University of Alberta research has shown that implementing a sugar tax would decrease some public health related concerns, but produce adverse economic circumstances for some low-income earners.
Conducted on behalf of the Heart and Stroke Foundation, a U of A research project tries to predict the economic and health outcomes of a sugar tax over a twenty-five year period. The study, which will be published next year, was led by U of A master’s student Kai Erth Kao and co-authored by Arto Ohinmaa and Amanda Jones. Mike Paulden, an assistant professor at the School of Public Health with a background in health economics, was a corresponding author.
Similar to taxes on alcohol and tobacco, a sugar tax tries to reduce the consumption of sugary drinks by levying an additional fee on products containing large amounts of sugar. Companies producing soda, sports, and energy drinks would be affected. While the federal government committed to not implementing one, the debate continues between stakeholders and industry.
For her research, Kao took an existing mathematical model that observed the relationship between a sugar tax and long-term health effects. Using this model, she stratified five different socio-economic groups and examined the financial and health outcomes of implementing a sugar tax. She found that putting a 20 per cent tax on sugary drinks could greatly improve Canadian health.
Paulden said there were a number of benefits which would arise if a sugar tax would be implemented in Canada. These include:
- over 400,000 fewer obese Canadians;
- 5,000 cases of type II diabetes would be prevented per year;
- prevention of more than 15,000 cancer cases;
- 5,000 less strokes; and
- 40,000 fewer cases of glycemic heart disease.
According to Kao’s research, out of the five socio-economic groups studied, the poorest group would reduce their consumption of sugary drinks the most compared to groups with higher incomes. However, a sugar tax would be also be considered financially regressive because it would disproportionately affect lower income households.
“Around 0.23 per cent of [poor households’] income would go to this tax, whereas for the rich, it would be 0.04 per cent of their income,” Paulden said. “So, about one-fifth of the proportion of their income would be spent on the tax.”
According to Paulden, there may be a solution to amend this issue, but it relies on political leadership, not public health or economics.
“If [the federal government] were to use the [sugar tax] revenue to provide subsidized healthy food to those low income households, it might no longer be financially regressive,” he explained.
For Paulden, the question of whether the sugar tax is worth implementing is a complex issue.
“A lot of the health benefits [of a sugar tax] are downstream,” he said. “These health benefits don’t occur today or tomorrow; it would be many years from now.”
“It depends on whether you think it’s worth paying $40 per person to save all of these thousands of cases of diabetes, cancers, strokes, and heart disease many years in the future. There isn’t a yes or no answer to that.”