Food prices: Local, provincial and territorial taxation of unhealthy foods

January 1, 2019

Learn how local, provincial and territorial governments can increase healthy eating by increasing taxes on unhealthy foods

Inside this healthy eating policy pack

• Background evidence: healthy eating and cancer
• Evidence-informed policy actions to increase healthy eating
• Key statistics: healthy eating in Canada
• Public and policymakers’ perceptions of healthy eating in Canada
• Economic evidence to support healthy eating policy
• Indicators to measure progress on healthy eating policy

Increase taxes on unhealthy foods

Issue

Food prices

Action

Increase taxes on unhealthy foods ^1,2,3,4

• Taxes on unhealthy foods are in place and increase the retail prices of these foods by at least 10% to discourage unhealthy food choices ¹
• Taxes on unhealthy foods are reinvested to improve population health ¹

Degree of policy adoption*

Provinces and territories: LOW
31 Canadian municipalities:** LOW

Current action(s) in Canada

Provinces and territories

While the federal Excise Tax Act ⁵ applies federal, harmonized, and/or provincial/territorial sales tax to some unhealthy foods, such as soft drinks, fruit drinks with less than 25% natural fruit juice, candy, potato chips, packaged processed foods, etc., the categories and definitions of unhealthy foods could be broadened, and taxes could be increased to reduce consumption.

In addition, in Ontario, prepared foods sold for under a total cost of $4.00 are exempt from the provincial portion of the Harmonized Sales Tax (HST), however, there is no requirement for the prepared foods to be healthy.

31 municipalities**

None of the 31 local municipalities in the Directory have implemented health-related food taxes.

Opportunities for action

Taxation policies could be strengthened by implementing taxation of unhealthy foods or removing taxes on healthy prepared foods:⁶

• At the provincial/territorial level, fruit drinks containing less than 25% natural fruit juice are taxable. This could be strengthened by requiring all juices to be taxed and at a higher rate.
• Point-of-sale taxes on sugar-sweetened beverages are another opportunity to promote healthier diets.⁶ Often, this action is coupled with a redirection of such tax revenues to promoting public health.¹ Although this type of policy is more likely to be seen at other levels, municipalities could also implement similar taxes at the local level (e.g., New York City’s sugar-sweetened beverage tax).⁶

* Levels of adoption:  LOW = very few jurisdictions have adopted evidence-informed policy action; MEDIUM = some, but not all jurisdictions have adopted evidence-informed policy action; HIGH = most jurisdictions have adopted evidence-informed policy action.

** Prevention Policies Directory captures information for 31 Canadian municipalities (18 largest municipalities in Canada, and at least 1-2 largest municipalities in all other provinces/territories).

References

¹ Vanderlee L, Goorang S, Karbasy K, Schermel A, L’Abbe M. Creating healthier food environments in Canada: Current policies and priority actions – Summary report. Toronto; University of Toronto, 2017.

² World Cancer Research Fund International. NOURISHING policy framework. Retrieved from: https://www.wcrf.org/int/policy/nourishing/our-policy-framework-promote-healthy-diets-reduce-obesity

³ World Cancer Research Fund International. (2009). Policy recommendations. Retrieved from: https://www.wcrf.org/dietandcancer/cancer-prevention-recommendations

⁴ World Health Organization (2013). Global action plan for the prevention and control of non-communicable diseases: https://www.who.int/nmh/events/ncd_action_plan/en/

⁵ Government of Canada. (2009). Basic groceries. Retrieved from: https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/4-3.html

⁶ Alberta Policy Coalition for Chronic Disease Prevention (APCCP). (2018). Alberta’s Nutrition Report Card on Healthy Food Environments for Children and Youth. Retrieved from: http://abpolicycoalitionforprevention.ca/evidence/albertas-nutrition-report-card/