With 66% of Canadian adults and 33% of Canadian children now categorized as overweight or obese, it’s easy to see that it has obesity has become a real problem. The cause and prevention of obesity is a hot topic issue in most of the developed world, and Canada in no exception. A senate committee, along with the Canadian Diabetes Association is urging Canada to implement a tax on sugar-sweetened beverages to fight type 2 diabetes and improve the health of Canadians. These beverages include non-diet pop, sweetened iced teas, sports drinks, energy drinks, fruit-flavoured drinks (such as fruit punch or vitamin waters) and blended coffee drinks. Basically, beverages that are nutrient poor and contain large amounts of added sugar.1
In addition to the proposed taxation on sugar sweetened beverages, the Senate committee has made 21 recommendations to combat growing obesity rates in Canada, including:
- Making healthier food choices more accessible and affordable to the consumer
- An overhaul of the Canada Food Guide that promotes fresh, whole foods front and centre and that highlights the dangers of processed foods
- A ban on advertising foods/beverages to children (modeled on a similar ban already in place in Quebec)
- A national campaign to combat obesity, including more funding to ParticipACTION to better encourage exercise and healthy living
- Working with doctors to encourage giving prescriptions for exercise and proper diet
Although all of these ideas seem like steps in the right direction, there is quite the divide in the debate over implementing “The Sugar Tax”. On one side, the Canadian Diabetes Association, along with many other health professionals are saying that it is a positive step in the prevention of obesity and diabetes. Others are arguing that the proposed tax won’t make any significant change to Canadians with already formed habits in regards to sugary drink consumption.
Patrick Luciana, the co-author of XXL: Obesity and the Limits of Shame, is one of those critics. He says that quite frankly taxation to address obesity will not work. Case and point: Mexico.
Although Canada and the United States have obvious sugar consumption problems, Mexico is in a league of their own. Compared to the 70 litres per capita the average Canadian drinks yearly, the average Mexican drinks 163 litres, more than double! In January 2014 advocates of a sugar tax in Mexico got their wish and a 10% sugar tax was implemented in their country. Unfortunately, follow-up studies have shown that it was not making the significant change that they had expected.
While the sales of sugary soft drinks did fall by 6% in 2014, the sales of non-taxed alternatives such as fruit juices (which can often contain the same if not more sugar than soda) and dairy products rose by 4%. This is no surprise – tax one product and consumption of its substitutes goes up, leaving the number of calories consumed pretty much the same. And wasn’t the objective of the tax to reduce calories?
In addition to this, the study also failed to take into account other factors besides the tax hike, such as slow economic growth and changing consumer behaviour.
So, not only was the tax sold on the basis that it would reduce overall obesity rates, which is nowhere proven in the study, but that it was a way to bring down the high levels of Type 2 diabetes in the country. On that claim, the study is completely silent because there is no way to show that the tax has any impact on curbing diabetes.2
Jim Goetz, president of the Canadian Beverage Association disputes that “Evidence shows that education, not increased grocery cart taxes, is the key to improving public health, and the beverage industry has strong programs that support calorie awareness”3. Health Canada already requires companies to provide clear food labelling requirements, which includes a nutrition facts panel and principle display panel labelling. In fact, the CBA voluntarily also provides a clear calorie label on the front of their products above and beyond these requirements to help consumers make educated purchasing choices.
What is the answer then? If sugar taxation alone won’t make a significant difference to consumers, what will?
In a recent paper, health economist John Cawley reports “Overall, the evidence suggests that there is no single dominant economic cause of obesity; a wide variety of factors may contribute a modest amount to the risk. There is consistent evidence regarding the economic consequences of obesity, which are lower wages and higher medical care costs that impose negative externalities through health insurance. Studies of economic approaches to preventing obesity, such as menu labeling, taxes on energy-dense foods, and financial rewards for weight loss find only modest effects on weight and thus a range of policies may be necessary to have a substantial effect on the prevalence of obesity.”4
So, in the end, how much impact would a sugar tax have on the health of Canadians? One can argue that it is a step in the right direction, and it would prompt Canadians to further consider their purchasing habits when it comes to sugary foods and soft drinks. One can also rebut that research has proven taxation alone cannot be a magic bullet and an education based plan with many contributing factors is necessary to combat the issue.
You can read the report done by the senate here.
What is your opinion on the issue? Comment below to join the discussion.
- Why a sugar-sweetened beverage tax will help prevent type 2 diabetes. The Canadian Diabetes Association. September 2015. https://www.diabetes.ca/newsroom/search-news/why-a-sugar-sweetened-beverage-tax-will-help
2. Luciana, Patrick. What Canada can learn from Mexico’s sugar tax: It’s no panacea for obesity. The Globe and Mail. January 2016. http://www.theglobeandmail.com/report-on-business/rob-commentary/what-canada-can-learn-from-mexicos-sugar-tax-its-no-panacea-for-obesity/article28233833/
3. Education not ‘sugar tax’ the key to improving public health, Canada Beverage Association says. Canadian Manufacturing. September 2015. http://www.canadianmanufacturing.com/manufacturing/education-not-sugar-tax-the-key-to-improving-public-health-canada-beverage-association-says-153874/
4. Cawley, John. An economy of scales: A selective review of obesity’s economic causes, consequences, and solutions. Journal of Health Economics, Volume 43, 244-268. September 2015.
