New soda tax may not be enough to deter consumers: expert
VANCOUVER -- With the unveiling of the new provincial budget this week, British Columbians discovered they will soon be paying more for soft drinks.
Pop has, in the past, been exempt from provincial sales tax in B.C. - considered a grocery store essential. But the health effects of the sugary drinks have become clear in study after study, and Canadian health experts have been calling for more taxation for a long time.
“This has been a recommendation… for the last seven consecutive years,” a spokesperson for the Ministry of Finance told CTV News Vancouver in an emailed statement. “This is a step that health professionals have long supported.”
The seven per cent PST will be added to soda sales on July 1st of this year, and the provincial government is hoping it will be a deterrent to those who drink the most pop - teenagers between 14 and 18 years old.
But the chair of the Childhood Obesity Foundation says it may not be enough to actually change consumer habits.
“Sales taxes really aren’t evident until you’ve gone to the checkout and you’ve looked at your sales receipt, because you don’t see it on the sticker price on the shelf,” Dr. Tom Warshawski says, adding the real impact comes when you see a higher price tag.
“When the consumer goes to the shelf and they look at a sugary drink and they see - ‘Oh, this is $1.20 a litre,’ and then they look at the non-sugary drink and see that it’s $1 a litre, they’re nudged toward the healthier choice. The price sends an additional reminder that the healthier choice is the cheaper choice.”
He says while B.C. adding PST is a good first step, only a federal excise tax, which would show up on the price tag, would change buying habits.
“It really does shift behaviour. The evidence is very strong. When sugary drink taxes have been introduced in Mexico, France, Hungary, you see a shift in behaviour to purchasing the healthier choice,” Dr. Warshawski says. “B.C. doesn’t have the ability to do this, the federal government does, and that’s what we hope will be the next step.”
In the meantime, the provincial tax will apply to drinks in vending machines and soda fountains in fast food restaurants, in addition to pop purchased at the grocery store. And while it may not be enough to change British Columbians’ choice of beverage, it will bring in some money.
The Ministry of Finance says removing the exemption will bring in $27 million in the 2020/2021 fiscal year, even though it doesn’t go into effect until July.