The Ontario Medical Association (OMA)
renewed their call recently for extreme measures to
battle obesity. If the OMA had it their way, Ontarians would be paying a fat and sugar tax on all foods they deem ‘unhealthy.’ We fortunately know from the experience in Denmark what would happen if fat taxes were implemented in Ontario. In 2011, Denmark introduced a fat tax aimed to reduce the consumption of ‘unhealthy’ foods, improve general health, and to be used as a revenue tool to fund a financially strapped government. The tax did accomplish its goal of raising revenue, but the unintended consequences led to its near unanimous abolishment by the Danish Parliament.
According to Jens Klarskov, head of the Danish Chamber of Commerce, the tax was very difficult to administer and calculate, in fact, “very bright Danish government officials spent a year-and-a-half trying to figure out how to bring the fat tax into the real world.” Bureaucrats were perplexed with having to determine how to apply the tax to the world of complex food products.
Klarskov points out that it was then the responsibility of each store or producer to calculate these fat taxes, forcing them to spend hours, and millions of dollars trying to figure out how much to charge consumers and how much they owed the government.
Red tape was only the beginning of the economic nightmare caused by the fat tax. Indeed, Danes stopped buying unhealthy foods in Denmark, but not because they stopped eating them. The tax drove Danish consumers across the German border to buy their groceries. German stores began sending flyers, translated into Danish, proclaiming “No fat tax here!” And it worked –
Chamber of Commerce polls found that up to 50 per cent of Danes were cross-border shopping. The same polls showed that 70 per cent thought the tax was ‘bad’ or ‘very bad’ and 80 per cent of respondents claimed it did not persuade them to buy healthier food.
Even if the punitive food taxes had worked to their intended purpose of reducing caloric intake, the actual affects do not lead to decreases in obesity. A Yale University
study evaluated the impact of soft drink taxes on the Body Mass Index of obese people, and found the result was negligible, with an average long-term BMI decline from 40 to 39.98.
According to Klarskov, Danish health experts only pegged the health benefits of their fat tax (had it lasted ten years) at extending life expectancy by five-and-a-half days.
What we do know is that a disproportionate amount of unhealthy food is consumed by low-income individuals – single mothers grabbing a quick, cheap meal as they run between jobs. The last thing these folks need is more money taken out of their pockets, leaving less to spend on fruits, vegetables, and recreational activities.
Fat taxes fall flat for a variety of reasons. They are difficult to implement and administer. They do not work in dissuading unhealthy eating habits or changing obesity levels, and they are unfair to the least well off in our society. These policies will not lead to a healthier country, but instead to higher food prices and a healthy expansion of government bureaucracy. As was the case in Denmark, good intentions often lead to bad policy. In our case, it would not lead to slimmer waistlines in Ontario, only thinner wallets.
Candice Malcom, Ontario Director, CTF
