In September, the province will become the first in Canada to introduce a special tax on sugary drinks, raising a projected $9 million in annual revenue.
At the historic Caines Grocery & Deli, in St. John’s, customer Cecil Parsons said life is already too expensive. “I’m not gonna keep buying it if it’s like a fortune to buy a pop, just like gasoline.”
The new tax, which takes effect Sept. 1, will apply an extra twenty cents a litre to a wide range of products, including regular soft drinks, and those with added sugar, like fruit juices, iced-tea and lemonades, along with sweetened sports and energy drinks, and some frozen fruit punches.
Caines owner David Howell said emerging from the pandemic slowdown was already difficult. He’s generally optimistic a strong tourism season will help him recover, but, with inflation already making day-to-day life a desperate struggle for some, he dreads another bump in prices.
“Low-income are primarily the ones, they say, that buy this stuff. And, they’re gonna be hit again. And, small businesses like myself, how much more do we have to incur before the government realizes we’re taxed enough as it is?”
The government says the new tax is about encouraging better habits. From a public health standpoint, it’s receiving much more positive reviews.
“We support the government in prioritizing the health of its citizens, and hope that other jurisdictions take notice and follow suit,” said Ann Besner, manager of research and public policy at Diabetes Canada.
While not an additional tax, British Columbia also took action, in 2021, by removing a provincial sales tax exemption for carbonated beverages that contain sugar. Besner said it’s important for all provinces and territories to acknowledge, “these beverages contribute to the overall sugar consumption of Canadians, and sugar can increase the risk of developing chronic diseases like diabetes.”
Diabetes Canada says the tax could help reverse a continuing rise in the disease. A recent report showed almost 12 million Canadians either have diabetes or are at risk of developing it — restricting their lives and putting ever-more stress on overloaded health-care systems.
Newfoundland and Labrador’s diabetes rate is especially high, something the province’s doctor-turned-Premier Andrew Furey is eager to fix.
But, critics say the timing is wrong. In the Newfoundland and Labrador House of Assembly, Progressive Conservative and New Democrat members insist the government should not be taking more money out of people’s pockets and, they’ve doggedly called for the Liberal government to postpone the sugar tax.
The government refuses to back off. In a typical exchange, from May 18, Finance Minister Siobhan Coady told the house, “There is choice when you choose to drink a beverage. You can drink one that’s laden with sugar or you can drink one without sugar.”
Complicating the issue is evidence in parts of the world that taxes on sugary drinks don’t always have the desired effect. Food researcher Sylvain Charlebois, of Dalhousie University, cited a study of sugar taxes in France and Hungary suggesting many people just get their sugar fix somewhere else.
“Most public health experts will desperately want to believe in the effectiveness of a sin tax on food, but the evidence is still quite weak at best.”
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