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Jeffrey Simpson

How to sweeten this tax: It will help fight obesity

Jeffrey Simpson | Columnist profile | E-mail
From Saturday's Globe and Mail

Medical and public health professionals across Canada can see it coming. It will kill more people, hit children and adults alike, and cost the already overburdened health-care system plenty. Last year, Ontario announced a $741-million, four-year, strategy to combat it.

The prevalence of diabetes, you see, is growing fast, and will grow still faster as the population ages - and gets fatter. Being overweight - and certainly being obese - heightens the likelihood of diabetes. In Ontario, the number of diabetes cases grew 69 per cent in the last decade. About 300,000 more Ontarians are expected to be diagnosed by 2010.

No silver bullet can be aimed against the forthcoming epidemic. Rather, a whole range of policies - from publicity to healthier eating, to more exercise, to less income inequality - is required.

So might be taxing drinking beverages that lead to being overweight.

The example of tobacco is instructive. Increased taxes by no means explain all of the decline in smoking rates, such that only about 18 per cent of Canadians now smoke. But higher taxes did help, as one of a series of measures after governments decided to fight against smoking.

We should now consider doing the same thing for sugary drinks, especially sodas, since we do know that obesity is linked to diabetes, and that these drinks are a contributing factor, albeit only one, to the obesity challenge.

Talking about this issue is not on the Canadian political stage; indeed the 2008 Ontario diabetes policy didn't mention it. But the issue has appeared on the U.S. stage, although not at its centre.

This week, the U.S. Senate finance committee heard testimony from the Center for Science in the Public Interest that recommended a 3-cent-tax per sugary drink that would produce $24-billion over four years. (The numbers came from the non-partisan Congressional Budget Office.)

California, writhing under an unsupportable $42-billion deficit, is going to consider a tax on sugary drinks. Who knows if it will pass? A handful of states already have such taxes, although a proposal in New York for a big 18-per-cent tax was withdrawn in the face of public opposition and fierce lobbying from the soft drink industry.

A recent article in the New England Journal of Medicine suggested a one-cent an-ounce tax. The authors cited one study that purported to demonstrate that for every 10 per cent increase in price, consumption tumbled by 8 per cent. “For each extra can or glass of sugared beverages consumed per day, the likelihood of a child becoming obese increases by 60 per cent,” the authors wrote.

The study attracted more interest than usual because President Barack Obama recently appointed one of its authors, Thomas Frieden, health commissioner of New York City, as head of the Centers for Disease Control and Prevention.

Using taxes to influence behaviour is a favoured approach of Prime Minister Stephen Harper. His government has fiddled endlessly with the tax code, embedding in it little tax incentives for certain kinds of behaviour.

These have been tax decreases, however, not tax increases, as are being suggested by U.S. proponents.

The last time federally anyone suggested a tax increase in Canada - on carbon, to be offset by lower personal and corporate income taxes - the Harperites went politically berserk. The tax's proponent, former Liberal leader Stéphane Dion, got thumped. Any government to try a tax on sugary drinks would likely be a provincial one.

U.S. critics complain a tax on sugary drinks a) won't influence behaviour, b) represents the hated “nanny state,” c) represents a “tax grab,” the money from which will be wasted, d) does not answer who will decide what is “sugary” e) and will encourage the “nanny state” to go after ice cream, candy and other foods with plenty of sugar. The slippery slope beckons, they claim.

To these predictable objections, the soft drink industry adds a rather disingenuous one: that such a tax would disproportionately hurt low-income people. That big soft-drink companies should be wrapping their interests around those of the poor shows again that politics makes strange bedfellows. These companies make lots of low- or non-sugary drinks that would be exempted, of course, from any tax.

The American Beverage Association, representing the soft drink companies, says it is working to reduce consumption in schools, and that there are far better ways to attack obesity.

The ABA is right that there are many ways to attack obesity. That other ways exist does not disqualify a tax as one tool among many. Alone, yes, such a tax would of limited use. What if the money raised were put directly into other kinds of policies to combat obesity, or the effects of obesity, including diabetes?