HALIFAX, NS: The Canadian Taxpayers Federation (CTF) is warning Canadians about a new report from the University of Waterloo released by a coalition organizations proposing a new tax on pop, saying it would be costly to Canadian families and useless since it would do nothing to make them healthier.
“Pop tax advocates seem to think that we can solve all our problems by simply raising taxes. It’s time for the Trudeau government to tell them they won’t create kooky new taxes like one on our pop,” said Kevin Lacey, Atlantic Director of the Canadian Taxpayers Federation.
The CTF says there are four reasons pop taxes won’t work in Canada.
1) The report ignores international examples where the pop and fat taxes have failed. For example, the report does not mention Denmark.
Denmark, which had a broad “fat tax” in place, as well as a pop tax, repealed the fat tax just one year after implementation, and ended the pop tax as well. The Danish government found it was too expensive to administer and did virtually nothing to make people healthier.
2) Pop consumption is already on the decline in Canada without a tax, and health problems persist: The numbers in the report back this assertion, between 2004 and 2015 non-diet pop sales (volume per capita) are down 27 per cent, overall consumption of surgery drinks are down per capita 13 per cent. Yet many of the health problems a pop tax is supposed to solve are increasing.
3) A pop tax would come with a big bureaucracy: This tax would require a new bureaucracy to manage the implementation and execution of the new tax. Further, the debate over what is a “sugary” drink would launch a massive lobbying effort by individual producers wishing to avoid the tax and its stigma. For example, some specialty coffees have as much sugar in them as pop. Do they get taxed or not?
“Do we really want lobbyists and government bureaucrats deciding what is healthy for us? Do we even think they can?” questioned Lacey. “Under a pop tax the taxpayer loses. The government just takes more and more of your money to fund more bureaucrats and administration.”
4) Pop taxes hurt low income families: According to the KANTAR World Panel report from 2014, 63.7 per cent of all Mexico pop taxes were collected from low-income families while 37.5 per cent of the taxes came from families in poverty.
In 2013, the CTF commissioned a study looking at the effectiveness (or lack thereof) of fat/sugar/pop taxes.
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