PETER SHAWN TAYLOR
Canadian Taxpayers Federation
Across the country various health care organizations and lobby groups are demanding new taxes on the things Canadians choose to eat and drink.
The Ontario Medical Association, Canadian Cancer Society, Heart & Stroke Foundation, Alberta Coalition for Chronic Disease Prevention and Quebec’s Coalition Poids have all called for new government levies on ‘unhealthy foods.’
While these groups claim to have the best interests of Canadians at heart, their policy prescriptions are flat out wrong. Taxing food is fiscal malpractice.
To understand why food and drink taxes will not make Canadians healthier or thinner, consider more closely a soda tax, the most common suggestion from food tax advocates.
Despite the intuitive appeal that drinking sugary soda makes people fat − and taxing it will cause them to drink less and lose weight − obesity is the result of many complex social, environmental and biological factors. It’s naive to blame a single product.
For starters, soda isn’t nearly as popular as coffee, water or milk in Canada. Soft drinks only make up 2.5 percent of all calories consumed by the average Canadian adult.
Numerous scientific studies reveal no link whatsoever between the amount of soda consumed and weight gain or loss, particularly among children. A 2009 article in the American Journal of Clinical Nutrition found “no association between sugar-sweetened beverage consumption, juice consumption, and adolescent weight gain.” The same result was found in a study of 137,000 children across 34 countries funded by Health Canada.
Further, taxing soft drinks inevitably causes consumers to make substitutions in their diet, choosing cheaper products that may be equally (or more) unhealthy. Using data from U.S. states that currently tax soda, researchers at Yale found a one percent increase in soda tax rates caused adolescent soft drink consumption to fall by a small amount, as might be expected. At the same time, however, the consumption of other calorie-laden drinks such as milk and juice rose. Net calories consumed stayed constant.
The same result holds true for other food taxes. A snack food tax covering potato chips, cheezies and popcorn in Maine had no impact on the weight of state residents. And in Australia a 2011 research project that swapped out children’s milk, cheese, yogurt and ice cream with low-fat versions resulted in no overall weight loss as the kids sought extra calories from non-dairy sources. Human behaviour inevitably confounds government efforts to control diet via taxes.
It’s worth noting that some of the studies mentioned above found gym class, television viewing and eating dinner with one’s family were far more significant factors in adolescent weight gain than the price of cola or ice cream.
Beyond the inability of taxes to fight obesity, food taxes unfairly punish the most vulnerable Canadians. Fresh fruits, vegetables and other ‘healthy’ foods can be expensive and for this reason many low-income Canadians rationally choose to spend their limited food dollars on meals that deliver a lot of calories cheaply and efficiently. Taxing fast food, for example, would have a disproportionate impact on poor Canadians.
Finally, food taxes of all kind are enormously unpopular. Around the world, voters consistently oppose the idea that governments should tell them what to eat.
In 2011, Denmark became the first country in the world to enact a tax on the fat content of all foods. This tax was arbitrary, confusing and dangerous to the economy, as Danes increasingly did their food shopping across the border in Germany, which does not tax fat. In the face of vociferous public opposition, last year Denmark became the first country to repeal a fat tax.
Here at home, an exclusive Harris-Decima poll of more than 1,000 Canadians for the Canadian Taxpayers Federation revealed 65 percent of respondents disagree with the statement “it is a proper role of government to tax some foods and not others.”
Despite widespread public opposition, why are food taxes still on the political radar? It might be the vast sums they could raise for government. According to Quebec’s Coalition Poids, a 5¢ per litre soda tax would raise $40 million annually in that province. Scaling this across Canada suggests a $170 million annual haul. A penny-per-ounce tax, as has been suggested by politicians in the U.S. and Canada, could raise over $1 billion a year in this country.
Food taxes do not affect obesity rates, they disproportionately hurt lower-income Canadians and they represent a massive new government revenue grab and intrusion into personal choice. Let’s take food taxes off the table once and for all.