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Fat Tax Fiasco

Author: Colin Craig 2014/02/14

Manitoba’s NDP government knew back in 2008 that “fat taxes” were ineffective.

So why on earth would the government keep studying the idea year after year and continue to look for ways to implement such a tax?

The argument governments usually put forward when introducing fat taxes is that people have gotten obese and treating obesity-related illnesses are a huge cost to the health care system. Thus, they claim taxing chocolate bars, sodas and other “fatty foods” is a way to curb obesity.

But consider what a Manitoba Department of Healthy Living staffer noted about “fat taxes” in a backgrounder document in 2008 – “Currently there is only, at best, weak evidence that junk food taxes would be effective in achieving public health goals of influencing food choices. Such taxes would certainly raise revenue.”

That document, along with more than a hundred of other government pages, were obtained by the Canadian Taxpayers Federation, a donation-based taxpayers’ watchdog organization.

The latter part of the bureaucrat’s comment – noting the tax would “raise revenue” – is likely why the government kept continuing to look at the matter. Documents show the bureaucracy and their political masters tossed around the name “Junk Food Tax” and eventually landed on “Healthy Living Levy.”

A discussion paper about a “Healthy Living Levy” was drafted and it looks like it went to cabinet. Clearly the government took this policy option very seriously, even after they knew it would basically be a cash grab and wouldn’t curb obesity.

Thankfully, after the Canadian Taxpayers Federation brought this matter to the media and caught the government off guard, the province’s Finance Minister indicated they wouldn’t be bringing in any kind of tax on junk food.

Sure, we’ve heard such comments before from the government. After all, the NDP promised in the 2011 election not to raise the PST. However, they know breaking that promise has cost them dearly – public opinion polls show the Premier has the second lowest approval rating in the country. The NDP now know that bringing in a fat tax after promising not to, would be the proverbial nail in their coffin.

If the government really wants to cut the fat, why not start with the fat in government? Spending since the NDP took over in 1999 has increased at double the inflation rate. Not surprisingly, the bureaucracy and the province’s debt have both ballooned to record levels.

Next door, Saskatchewan’s government has reduced the bureaucracy by over 1,900 positions; Manitoba can tighten its belt too. Pension costs need to be brought under control and competition and incentives for eliminating waste should be introduced. Premier Selinger should also lead by example and trim the size of his large cabinet from 19 politicians down to 16; the size it was when Gary Doer left office.

As for obesity, what the government doesn’t seem to realize is that doing things like raising the PST only reduced the amount of money the public had to buy healthy foods. Everyone knows a salad costs more than a bag of chips.

One thing is clear; the government needs to start focusing on its own fat and less on Manitobans’ skinny wallets.


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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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