British Columbia

Why B.C. is now taxing sugary, carbonated drinks

B.C.'s finance minister says her government is acting on years of recommendations to tax sugary, carbonated drinks to help with the health outcomes for younger people. It doesn’t hurt the new tax will help her balance her budget.

Province will charge 7 per cent on beverages linked to obesity, diabetes

Sweetened, carbonated beverages in B.C. will no longer be exempt from provincial sales tax starting July 1, 2020. (Jeff Chiu/The Associated Press)

British Columbia is slapping a seven per cent tax on carbonated beverages that are sweetened.

The measure, which eliminates a provincial sales tax exemption for certain beverages, is part of the province's projected balanced budget for next year.

It was announced by Finance Minister Carole James during her budget presentation in Victoria on Tuesday. The new tax on sweetened, carbonated beverages will come into effect on July 1, 2020.

James says the measure is based on seven years of health recommendations and will address increases in health-care costs from the consumption of sugary drinks, which are linked to negative health outcomes such as obesity and diabetes.

"This is a health initiative to look at how we grow healthy young people," she said.

James said that research shows that the biggest consumers of pop are teenagers between the ages of 14 and 18.

"We certainly want to make sure we are doing our part to set them on the stage of having a healthy life ahead," she said.

She says the tax is a response to health professionals calling for the tax, along with an all-party legislative committee and the 2018 Medical Services Plan task force.

While James said the new tax is a progressive measure to help the overall health of British Columbians, it also helps her balance her latest 2020 budget.

The measure will add $27 million to revenues in 2020/2021 and $37 million in 2021/2022. The projected surplus for 2020/2021 is $227 million.

'Some revenue'

"It brings in certainly some revenue, which will help with health care … but the real focus here is a step in making sure we address those recommendations and address the health of our young people," she said.

"Certainly we known that sweetened carbonated beverages are one of our high areas when it comes to health costs and health impacts."

Dr. Tom Warshawski, the chair of the B.C. Childhood Obesity Foundation says the new tax in B.C. helps the province catch up to others. He says B.C. has, in the past, treated sugary drinks as a grocery item, when he and others view them as a luxury item.

"And it's an unhealthy one at that," he said. "Really what we're doing is bringing our tax policy closer in alignment to what the rest of the country is doing already."

Officials with the B.C. government say every other province in Canada has a similar tax with the exception of Alberta.