Pitching and Pricing to Sell:
Implications of Advertising and Sales Tax Policies for Nutrition
Bill Jeffery, National Coordinator
Centre for Science in the Public Interest
at
96th Annual Conference of the
Canadian Public Health Association
Ottawa Congress Centre
September 18-21, 2005
1
About the
Centre for Science in the Public Interest

Is an independent health advocacy organization focussing on nutrition policy issues.

Has offices in Ottawa and Washington, with Canadian staff based mostly in Toronto and Ottawa.

Is funded in Canada by over 100,000 subscribers to the Canadian edition of the Nutrition Action

Does not accept funding from industry or government.

Co-ordinates the Alliance for Food Label Reform (groups representing 2 million Canadian citizens and health
professionals).

Founded the International Association of Consumer Food Organizations, an officially recognized observer at
the WHO/FAO Codex Alimentarius Commission, and two other global consumer protection alliances.
Healthletter.
2
A summary of our public policy recommendations to
improve diet and increase physical activity can be found at: “Supreme Intervention”
(Sept 2005 editorial), 32(7):2 Nutrition Action Healthletter, or at
http://cspinet.org/canada/pdf/PanCdn_EffectiveStrat.pdf
3
Canadian annual costs of diet-related disease

An average of nearly 5 years of healthy life expectancy is lost due to six diet-related risk factors. (See: World
Health Organization, The World Health Report 2002, (Geneva: WHO, 2002). Esp. see Table 4 in the annex which shows
that loss of healthy life expectancy due to all risk factors is 9.4 disability-adjusted-life-years averaged for Canadian men
and women at http://www.who.int/whr/2002/en/whr2002_annex4.pdf) and Table 10 which shows that, in developed
countries, 50% of all-risk-attributable Disability-Adjusted Life Years (DALYs) were lost due to blood pressure, cholesterol,
overweight, low fruit and vegetable intake, and certain rare types of childhood and maternal undernutrition at
http://www.who.int/whr/2002/en/whr2002_annex9_10.pdf). So, 50% of 9.4 years is 4.7 years.)

More than 25,000 premature deaths annually are caused by diet-related disease. (See, for example, the
extrapolation from published figures in endnote 11 at: http://cspinet.org/canada/pdf/Eng_CSPI_Finance.pdf)

A total of $6.6 billion per year from the Canadian economy as a whole (health care costs plus lost
productivity) (See: Diane Gorman, Assistant Deputy Minister of Health, “Speech at the Stakeholder Meeting on the
Review of Canada’s Food Guide to Healthy Eating,” (Ottawa: Health Products and Food Branch, Health Canada, January 20,
2004) at 3 estimating the value of health care costs and lost productivity due to diet-related disease to be $6.6 billion
annually in Canada. Available on the Internet at: http://www.hc-sc.gc.ca/fn-an/alt_formats/hpfb-dgpsa/pdf/food-guidealiment/pres_speech_adm-pres_contexte_sma_e.pdf and see Health Canada (2003) Economic Research Analysis Section,
Policy Research Division, Strategic Policy Directorate, Population and Public Health Branch. Custom tabulations).
4
S. Basrur, 2004 Report of the Chief Medical Officer Of Health:
Healthy Weights, Healthy Lives, (Toronto: CMOH, 2004) 49 at
http://www.health.gov.on.ca/english/public/pub/ministry_reports/cmoh04_report/healthy_weights_112404.pdf
Develop policies and programs that promote
healthy eating, including:
• exploring policy options to control food advertising
targeting children similar to those now in place in
Quebec, where advertising of some products to
children under 13 is prohibited. (A number of
European countries have introduced legislation to
ban advertising aimed at children.)
• investigating the potential impact of food pricing
options on consumption patterns, especially for
communities where healthy foods, such as fruits
and vegetables, are particularly expensive
5
K. Raine, Overweight and Obesity in Canada: A Population Health
Perspective, (Ottawa: Canadian Popn. Health Init. of the Canadian
Inst. for Health Information, 2004) 54, 55 at
http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page=GR_1130_E)
Recommendations:
 Regulate media promotion of “junk” food by
banning advertising to children during peak viewing
times, or by legislating equal time for promotion of
healthy foods and physical activity.
 Develop a complementary strategy to the GST/HST
to subsidize the cost of low-energy, nutritious food
with taxes of sufficient magnitude to affect sales of
high-energy, low nutrient foods. The effect would
be a changed price structure for food that favours
purchase of more nutritious choices.
6
Report of the Joint World Health Organization/Food and Agriculture
Organization Expert Consultation on Diet, Nutrition, and the Prevention of
Chronic Diseases, (Tech. Rpt. 916)(WHO: Geneva, 2003) available at:
http://whqlibdoc.who.int/trs/WHO_TRS_916.pdf

