Jay Goldberg is the North American Affairs Manager at the Consumer Choice Center.British Columbia’s NDP government may have just taken its first major step towards introducing a sugary drink tax, with the Select Standing Committee on Finance and Government Services having released its report on the Budget 2027 consultation.The Standing Committee, controlled by Premier David Eby’s NDP majority government, recommends that the government “introduce financial disincentives to reduce the consumption of drinks with added sugar, except fruit juice.”One specific recommendation, put forward by the Heart and Stroke Foundation of Canada, would see an end to BC’s provincial sales tax exemption on non-carbonated sugary beverages (the PST already applies to carbonated sugary drinks) and the introduction of a 20-cent-per-litre sugar tax for both carbonated and non-carbonated sugary drinks.The rationale? Tackling Canada’s obesity epidemic.Let’s get something out of the way: yes, Canada has an obesity problem. This is true for both adults and children. Canada’s obesity rate doubled between 1978 and 2014, and general forecasts suggest that those numbers have and will continue to increase further still.Obesity represents a genuine challenge to Canada’s healthcare system. Governments are rightly concerned. But is a sugary drink tax really the answer to our obesity epidemic?.The logic behind a sugary drink tax is the same kind of logic that’s behind other sin taxes: the idea is that if you raise costs, consumers will be less likely to buy a given product, which will improve health outcomes and lower obesity-related costs for the health sector.Seems simple, right?The problem is that these sin taxes never really achieve their goals, all the while hurting those with lower incomes the most.Just take a gander at outcomes in other jurisdictions.Facing an obesity rate of nearly 70%, Mexico enacted a sugary drink tax back in 2014 and has hiked the tax multiple times. But an analysis of the impact of the first wave of Mexico’s tax showed that it lowered consumption of sugary drinks by roughly 4%, which represents fewer than seven calories per day. That’s hardly a shining success story.There have been recent proposals for sugary drink taxes in Canada domestically, too. Julie Dabrusin, now a Cabinet minister under Prime Minister Mark Carney, proposed a 20-cent-per-litre sugary drink tax when she was a backbencher under former prime minister Justin Trudeau. And in New Brunswick’s 2018 provincial election, the Green Party proposed a sweeping new sugary drink tax on all pop, most juices, all carbonated water, all non-carbonated flavoured water, most teas, drinkable yogurts, and flavoured milk.The problem? Dabrusin never actually said how much her proposal would reduce sugary drink consumption, while a Green Party analysis of its own proposal suggested its 20-cent-per-litre tax would reduce intake by a measly 2%..Two percent? That’s hardly an effective policy proposal.The only sugary drink tax that has been enacted in Canada to date was applied in Newfoundland and Labrador by the provincial Liberals. Yet that very same Liberal government ultimately repealed the tax last year.Former premier John Hogan, who initiated the repeal of the tax, said that he thought it was best for the province to explore other avenues to improve Newfoundlanders’ and Labradorians' health after a three-year experiment with a sugary drink tax.“In the grand scheme of things, we need to continue to look at other options for well-being,” said Hogan.Hogan also pointed to affordability concerns as a key reason why he decided to repeal the tax.Affordability is such a major concern with sugary drink taxes because they’re so regressive..Consider the evidence from Mexico: more than 60% of the tax revenue generated from Mexico’s sugary drink tax came from low-income households, meaning government funds were raised largely on the backs of the most vulnerable.That’s a regressive tax, and it’s something Canadians can ill-afford at a time when more than 40% of Canadians say they’re $200 away from not being able to pay their bills.A sugary drink tax simply doesn’t make sense. Don’t just take my word for it: listen to the experts.The New Zealand Institute of Economic Research, in a report to the Ministry of Health, stated, “We have yet to see any clear evidence that imposing a sugar tax would meet a comprehensive cost-benefit test.”Eby should consider the evidence from other jurisdictions, listen to the real experts with actual evidence, and flatly reject a sugary drink tax proposal.Jay Goldberg is the North American Affairs Manager at the Consumer Choice Center.
