There’s little sweet about the government’s sugar tax.
By Ivan Morgan
Years ago, in the course of my job, I came across a briefing note written by very capable provincial government tax people explaining why a sugar tax on soda and other sugary drinks probably wouldn’t work.
I recently looked for it. It’s disappeared from government sites but, knowing them as I do, I had saved my own copy.
It’s four pages typed, in point form, and great reading if you like that sort of thing. It is well reasoned, well researched, in plain language and easy to understand. I know the folks who wrote it, and we are lucky they work for us. The note points out a sugar tax on soda probably wouldn’t achieve the goals it was supposed to.
I’ll spare you the details, but the tax experts note too much sugar is bad for you and in this province too many people consume too much sugar, especially in soda pop and other sugary drinks. It notes this province has a health care crisis in obesity, diabetes and other troubles related to poor diet.
They note the idea of the tax would be to recoup the financial strain on our public health care system caused by excessive sugar consumption. The tax would also dissuade folks from buying sugary drinks, by making them more expensive.
They then explain – in detail – why this won’t work.
What the clever people did not consider in their briefing note was the politics. The tax is useful inasmuch as it makes government look like it’s doing something about the health of Newfoundlanders, without actually having to do something about the health of Newfoundlanders. Just like they are doing with our power bills (absolutely nothing besides using our tax dollars to lessen the impact on us.)
We learned recently in its first year the tax brought in $11 million, which is a pittance – 0.27 percent of the province’s 2024 health budget. How much of that was spent on administration? Advertising? Government says it can’t (or won’t) say if the tax is working. I am willing to bet it isn’t.
Most people today need to watch every penny. A twenty-cent tax on a litre of pop adds up (especially on top of 15 per cent HST). Maybe the tax will convince folks to do without – not very likely. I volunteer for a low-income pet food bank once or twice a week. My clients watch every cent, but many drink cola. You can be judgy and self-righteous and say they shouldn’t do those things. But here’s the thing. They are going to. All this tax does is make their lives just that little bit harder. Just like the housing crunch. Just like the skyrocketing power bills. Or outrageous food prices. Or all the other things government is doing precious little about.
The only difference here is government could help. They could cancel this tax. They wouldn’t be out much (if anything) and it would make a difference. To do that they’d have to admit they didn’t listen to their own experts, and that they were wrong.
Health activists will howl in outrage at this idea – that’s what they do. This province has high rates of obesity, diabetes, heart disease and other health care problems linked to poor eating habits. I am all about figuring out how to reverse this trend. Punishing people financially doesn’t help.
Here’s how I see it. Low-income people are less likely to vote or donate to political parties. This tax provides a talking point for government to say to educated middle class people, who do vote and donate, “Look, we are doing something,” when they are doing little or nothing and they know it.
If you hear a government politician lauding this tax, know the difference.
The sugar tax is one of the more cynical policies of a government out of answers, out of ideas and frankly, out of steam. What keeps them going, I am sad to report, is the Opposition is worse.
Ivan Morgan can be reached at ivan.morgan@gmail.com