Heavy marketing of fast-food outlets and energydense, micronutrient-poor foods and beverages
(causative).
“...Fast food restaurants, and foods and beverages that
are usually classified under the ‘eat least’ category in
dietary guidelines are among the most heavily marketed
products, especially on television...The huge expenditure
on marketing fast-foods and other ‘eat least’ choices
(US$ 11 billion in the United States alone in 1997) was
considered to be a key factor in the increased
consumption of food prepared outside the home in
general and of energy-dense, micronutrient-poor foods in
particular…The evidence that the heavy marketing of
these foods and beverages to young children causes
obesity is not unequivocal. Nevertheless, the
Consultation considered that there is sufficient indirect
evidence to warrant this practice being placed in the
‘probable’ category and thus becoming a potential target
for interventions.” (p. 65)
7
Resolution 57.17 of the 57th session of the World Health Assembly passed May 22,
2004 adopting the “Global Strategy on Diet, Physical Activity and Health” at:
http://www.who.int/gb/ebwha/pdf_files/WHA57/A57_R17-en.pdf).
Article 46…
(3) Marketing, advertising, sponsorship and promotion. Food advertising affects
food choices and influences dietary habits. Food and beverage advertisements
should not exploit children’s inexperience or credulity. Messages that encourage
unhealthy dietary practices or physical inactivity should be discouraged, and
positive, healthy messages encouraged. Governments should work with consumer
groups and the private sector (including advertising) to develop appropriate
multisectoral approaches to deal with the marketing of food to children, and to
deal with such issues as sponsorship, promotion and advertising.
Article 47…
(2) Fiscal policies. Prices influence consumption choices. Public policies can
influence prices through taxation, subsidies or direct pricing in ways that
encourage healthy eating and lifelong physical activity. Several countries use fiscal
measures, including taxes, to influence availability of, access to, and consumption
of, various foods; and some use public funds and subsidies to promote access
among poor communities to recreational and sporting facilities. Evaluation of such
measures should include the risk of unintentional effects on vulnerable
populations.
8
ADVERTISING
(ESP. TO CHILDREN)
AND HEALTH
9
The de facto nutrition education in Canada

Over $720 million was spent to advertise restaurants, food and alcohol in 1998. (McElgunn J. Canada's top 25
advertising categories. Marketing Magazine September 27, 1999:44.)

The average Canadian child sees 350,000 TV commercials before graduating from high school, spends
nearly as much time watching TV as attending classes.

What’s on the menu?: nutritional weaklings like soft drinks, sugary cereals, candy, french fries, fast food,
condiments, and activity-limiting products such as video games, movies, and television shows.

In a 1991 survey of programming, less than 9% of food ads were for dairy, fruits and vegetables (excluding
french fries) (Østbye T, Pomerleau J, et al. Food and Nutrition in Canadian ‘Prime Time’ Television Commercials. Canadian
Journal of Public Health 84(6) 370-74.)
10
Truls Østbye, Pomerleau J, et al. “Food and Nutrition in Canadian
‘Prime Time’ Television Commercials,”
(1993) 84(6) Canadian Journal of Public Health 370-74.

A 1991 review of a week of Canadian prime-time and Saturday morning television on five channels (160
hours of broadcast time) programming observed:
 3% of food commercials promoted vegetables or fruit (excluding french fries)
 40% promoted low-nutrient beverages, butter, margarine, salty snacks, sweets/candy, and chewing gum

Follow-up study is in progress will also assess volume of advertisements for inactivity-promoting products
including sedentary games, movies and television programs.
11
G. Hastings, Et Al., Review Of Research on the Effects of Food Promotion to Children,
prepared for the UK Food Standards Authority, (London: UK FSA, and Glasgow,
Scotland: Centre for Social Marketing, University of Strathclyde, 2003), 19, 87-8, 138
at http://www.food.gov.uk/multimedia/pdfs/foodpromotiontochildren1.pdf

