water in communities.

“We are making investments in improving our water system around the province of Newfoundland and Labrador, another critically important initiative of this government. We do need to ensure that the boil water orders are dispensed with. We want to make sure that water is readily available to all. But I will say that the World Health Organization, the Pediatric Association, the Diabetes Association, the Cancer Association, all of them recommend that this type of program be put in place, this tax, be put in place to help with the outcomes and the choices that people make in their soft drink selection,” said Coady.

Coady stated that the provincial government does take actions that make sure healthy options are available to the public.

“I know the department of health has worked with the milk industry, for example, to lower the amount of sugar in milk products, and making sure that we are always looking for lower sugar content in various other products as well. So we’re always working towards that goal. And we also work with Kids Eat Smart to ensure, for example, that there’s healthy nutritional food available for children in schools.”

Mary Ann Butt, Senior Vice President for the Heart and Stroke Foundation in Newfoundland, Nova Scotia, and Prince Edward Island, also believes that this will help improve the health of provincial residents.

“Our organization has long supported a sugary drinks tax as one mechanism to help address the social determinants of health, and are delighted to see Newfoundland and Labrador step forward as a Canadian leader on this issue. As the budget noted, Newfoundland and Labrador residents are living with high levels of chronic disease. Diseases such as heart disease, type 2 diabetes and cancer lead to health challenges across the lifespan, increased demands on the healthcare system – including increasing the risk of severe illness from infectious diseases such as COVID-19 – and have a disproportionate impact on marginalized communities,” said Butt.

The tax of $0.20 per litre will be applied to beverages like regular soft drinks, fruit-flavoured juices, sports and energy drinks, pre-packaged milkshakes and coffee beverages, and concentrated mixtures.

The tax will not apply to beverages that have non-caloric sweeteners like diet sodas, natural fruit and vegetable juices, alcohol beverages, medical or therapeutic beverages like infant formula, milks and yogurt beverages, ingredients used in cooking, beverages prepared at the point of sale like coffee, beverages less than 75 ml, or beverages brought into the province that total less than 5 litres.

The initiative to tax sugary drinks has not been well received by all parties, including the Canadian Taxpayers Federation, an advocacy group dedicated to lower taxes.

“It’s a money grab. It’s not about making Canadians thinner. It’s about fattening government coffers. A sugar tax won’t improve health, but it will increase the cost of living and cause the most pain for those who can least afford it,” said Franco Terrazzano, Federal Director of the Canadian Taxpayers Federation.

Terrazzano said that the government can improve the health of residents by improving affordability of healthy options by reducing taxes.

“If the government wants to improve the health of its citizens, well the evidence is clear: sugar taxes don’t make people healthier, but they do increase the cost of living. Evidence from other jurisdictions show that a sugar tax doesn’t have a big impact on what beverages people buy, which means this tax will leave less money in taxpayers’ pockets rather than improve health. Food and drink taxes in the United States, Mexico, France, Hungary and Denmark have not resulted in a discernible improvement in obesity rates or Body Mass Index (BMI).”

Terrazzano said that taxing manufacturers also is not the answer.

“Taxing manufacturers wouldn’t solve the problem and could result in less jobs and higher prices for customers. Politicians should be making sure people have enough money in their pockets so they can afford to make healthy decisions. But we have seen governments increase the cost of living through higher taxes and through inflation.”

Terrazzano believes this tax only targets the vulnerable.

“Sugar taxes are unfair because they cause the most pain for the people who can least afford it. The idea of imposing a sugar tax while the cost of living is soaring and while so many Canadians are struggling through the pandemic is extremely tone deaf,” said Terrazzano. “The tax will limit people’s options by leaving them with less money in their pockets. The tax will mean $9 million more for politicians, but $9 million less for families in Newfoundland and Labrador to spend every year on the goods and services that they need. And it will be the people who already have less who will feel the most pain from this sugar tax.”

He also thinks that rather than implementing a sugar tax, the province should instead look at its debt.

“Newfoundland and Labrador needs to tackle its debt problem, but that means reining in the massive government overspending, not reaching further into taxpayers’ pockets. Newfoundland and Labrador has the highest per person provincial government spending in Canada, according to the premier’s economic recovery team. Politicians need to look in the mirror and cut the fat on their budget rather than going after taxpayers for more money,” said Terrazzano.

Residents on the Southwest coast took to social media to voice their objection to the proposed tax.

“Will be a lot of jobs lost for people and companies who produce drinks. But yet, it will still be ok to buy bags of sugar, cookies and cakes etc. Sort of a double standard, don’t you think?,” wrote Greg Sheaves.

Samantha French suggested a different way to promote healthier lifestyles that wouldn’t mean more taxes for consumers.

“Instead of trying to make subsidized exercise programs, accessible dietitians or roll out an affordable healthy eating plan they just tax people, so they not only can’t afford to eat healthy they also can’t afford to eat garbage. I know this is only on drinks right now but we all know where it’s going,” wrote French.

Roger Spencer said there were other priorities to focus on.

“Watch where the royalties go from the alternative drinks we choose from. If we bottled more of our own water and created our own ‘acceptable’ drinks to catch the royalties, we would be in great shape. Instead, the cash flow moves off the island once again. It is this short-sighted decision making that keeps us all walking this treadmill of debt and austerity. Economic literacy seems to be an issue in the House of Assembly. We need a new vision of what we want this province to become and stay focused on it. Give the politicians no other choice but to go along with what we want. Quit accepting these blind patchwork solutions we keep finding ourselves upset and depressed about.”

Lorraine Griffin worried that the tax will hurt families.

“I think it’s a tax grab. Poor families cannot afford the higher price liquids such as Tropicana but will buy the cheaper stuff that may be vitamin enriched. As for no tax on diet sodas, their reasoning is crazy. That stuff is pure garbage. Worse than the normal pop. No encouragement not to drink diet drinks from the government. I think this tax has not been thoroughly explored by the rich government members.”

There was an overall consensus that the proposed sugar tax is little more than just another money grab, a sentiment echoed by Joe Lane.

“Prices on everything are to the roof. Media and government claiming 4 per cent increase but actual prices on commodities are 20-30 per cent or more, depending on what it is. Price gouging is on the rise and nobody controlling it.”

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