OTTAWA—The federal government has weighed the pros and cons of a financial deterrent aimed at shrinking bulging waistlines: a tax on soda pop.
Finance Minister Bill Morneau’s office requested an internal analysis last winter to explore the “issues and impacts in respect of a potential tax on soft drinks.”
The information was contained in a Jan. 29 briefing note prepared for Morneau as he drew up the Liberal government’s maiden budget, which was tabled in March.
“A number of health organizations have called on the government to implement taxes on sugar-sweetened beverages (SSBs), as a strategy to address obesity,” reads the memo signed by deputy finance minister Paul Rochon.
The partially redacted, “secret” briefing was obtained by The Canadian Press under the Access to Information Act.
As an example, the document pointed to a pre-budget recommendation made by the Heart and Stroke Foundation, which urged Ottawa to impose a tax of five cents per 100 millilitres on sugar-sweetened beverages.
The Heart and Stroke Foundation told Ottawa that such a levy would be a sustainable source of tax revenue that would generate $1.8 billion every year for the public treasury.
In Morneau’s spring budget, the Liberal government pledged to help “families make better food choices” and indicated it would take steps during 2016-17 to add more details on food labels about added sugars and artificial dyes in processed products.
The budget made no mention of imposing taxes on sugary or fatty foods and beverages.
Asked about the analysis, a spokeswoman for Morneau said it was requested during the pre-budget period when the finance minister’s office was in exploratory mode and had a responsibility to examine options and proposals.
“This is an issue that was raised in the pre-budget consultation period by several stakeholders—both for and against—and we asked for an analysis in order to better understand it,” Annie Donolo said in an email.
The push to tax sugar-filled beverages has gained momentum in recent months.
In March, a Senate committee released a report about fighting obesity that recommended Ottawa explore the possibility of implementing a new tax on sugar-sweetened and artificially-sweetened beverages.
Citing the Senate report, members of the Green party voted last weekend in support of a resolution that stated a Green government would introduce a tax on these sweetened drinks.
However, the Canadian Beverage Association has opposed any plan to tax sugar-sweetened and artificially sweetened drinks.
The association, which represents 60,000 workers in the industry, has said that efforts to tax these products have proven ineffective in reducing consumption in other jurisdictions. It also warned it would increase the cost of groceries.
The analysis portion of Morneau’s document was largely blacked out, though it did note that other governments have introduced various taxes on soda, fat, and sugar “with differing results.”
The memo listed some examples, including targeted taxes imposed on specific products to improve nutrition.
Among them, it said Denmark’s government repealed its 15-month old “fat tax” in 2012 and announced it would abandon a proposal to tax sugar out of concerns it would hurt low-income earners. Denmark also repealed its decades-old tax on soft drinks in 2013.
From The Canadian Press