Seminal systematic review of English literature on
advertising directed at children concluded:
 foods marketed to children tend to be of very low
nutritional value;
 that there is reasonably strong evidence of that
food promotion affects both brand and category
preferences, and evidence of a strong effect of food
promotion on children’s purchasing and purchaserelated behaviour
12
Consumer Protection Act, R.S.Q., c. P-40.1, ss. 248-9
(see also: ss. 87-91 of the Consumer Protection Regulations, R.R.Q., 1981,
c. P-40.1; and Application Guide for Sections 248 and 249 of the Québec Consumer
Protection Act (Advertising Intended for Children Under 13 Years of Age).
The Act, which came into force in April 1980, states:
 248. Subject to what is provided in the regulations, no person may make use of commercial
advertising directed at persons under thirteen years of age.
 249. To determine whether or not an advertisement is directed at persons under thirteen years of
age, account must be taken of the context of its presentation, and in particular of
 (a) the nature and intended purpose of the goods advertised;
 (b) the manner of presenting such advertisement;
 (c) the time and place it is shown.
13
Data on health impact of the ban is scarce and speculative, but see:
Sarah Carr, Overweight in Canadian Children, Mapping the Geographic Variation (M.Sc. Thesis),
London School of Hygeine and Tropical Medicine, 2004. Based on Data made available to the
author from Refreshments Canada and Statistics Canada (Catalogue 91-002, 91-210).
Figure 25: Soft Drink Consumption (1978-2000)
140
120
Consumption (Litres)
100
80
Canada
Quebec
60
40
20
0
1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Year
14
Irwin Toy v. Québec (Attorney General), [1989] 1 S.C.R. 927 at 988
(http://www.lexum.umontreal.ca/csc-scc/en/pub/1989/vol1/html/1989scr1_0927.html)

In upholding the consititutional validity of the Quebec Consumer Protection Act restrictions on advertising
to children under age 13 (in the case of a challenge by a toy company) the Court held:
“...advertising directed at young children is per se manipulative. Such advertising aims to promote
products by convincing those who will always believe.”

The Court relied on evidence, since reinforced, concerning the capacity of children to capably interpret
commercial advertising. Brian Wilcox, Task Force Chair, Report of the APA Task Force on Advertising and
Children (Washington, DC: American Psychological Association, February 20, 2004) at 5
(http://www.apa.org/releases/childrenads_summary.pdf)
15
Restrictions on advertising junk food
and/or advertising to children

Ads to kids may already contravene existing common law, and federal and provincial restrictions on
misleading, deceptive advertising and unconscionable business practices (see, forthcoming “The Supreme Court
of Canada’s Appraisal of the 1980 Ban On Advertising To Children in Québec: Implications For ‘Misleading’ Advertising
Elsewhere” Loyola of Los Angeles Law Review, March 2006)

Nonetheless, plainly, federal and provincial governments have authority to regulate/legislate advertising.

So far, Québec (children under age 13), Norway (ads directed at children under age 12), and Sweden
(television ads aimed at children under age 12) have legislated broad bans on advertising to children, and
other European countries have issued narrower restrictions. Corinna Hawkes, Marketing Food to Children: The
Global Regulatory Environment, (Geneva: World Health Organization, 2004) at
http://whqlibdoc.who.int/publications/2004/9241591579.pdf
16
SHIFTING SALES TAXES
FROM HEALTH-PROMOTING
TO HEALTH-ERODING
FOODS
17
Sales tax reform to promote healthy eating:
Sales tax increases have been effective in curtailing smoking rates
(though, unlike food, tobacco is addictive and has few substitutes)

According to a case study on Canada published by
the World Bank, increased taxation on tobacco
products has always proven to be the biggest
factor in predicting per capita consumption.
Sweanor D, Kyle K, “Legislation and Applied Economics in Pursuit
of the Public Health,” at 87 and 87-91 in J. de Beyer and L.
Waverly Bridgen, Tobacco Control Policy: Successes and
Strategies, (Washington: The World Bank, 2003) at
http://www1.worldbank.org/tobacco/pdf/2850-Ch04.pdf

Though comprehensive interventions are more
effective (i.e., taxes accompanied by workplace
bans and education campaigns, etc.), for example
a 33% tax increase alone could be expected to
reduced smoking among men by 20% (from 25%
to 20%). See Stephens S, Pederson LL, et al., “Comprehensive
tobacco control policies and the smoking behaviour of Canadian
adults. Tobacco Control 2001;10:317-322.
18
French S, Jeffery R, et al. Pricing and Promotion on
Low-Fat Vending Snack Purchases: The CHIPs Study.
American Journal of Public Health. 2001; 91(1)112-117.

