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A Critical Review Exploring Taxation on Sugar-Sweetened Beverages As a Strategy to Address Obesity in Canada

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A Critical Review Exploring Taxation on Sugar-Sweetened Beverages As a Strategy to Address Obesity in Canada Journal of the HEIA Vol. 26, No. 1, 2020 A critical review exploring taxation on sugar-sweetened beverages as a strategy to address obesity in Canada Alyssa Ramuscak This is the joint winning paper in the graduate category of the Dr Elisabeth Feniak Award for Excellence in Technical Writing 2019 presented by the Canadian Home Economics Foundation. Abstract such as cardiovascular disease, diabetes and Canada’s growing obesity epidemic has the certain cancers, and places individuals at a potential to threaten the sustainability of our greater risk of premature death (Niebylski et al., economy and healthcare system (Niebylski et al., 2015; PHAC & CIHI, 2011). In 2008, obesity 2015). Currently, one in four Canadian adults are cost the Canadian economy $4.6 billion and this obese, placing them at a higher risk of chronic cost is projected to continue to grow (PHAC & diseases and premature death (Navaneelan & CIHI, 2011). If no proactive measures are taken Janz, 2014). To address this growing issue, to address the obesity epidemic, obesity has the the World Health Organization (WHO) potential to threaten global economies and the recommends using national-level strategies to sustainability of healthcare systems (Niebylski et combat obesity. Specifically, WHO has outlined al., 2015). that these strategies should include economic tools such as taxes to promote the consumption Taxation of unhealthy foods—for example, of healthier foods and beverages (Veerman et sugar-sweetened beverages (SSBs)—has been al., 2016). Currently, 40 countries and several recommended by several health organisations as jurisdictions in the United States (US) have a viable national-level strategy to address obesity (Veerman et al., 2016). Price greatly influences implemented taxes on sugar-sweetened beverages consumers’ food choices and, in turn, their (SSBs) (Falbe, 2019). Despite the growing interest overall diet. Implementing an SSBs tax aims in an SSBs tax to address obesity, there is no to change consumers’ purchasing habits and to Canadian policy related to such a tax. This encourage healthier choices (Mytton et al., 2012). critical review will further examine the benefits Currently, 40 countries and several jurisdictions and drawbacks of taxing SSBs and will draw on of the US have proposed and implemented the evidence to propose policy recommendations SSBs tax policies. These policies have met with that may help to overcome Canada’s obesity success in areas like Berkeley, California, and problem. Mexico (Falbe, 2019) (see Table 1 on pages 22–23 for examples of SSBs tax policies). Despite Keywords: obesity, sugar-sweetened beverages, growing interest and recommendations by health taxation, excise tax organisations, Canada has no federal SSBs tax policy. Due to the lack of federal leadership, several Introduction regions have considered using economic tools to Obesity is a growing public health problem combat obesity. Most recently, the Government that affects over 300 million people worldwide of the Northwest Territories announced their (Buhler et al., 2013; Cabrera Escobar et al., 2013; commitment to exploring an SSBs tax policy in Contact details: Public Health Agency of Canada, & Canadian their 2017/18 budget (Government of Northwest Alyssa Ramuscak Institute for Health Information [PHAC & Territories, 2019). T: (647) 381-0611 CIHI], 2011). Within Canada, it is estimated E: [email protected] that one in four adults or about 6.3 million In this critical review, the link between SSBs and individuals (as of 2011–2012) are obese, a statistic poor health outcomes will be addressed as well that has nearly tripled over the past three decades as the current consumption patterns of sugary (Navaneelan & Janz, 2014). Obesity is also a drinks in Canada, and the benefits and potential major risk factor for non-communicable diseases challenges of taxing SSBs. From the review of 18 A critical review exploring taxation on sugar-sweetened beverages as a strategy to address obesity in Canada the literature, several policy recommendations Consumption of sugar-sweetened within a Canadian context will be proposed. For beverages in Canada the purpose of this paper, SSBs will be defined Global consumption of SSBs has increased as any ‘soda sweetened with sugar, corn syrup or over recent decades (Brownell et al., 2009). other caloric sweeteners and other [sweetened] In Canada, the ready availability of SSBs has carbonated and uncarbonated drinks such as resulted in increased consumption by all age sports drinks and energy drinks’ (Buhler et al., groups, with an estimated 13.1 billion litres 2013). being sold in 2010 (Buhler et al., 2013). In a calculation performed by Buhler and colleagues Literature review (2013) using industry data, it was found that Sugar-sweetened beverages and Canadians are purchasing an equivalent of more connection to health outcomes than one litre a day, per person, per year. The association between regular consumption