Canada Must Not Follow Mexico’s Lead On Food Taxes

By November 27, 2013Guest Columns, Hot Topic

By Gregory Thomas, CTF and Peter Shawn Taylor, CTF. The Canadian Taxpayers Federation (CTF) has released a new report that takes direct aim at Canadian groups who want Canada to adopt a Denmark-style fat tax or the sugar and ‘junk food’ tax recently implemented in Mexico.

The CTF report titled: Tax on the Menu: Why taxing food and drink won’t make Canadians thinner. But will make their governments much, much fatter looks at dozens of peer-reviewed academic studies plus ample real world evidence from around the globe proving food taxes of all kinds are entirely ineffective in reducing obesity.

“Mexico is about to find out what Denmark figured out a year ago, trying to tax your citizens to better health doesn’t work,” said CTF Federal Director Gregory Thomas. “Food taxes are fiscal malpractice.”

In Canada, food taxes have been supported by number of health organizations including the Ontario Medical Association, Coalition Poids in Quebec and the Alberta Coalition for Chronic Disease Prevention. Earlier this year the Quebec Minister of Health voiced his support for a penny-per-ounce tax on soft drinks.

And last month, Mexico introduced a peso-per-litre ($0.08 CDN) tax on soft drinks and an 5 per cent tax on ‘junk food.’ In 2011, Denmark introduced a $3 CDN tax on every kilogram of saturated fat. However, a year later the Danes repealed their fat tax. And in 2013, Denmark began the process of eliminating taxes on soda as well.

“Real world evidence and academic research data reveals that food taxes are entirely ineffective at producing weight loss in a population,” said report author Peter Shawn Taylor. “The complex social, biological and environmental factors behind obesity confound all attempts at imposing a diet through taxes. And contrary to the claims of most tax proponents, Canadians are living longer than ever.”

The CTF’s 38-page report details how food taxes are supposed to work in theory but repeatedly fail in practice due to confounding human behaviour. It also explains why such taxes are unfair to low-income Canadians who can least afford them and how food taxes threaten to create a massive new revenue stream for government. Finally, food taxes are deeply unpopular with voters everywhere.

A Harris-Decima poll of 1,000 Canadians conducted for the Canadian Taxpayers Federation shows 65 per cent of Canadian adults do not trust the government to determine which foods should be taxed. Only 28 per cent felt that there was a role for government in taxing certain foods.

“Canadians are extremely skeptical about allowing their governments to create a new food tax leviathan,” continued Thomas. “The only thing these taxes will shrink is the average Canadian’s wallet.”

You can download the CTF report here.

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