sugar-sweetened beverage tax

Newfoundland and Labrador creates sugar-sweetened beverage tax

Newfoundland and Labrador’s Finance Minister has tabled Bill 29, which will create the first per-litre sugar-sweetened beverage tax in any Canadian province. 

The bill, a priority for the provincial government, is likely to pass during this fall session of the Legislature and would come into effect on September 1, 2022. 

The bill will introduce a sugar-sweetened beverage tax at $0.20 per litre.

The sugar-sweetened beverage tax will apply to all drinks with added sugars, including:

  • Regular soft drinks
  • Fruit-flavoured juices
  • Sports and energy drinks
  • Pre-packaged milkshakes and coffee beverages
  • Concentrated mixtures, such as frozen concentrated juices, flavoured powders, and syrups

It does not apply to the likes of beverages sweetened with non-caloric sweeteners, 100 per cent natural fruit and/or vegetable juices, alcohol, medical or therapeutic beverages, milk and fortified plant-based milks and yogurts, ingredients primarily intended to be used in cooking or food preparation, or drinks prepared for the consumer at the point of sale, such as tea and coffee. 

The ultimate aim is to help Newfoundland and Labrador become one of the healthiest provinces in Canada by 2031 by creating a culture that places greater emphasis on healthy living

“The average household in Newfoundland and Labrador spends an estimated 2.8 per cent of its total annual food and beverage expenditures on sugar-sweetened beverages. This is the highest in Canada, and twice the Canadian average of 1.4 per cent,” said Siobhan Coady, Deputy Premier and Minister of Finance. “Our goal is to encourage residents to switch to healthier beverages, resulting in long-term health gains for our province.”

The tax will be primarily collected at the wholesale level and passed through to retailers and ultimately customers as part of the overall price, similar to the current model for provincial tobacco and gasoline taxes. 

However, if a retailer purchases the sugar-sweetened beverage product directly from the manufacturer then the retailer would be responsible for collecting and remitting the tax. 

The Retail Council of Canada (RCC) indicated that if the tax were collected at the wholesale level, retailers could avoid costly changes to in-store point of sale (POS) systems for stores in Newfoundland and Labrador. 

The RCC has also asked the government to provide public education regarding the tax, which will not be shown on a customer’s POS receipt, so that customers do not mistakenly believe resultant price increases are a symptom of price gouging.

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