of SSBs have also become one of the major sources SSBs and weight gain has been well documented of sugar in the Canadian diet. In fact, as (Backholer et al., 2016; Basu et al., 2014; purported by Langlois et al. (2019), if sugary Brownell et al., 2009, Cabrera Escobar et al., beverages—regular soft drinks, milk (containing 2013; Langlois et al., 2019). In fact, it has free sugars), juice, fruit drinks, energy drinks, been estimated that worldwide over 180 000 plant-based beverages (containing free sugars), deaths per year can be directly associated with and tea and coffee (containing free sugars)— the consumption of SSBs (Backholer et al., were combined together into one category, they 2016). SSBs have also been indirectly linked would be the top source of sugars for all age to obesity-related problems, such as high blood groups of the Canadian population. pressure, elevated cholesterol and triglyceride levels, coronary heart disease, diabetes, Price disparities among healthier beverage joint problems, and several cancers, such as options may also explain these high consumption oesophageal, pancreatic, colorectal, breast, patterns. In a price analysis that compared milk endometrial, prostate and kidney cancer (Basu to soft drinks over 17 years, it was found that et al., 2014; Brownell et al., 2009; Buhler et The World Health the average price of one litre of 2% (reduced-fat) al., 2013). Even more concerning is the strong milk had increased by 75%, whereas the price of Organization association between the consumption of SSBs 2 litres of soft drink had only increased by 26% and non-alcoholic fatty-liver disease. In fact, (Buhler et al., 2013). recommends that high consumption of SSBs is considered to be countries take one of the predictors of the disease (Buhler et Given the increased consumption of SSBs and its al., 2013). connection to poorer health outcomes, imposing national-level an SSBs tax policy may be a plausible action to SSBs lack nutritional value and do not support address Canada’s growing obesity problem. approaches to healthy diets (Backholer et al., 2016). A possible address obesity, explanation for the relationship between SSBs, Sugar-sweetened beverages taxation and obesity and obesity-related conditions may potential positive effects such as taxation to be that these liquid calories (kilojoules) are Imposing taxes on food and beverages like SSBs exclusively derived from refined carbohydrates encourage healthier has been identified as a powerful economic tool like simple sugars (Brownell et al., 2009; Buhler to improve the diets of individuals. The World choices et al., 2013). Evidence suggests that individuals Health Organization recommends that countries do not compensate for the energy they consume take national-level approaches to address obesity, in liquid form, in part due to the poor satiating such as taxation to encourage healthier choices properties of sugary drinks (Brownell et al., (Veerman et al., 2016). Evidence suggests 2009; Buhler et al., 2013). For example, in one that an SSBs tax is an effective means of study that observed the SSBs consumption of changing purchasing habits, improving health school-aged children, it was found that children outcomes, and has added benefits like funding who drank nine ounces (~266 mL) or more of complementary health-promotion programs sugary beverages per day (equivalent to ¾ can (Niebylski et al., 2015). of a regular soft drink or more) consumed 200 kcal (836.8 kJ) more than children who did not In a study by Jones et al. (2017) that examined drink SSBs (Brownell et al., 2009). Despite the the health and economic impact of implementing growing evidence linking SSBs to poor health a 20% SSBs excise tax, it was found that over 25 outcomes, Canadians continue to consume an years close to half a million cases of obesity unhealthy amount of SSBs each year. could be prevented in Canada, resulting in an 19 Journal of the HEIA Vol. 26, No. 1, 2020 estimated $7.4 billion savings in direct healthcare excise tax in 2014 (Backholer et al., 2016; Colchero costs. Similarly, other modelling studies have et al., 2017). Most notably, two years after the projected reduced obesity rates for countries policy was implemented, it was found that SSBs like the US and the United Kingdom, where purchases were down by 9.7%, compared with imposition of a 20% excise tax could result the 5.5% decrease observed after the first year in 3.5% and 1.3% reductions in obesity rates, (Colchero et al., 2017). Findings from Colchero respectively (Mytton et al., 2012; Veerman et and colleagues’ (2017) study also discovered that al., 2016). In addition to reduced obesity rates, households at all three socioeconomic levels had countries may also experience a reduction in reduced their purchases of taxed beverages in chronic diseases. For example, in Canada, it 2015, with the greatest reduction being observed has been projected that taxation on SSBs could among households with the lowest socioeconomic also prevent 12 053 cancer cases, 36 996 cases of status. Similar to the situation for Berkeley, the ischemic heart disease, 4833 strokes and 138 635 revenues generated from Mexico’s SSBs tax were cases of type 2 diabetes (Jones et al., 2017).
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