Three-week random controlled trial of price reductions on low fat foods in 55 vending machines in
Minneapolis schools and workplaces.

Price reductions on low fat foods increased the percentage of low fat sales by the following amounts:
 10% price reduction, 9% increase in sales (n.s. at P< 0.05)
 25% price reduction, 39% increase in sales
 50% price reduction, 93% increase in sales

And total sales volumes either remained approximately the same or increased in all three treatment
conditions.

(N.B. The results from this study are suggestive, by analogy, of the impact of sales taxes on foods sold in
the community. School officials (and possibly employers) may have a legal fiduciary duty to ensure that,
overall, on-campus food-service catering to minors is nutritious, regardless of the viability of market-based
price incentives to promote nutritious foods. If so, simply favourably pricing nutritious foods may not
discharge that duty.)
19
Marshall, T., “Exploring a Fiscal food policy: The case of diet and
ischaemic heart disease,” (2000) British Medical Journal (320:301).

The author used economic modelling to estimate the effect of applying the 17.5% UK Value Added Tax
(VAT) to six categories of foods which supply 44% of total dietary saturated fat.

Assumed own-price elasticities of between -0.5 and -1.0 for the product categories (whole milk, -1.0;
cheese, -0.5; butter, -0.7; biscuits, -1.0; buns, cakes and pastries, -1.0; puddings and ice-cream, -1.0)

His assumptions and findings are similar to actual natural experiments conducted in China, and modelling
done in the United States and Denmark (e.g., Guo X, Popkin BM, Food Price Policy Can Favorably Alter Macronutrient Intake in
China. Journal of Nutrition (1999) 129(5):994-1001 at 999, 1000.; and Sinne Smed, Jørgen Dejgaard Jensen and Sigrid Denver, Differentiated
Food Taxes as a Tool in Health and Nutrition Policy, presented at the XIth Congress of the European Association of Agricultural Economists, ‘The
Future of Rural Europe in a Global Agri-Food System’, Copenhagen, Denmark, August 24-27, 2005 at
http://www.eaae2005.dk/CONTRIBUTED_PAPERS/S23_474_Jensen&Smed.pdf)

Conclusion: Price differential (on this single nutrient, for six food categories) would lead to:
 a reduction in the percent of calories from saturated fat by 0.67 percentage points
 a decline in incidence of ischemic heart disease by 1.8% to 2.6%, and
 the avoidance of between 1,800 and 2,500 deaths per year (900 to 1300 of which would be in people under age 75.
20
Food sales taxes already in place

Canada
 GST 7% (since 1991); PST/HST on food (avg. 8%) all provinces except AB, SK, BC
 B.C. Next (maybe will get it right)?: Rec. #29 of the The Select Standing Committee on Health, The Path to Health and Wellness
(Victoria: Legislative Assembly of BC, 2004) at 62-3.
 Québec next? (De Souza M, “Chew on this: a tax on junk food” Montréal Gazette Feb. 2, 2005 at A9.)
 Current annual combined federal and provincial sales tax revenue from food sales: approx. $4 billion annually

United Kingdom, New Zealand and Australia: Rules are very similar to Canadian GST (See UK VAT Notice 701/14,
May 2002 and Mann J, Cutting the Fat: How a Fat Tax Can Help Fight Obesity, (Diabestes New Zealand, 2004) at 22.)

France: Imposes a 20.6% tax on sweets, chocolate, margarine, and vegetable fat (compared to a 5.5% tax
on other food) See: A. Leicester, F. Windmeijer, Briefing Note No. 49: The 'Fat Tax': Economic Incentives to Reduce Obesity,(London: The
Institute for Fiscal Studies, 2004) (see: http://www.ifs.org.uk/consume/bn49.pdf );

