Sugary drink tax coming next September, says finance minister

The Newfoundland and Labrador government plans to implement a tax on sugar-sweetened beverages next year, Finance Minister Siobhan Coady announced Tuesday.

The new tax is expected to raise about $9 million annually, though Coady framed the new tax as a way for the government to encourage healthy choices.

“Our goal is to encourage residents to switch to healthier beverage choices, resulting in long-term health gains for our province,” she said at a media briefing Tuesday.

Announced in the 2021 provincial budget, the new tax will be 20 cents per litre and, if the legislation is passed, will come into effect Sept. 1, 2022.

Coady said the tax is not meant to affect distributors or businesses and is supported by health organizations, including the Canadian Cancer Society.

The tax will apply to many ready-to-drink, concentrated and dispensed beverages.

Those beverages include bottled soda, sports and energy drinks, fruit-flavoured drinks, frozen concentrated juices, flavoured powders, syrups, soda fountain drinks and slushies.

There are some exceptions to the new tax, including diet beverages, 100 per cent natural fruit and vegetable juices, ingredients primarily used in cooking and beverages prepared for the consumer at the point of sale — at coffee shops, for example.

Alcoholic beverages, medical and therapeutic beverages, milk — including chocolate milk — and yogurt beverages, beverages in containers less than 75 millilitres and fortified plant-based drinks are also exempt from the tax.

The tax will be included in the shelf price to have the “greatest impact” on consumer decisions, said Coady.

In a statement following the briefing, PC opposition member Tony Wakeham called the tax “regressive,” saying it would harm low-income earners.

“We need to invest in health-care measures that can inform better consumer choices, not penalize those already struggling to make ends meet,” he said.

Wakeham also said he’s heard concerns from small-business owners who may be affected by the new tax.

Jerry Earle, president of the Newfoundland and Labrador Association of Public and Private Employees, said the tax is misguided and could hurt local workers. NAPE represents employees who work at Browning Harvey, a St. John’s beverage manufacturer for Pepsi Co.

“The results of implementing this sort of tax in other jurisdictions has been mixed at best,” he said. “Education, poverty and food insecurity reduction strategies, and tackling the root causes of inequality in our society would be a much better approach.”

CBC