Federal government investigated soda tax on sugary drinks

The federal government has weighed the pros and cons ofa financial deterrent aimed at shrinking bulging waistlines: a taxon soda pop.

Finance Minister Bill Morneau's office requested an internalanalysis last winter to explore the "issues and impacts in respectof a potential tax on soft drinks."

The information was contained in a Jan. 29 briefing note prepared for Morneau as he drew up the Liberal government's maiden budget,which was tabled in March.

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"A number of health organizations have called on the governmentto implement taxes on sugar-sweetened beverages (SSBs), as astrategy to address obesity," reads the memo signed by deputyfinance minister Paul Rochon.

The partially redacted, "secret" briefing was obtained by TheCanadian Press under the Access to Information Act.

As an example, the document pointed to a pre-budgetrecommendation made by the Heart and Stroke Foundation, which urgedOttawa to impose a tax of five cents per 100 millilitres onsugar-sweetened beverages.

The Heart and Stroke Foundation told Ottawa that such a levywould be a sustainable source of tax revenue that would generate$1.8 billion every year for the public treasury.

In Morneau's spring budget, the Liberal government pledged tohelp "families make better food choices" and indicated it wouldtake steps during 2016-17 to add more details on food labels aboutadded sugars and artificial dyes in processed products.

The budget made no mention of imposing taxes on sugary or fattyfoods and beverages.

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Asked about the analysis, a spokeswoman for Morneau said it wasrequested during the pre-budget period when the finance minister'soffice was in exploratory mode and had a responsibility to examineoptions and proposals.

"This (is) an issue that was raised in the pre-budgetconsultation period by several stakeholders both for and against and we asked for an analysis in order to better understand it,"Annie Donolo said in an email.

"We encourage anyone with a point of view to engage with us.It's an important subject with many facets, and we expect it willcome up again as we hear from people ahead of the next year'sbudget."

The push to tax sugar-filled beverages has gained momentum inrecent months.

In its pre-budget submission, the Heart and Stroke Foundationsaid health experts have described sugary drinks as a "significantdriver of chronic disease and obesity." It also insisted thattaxing sugary drinks has cut down on consumption in somejurisdictions.

In March, a Senate committee released a report about fightingobesity that recommended Ottawa explore the possibility ofimplementing a new tax on sugar-sweetened and artificially-sweetenedbeverages.

Citing the Senate report, members of the Green party voted lastweekend in support of a resolution that stated a Green governmentwould introduce a tax on these sweetened drinks.

"It make sense in public policy because it is a burden on ourhealth-care system so, if you want to look at dollars and cents itmakes sense financially," Green leader Elizabeth May said beforethe vote.

However, the Canadian Beverage Association has opposed any planto tax sugar-sweetened and artificially sweetened drinks.

The association, which represents 60,000 workers in the industry,has said that efforts to tax these products have proven ineffectivein reducing consumption in other jurisdictions. It also warned itwould increase the cost of groceries.

"It is important to note that obesity has continued to risesteadily over the past 20 years, while consumption of
sugar-sweetened beverages and beverage calories overall, has beendeclining over the same period," the association said in a Marchstatement in response to the Senate report.

The analysis portion of Morneau's document was largely blackedout, though it did note that other governments have introducedvarious taxes on soda, fat and sugar "with differing results."

Indeed, the idea of taxing unhealthy grub and drinks is far fromnew.

The memo listed some examples, including targeted taxes imposedon specific products to improve nutrition.

Among them, it said Denmark's government repealed its 15-monthold "fat tax" in 2012 and announced it wouldabandon a proposal totax sugar out of concerns they would hurt low-income earners.

Denmark also repealed its decades-old tax on soft drinks in 2013.\

The document listed more-recent examples in Mexico and Berkeley,Calif., where governments have taxed unhealthy foods and drinks.

Morneau's note also highlighted a 2013 plan in New York City toimpose a 16-ounce size limit on bottled and fountain drinks thatwere sold at places like restaurants, corner stores, sports venuesand movie theatres.

The document noted that the ban never came into effect because itwas overturned by the courts.