US: In 2000, 19 states and cities apply sales/manufacturers tax on soft drinks, snack foods (sales taxes
range from 5% to 7.5%) (MF Jacobson, KD Brown, “Small Taxes on Soft Drinks and Snack Foods to Promote Health,” (2000) 90(6)
American Journal of Public Health 854.) US: By 2005, 27 such regimes were in existence or proposed in US
jurisdictions (See: Chouinard HE, Davis DE, et al., “Effects of a Fat tax on Dairy Products,” Working Paper No. 1007, Dept. of Agriculture
and Resource Economics & Policy, Division of Agricultural an Natural Resources, University of California at Berkley, 2005 at 26-7 at
http://are.berkeley.edu/~lafrance/working%20papers/WP-1007.pdf)
21
Federal Excise Tax Act, R.S.C. 1985, c. E-13, Schedule VI, Part III defines “basic
groceries” which are “zero-rated” for GST. (Bean counters held to a lower standard)
CURRENTLY TAXED AT 7% (or 15%)
(a) wine, spirits, beer, malt liquor or other alcoholic beverages;
(c) carbonated beverages;
(d) non-carbonated fruit juice beverages or fruit flavoured beverages, other than milk-based beverages, that
contain less than 25% by volume of
(i) a natural fruit juice or combination of natural fruit juices, or
(ii) a natural fruit juice or combination of natural fruit juices that have been reconstituted into the
original state,
or goods that, when added to water, produce a beverage included in this paragraph;
(e) candies, confectionery that may be classed as candy, or any goods sold as candies, such as candy floss,
chewing gum and chocolate, whether naturally or artificially sweetened, and including fruits, seeds, nuts and
popcorn when they are coated or treated with candy, chocolate, honey, molasses, sugar, syrup or artificial
sweeteners;
(f) chips, crisps, puffs, curls or sticks (such as potato chips, corn chips, cheese puffs, potato sticks, bacon
crisps and cheese curls), other similar snack foods or popcorn and brittle pretzels, but not including any
product that is sold primarily as a breakfast cereal;
(g) salted nuts or salted seeds;
(h) granola products, but not including any product that is sold primarily as a breakfast cereal;
(i) snack mixtures that contain cereals, nuts, seeds, dried fruit or any other edible product, but not including
any mixture that is sold primarily as a breakfast cereal;
(j) ice lollies, juice bars, flavoured, coloured or sweetened ice waters, or similar products, whether frozen or
not;
(k) ice cream, ice milk, sherbet, frozen yoghurt or frozen pudding, non-dairy substitutes for any of the
foregoing, or any product that contains any of the foregoing, when packaged or sold in single servings;
(l) fruit bars, rolls or drops or similar fruit-based snack foods;
(m) cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants with sweetened filling or
coating, or similar products where
(i) they are prepackaged for sale to consumers in quantities of less than six items each of which is a
single serving, or
(ii) they are not prepackaged for sale to consumers and are sold as single servings in quantities of
less than six,
but not including bread products, such as bagels, English muffins, croissants or bread rolls, without
sweetened filling or coating;
(n) beverages (other than unflavoured milk) or pudding, including flavoured gelatine, mousse, flavoured
whipped dessert product or any other products similar to pudding, except
(i) when prepared and prepackaged specially for consumption by babies,
(ii) when sold in multiples, prepackaged by the manufacturer or producer, of single servings, or
(iii) when the cans, bottles or other primary containers in which the beverages or products are sold
contain a quantity exceeding a single serving;
(o) food or beverages heated for consumption;
(o.1) salads not canned or vacuum sealed;
(o.2) sandwiches and similar products other than when frozen;
(o.3) platters of cheese, cold cuts, fruit or vegetables and other arrangements of prepared food;
(o.4) beverages dispensed at the place where they are sold;
(o.5) food or beverages sold under a contract for, or in conjunction with, catering services;
(p) food or beverages sold through a vending machine;
(q) food or beverages when sold at an establishment at which all or substantially all of the sales of food or
beverages are sales of food or beverages included in any of paragraphs (a) to (p) except where
(i) the food or beverage is sold in a form not suitable for immediate consumption, having regard to
the nature of the product, the quantity sold or its packaging, or
(ii) in the case of a product described in paragraph (m),
PROPOSAL AMENDMENTS FOR DISCUSSION
PROPOSED TAXABLE
[NO CHANGES.]
(c) carbonated beverages containing more than 25 Calories per 250 ml serving;
