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By Derek Craddock

SUGAR TAX

Should Saskatchewan adopt a tax on soft drinks?

Oct 21, 2021 | 2:11 PM

In case you missed it, a tax on sugary drinks is coming to Atlantic Canada, but could it also work in Saskatchewan?

Earlier this week, the Government of Newfoundland and Labrador announced it was introducing a tax of 20 cents a litre on soft drink products in September 2022, a move that could bring in roughly $9 million a year in revenue to the province.

The concept of a soft drink tax is nothing new as several countries have either debated the idea or implemented a sugar tax or sweetened beverage tax (SBT), including the U.K., South Africa and Mexico.

Several U.S. states or cities have also introduced a levy on sugary drinks. However, some areas like Cook County, Ill. have repealed their taxes.

While Canada does not have a soft drink tax, some provinces, including Saskatchewan and B.C., removed the PST exemption for soft drinks to promote healthy lifestyles.

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In an email to paNOW, the Government of Saskatchewan said that rule came into effect in 2017 but there are currently no plans for a provincewide tax on soft drinks.

“Ministry of Finance officials continue to monitor the taxation initiatives of other jurisdictions, including the revenue implications and whether those policies or initiatives achieve their intended objectives.”

Nonetheless, calls for a soft drink tax continue to grow from organizations like the Heart and Stroke Foundation, Diabetes Canada, and the Canadian Pediatric Society.

In responding to Newfoundland’s decision, Dr. Seema Nagpal with Diabetes Canada said it’s an important step to recognizing the negative health effects of sugar-sweetened beverages.

“Research has shown that excessive consumption (more than one serving per day) of sugar-sweetened beverages — such as non-diet pop, sports drinks, energy drinks and blended coffee drinks — increases the risk of developing type 2 diabetes, regardless of weight.”

“Diabetes Canada applauds the Government of Newfoundland and Labrador,” added Director of Government Relations for Diabetes Canada, Joan King. “We urge all governments to make a commitment to promote the health of Canadians by introducing similar interventions.”

That stance was echoed by the Heart and Stroke Foundation who said a levy on soft drinks is one way to limit consumption of these products.

“A sugary beverage levy should be part of a multi-pronged strategy to make the healthy choices the easy choices,” The Heart and Stroke Foundation said in a statement. “Other initiatives include improved food and menu labelling, better access to affordable healthy foods, increased food literacy and preparation skills, and public education.”

While there is widespread support for this initiative, the question remains: does this tax reduce consumption of sugary drinks and cut rates for obesity and diabetes?

While data from other countries show a reduction in the purchase and consumption of soft drinks, critics have noted the tax does little to address the issues of obesity.

In a column written for the Consumer Choice Centre, writer David Clement believed consumption taxes on food and drinks, including sweetened beverages, do little to tip the scales on obesity rates and are more regressive than anything.

Turning to data from Mexico’s tax, Clement said while it brought in more government revenue, the majority of those who purchased soft drinks were from families at or below the poverty line.

According to data from IBIS World, soft drink consumption on a per capita basis has seen a steady decline since 2000. Last year, the consumption numbers were 52.8 litres per capita, compared to 56 the year before.

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Derek.craddock@pattisonmedia.com

On Twitter: @PA_Craddock