New research by the University of Waterloo commissioned by leading health organizations reveals an excise levy on companies that produce sugary drinks would go far in reducing death, disability, and health care costs. This adds to the growing body of international evidence that supports the health and economic benefits of a sugary drink levy.
This new research expands on a recent analysis that projected sugary drink consumption among Canadians and the resulting health and economic impacts, by estimating the benefit of a levy on sugary drinks. According to the study, over the next 25 years, a 20 per cent excise levy on the manufacturers of sugary drinks will result in more than 13,000 lives saved and will prevent:
- More than 600,000 cases of obesity and almost 100,000 cases of overweight among Canadian adults;
- Up to 200,000 cases of type 2 diabetes;
- More than 60,000 cases of ischemic heart disease;
- More than 20,000 cases of cancer; and
- More than 8,000 strokes.
In addition to reducing adverse health impacts, a 20 per cent levy over the next 25 years will account for $11.5 billion in health-care savings and government revenue of $43.6 billion ($1.7 billion per year). A direct benefit to Canadians’ health is also projected —with almost 500,000 disability-adjusted life years (number of healthy life years lost due to ill health, disability or early death) being prevented if a 20 per cent sugary drink levy was implemented by the federal government.
Recent experience from different countries shows that supporting healthy choices through directed taxes helps decrease consumption of unhealthy products and improves overall health. An example close to home is Canada’s experience around tobacco use. Male lung cancer incidence rates have declined since the 1980s. Changes including modifying package labels, increasing public education, higher taxes, restrictions on advertising and other approaches—all contributed to dramatically decreasing the number of smokers in Canada to an all-time low of 18 per cent, down from 50 per cent in 1956. A growing collection of studies also shows that a levy on sugary beverages decreases consumption. Examples of successful implementation of sugary drink levies are found in Mexico, France, Hungary, Finland, Norway, Belgium, Chile, Barbados, and an expanding list of jurisdictions in the United States (i.e. Berkeley and Philadelphia) among others. In Mexico, purchases of taxed beverages have decreased over two consecutive years and purchases of healthy beverages are up.
A number of health organizations have proposed an excise levy on sugary drinks to the federal government for consideration in the upcoming federal budget. This approach would raise revenue for much needed healthy living initiatives that will benefit the health of Canadians. These include subsidizing vegetables and fruit to make them more affordable for Canadian families; ensuring access to safe drinking water and plain low fat milk in Indigenous communities; providing healthy school lunch programs for Canadian students; introducing public education and awareness including food literacy and skills; and implementing physical activity programs. This call-to-action to introduce a manufacturer’s levy on sugary drinks is endorsed by 24 organizations nationwide.
The health groups emphasize that a levy is not the only solution to the issue of excess weight and the overall health of Canadians. However, given Canadians are drinking an unhealthy amount of sugary drinks, which are the single greatest contributor of sugar in our diets—and a significant driver of chronic disease and obesity, a levy is a critical component of a broader strategy to promote healthy eating and drinking. This includes restricting marketing to kids, improving food and menu labeling, providing better access to affordable healthy foods and water, increasing food literacy and preparation skills, as well as public education.
Both phases of this research were commissioned by the Canadian Cancer Society, Childhood Obesity Foundation, Chronic Disease Prevention Alliance of Canada, Diabetes Canada and Heart & Stroke. The research was carried out at the University of Waterloo by Amanda C. Jones, Dr. J. Lennert Veerman and Dr. David Hammond.
“A Canadian tax on sugary drinks has the potential to reduce the prevalence of obesity and to improve the health of Canadians, while providing substantial revenue to support other public health measures."
– Dr. David Hammond, Associate Professor, School of Public Health & Health Systems, University of Waterloo
“The number of overall cancer cases diagnosed in Canada is expected to rise dramatically over the next 15 years alone due to a growing and aging population. Actions, including a levy on sugary drinks, to reduce the number of people getting cancer and lower the costs of treating this disease need to start now.”
- Robert Nuttall, Assistant Director, Health Policy, Canadian Cancer Society
"Excessive sugary drink consumption costs Canadians hundreds of millions of dollars each year and is killing thousands. It is time to tax this product in order to make it pay its way and to nudge Canadians towards healthier beverage choices."
- Dr. Tom Warshawski, Pediatrician and Chair, Childhood Obesity Foundation
“Canadians are among the highest consumers of sugar worldwide. The increased risk for type 2 diabetes with excessive consumption of sugar sweetened beverages is clear. We need to use this knowledge to prevent further cases of type 2 diabetes and other chronic diseases—and urge the federal government to make a commitment to promote the health of Canadians by introducing a levy.”
- Rick Blickstead, President and CEO, Diabetes Canada
“We know Canadians – including our children – are consuming too much sugar and sugary drinks in particular are harming our health. These products are not essential groceries, providing little to no nutritional value, and a levy is one proven way to help reduce consumption and support healthy living initiatives.”
- Mary Lewis, VP, Research, Advocacy and Health Promotion, Heart & Stroke
About Diabetes Canada
Diabetes Canada is the registered national charitable organization that is making the invisible epidemic of diabetes visible and urgent. Diabetes Canada partners with Canadians to End Diabetes through:
- Resources for health care professionals on best practices to care for people with diabetes;
- Advocacy to governments, schools and workplaces; and
- Funding world-leading Canadian research to improve treatments and find a cure.
For more information, visit diabetes.ca or call 1-800-BANTING (226-8464).
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