(d) non-carbonated fruit juice beverages or fruit flavoured beverages, other than milk-based beverages, that
contain less than 50% by volume of
(i) a natural vegetable or fruit juice or combination of natural vegetable or fruit juices, or
(ii) a natural vegetable or fruit juice or combination of natural vegetable or fruit juices that have been
reconstituted into the original state,
or goods that, when added to water, produce a beverage included in this paragraph;
[NO CHANGES.]
[NO CHANGES.]
[NO CHANGES.]
[NO CHANGES.]
(i) snack mixtures that contain cereals, nuts, seeds, dried fruit or any other edible product, but not including
any mixture that is sold primarily as a breakfast cereal;
(j) ice lollies, juice bars, flavoured, coloured or sweetened ice waters, or similar products, whether frozen or
not;
(k) ice cream, ice milk, sherbet, frozen yoghurt or frozen pudding, non-dairy substitutes for any of the
foregoing, or any product that contains any of the foregoing, when packaged or sold in single servings;
(l) fruit bars, rolls or drops or similar fruit-based snack foods
(m) cakes, muffins, pies, pastries, tarts, cookies, doughnuts, brownies, croissants, with sweetened filling or
coating, or similar products where
(i) they are prepackaged for sale to consumers in quantities of less than six items each of which is a single
serving, or
(ii) they are not prepackaged for sale to consumers and are sold as single servings in quantities of less than
six,
but not including bread products, such as bagels, English muffins, croissants or bread rolls, without sweetened
filling or coating provided that a reference amount, as defined by the Food and Drug Regulations (see The
Canada Gazette,Part II, Vol. 137, No. 1 (January 1, 2003) Schedule M at 357-363 as amended.) of the food
comprises less than 150 Calories and is made of at least sixty percent whole grain;
(n) beverages (other than unflavoured milk) or pudding, including flavoured gelatine, mousse flavoured
whipped dessert product or any other products similar to pudding, except
(i) when prepared and prepackaged specially for consumption by babies,
(ii) when sold in multiples, prepackaged by the manufacturer or producer, of single servings, or
(iii) when the cans, bottles or other primary containers in which the beverages or products are sold
contain a quantity exceeding a single serving;
[REPEAL; APPLY NUTRITION CRITERIA]
[REPEAL; APPLY NUTRITION CRITERIA]
[REPEAL; APPLY NUTRITION CRITERIA]
[REPEAL; APPLY NUTRITION CRITERIA]
[REPEAL; APPLY NUTRITION CRITERIA]
[REPEAL; APPLY NUTRITION CRITERIA]
[REPEAL; APPLY NUTRITION CRITERIA]
[REPEAL; APPLY NUTRITION CRITERIA]
22
Excise Tax Act, continued:
(r) unbottled water, other than ice.
2. A supply of unbottled water for human consumption made to a consumer, when the water is dispensed to
the consumer in a quantity exceeding a single serving through a vending machine or at a permanent
establishment of the supplier.
[REPEAL]
(s) salt;
(t) sugar;
(u) butter;
(v) margarine, cooking oils, butter and spreads containing more than 10% of the daily value Reference
Standard for saturated plus trans fat as prescribed in the Food and Drug Regulations (see The Canada
Gazette,Part II, Vol. 137, No. 1 (January 1, 2003) at 156 as amended);
(w) milk containing more than 1% milk fat or more than 10 grams of added sugars per eight ounce serving,
unless a consumer claims, at the point of purchase, on behalf of children under the age of 16 years, an
exemption from tax for higher fat types of milk;
(x) cheese products with more than 20% milk fat;
(y) all cuts of meat, poultry and seafood that do not meet the definitions for lean, or extra-lean prescribed in
the Meat Inspection Regulations or “low fat” prescribed in the Food and Drug Regulations;
(z) subject to section z1 and z2, any foods that contain, in a serving, more than 20% of the Daily Value for
(i) saturated plus trans fat as prescribed by the Food and Drug Regulations (see: The Canada
Gazette,Part II, Vol. 137, No. 1 (January 1, 2003) at 156 as amended),
(ii) sodium as prescribed by the Food and Drug Regulations (see: The Canada Gazette,Part II, Vol.
137, No. 1 (January 1, 2003) at 156 as amended),
(iii) free sugars as recommended by the World Health Organization (see: Report of the Joint World
Health Organization/Food and Agriculture Organization Expert Consultation on Diet, Nutrition, and
the Prevention of Chronic Diseases, (Tech. Rpt. 916)(WHO: Geneva, 2003) available at:
http://whqlibdoc.who.int/trs/WHO_TRS_916.pdf at 56)
(z1) subject to section z2, any prepackaged or restaurant main-dish entrée, excluding beverages, that contains,
in one serving, more than 25% of the Daily Value for
(i) saturated plus trans fat per serving as prescribed by the Food and Drug Regulations (The Canada
Gazette,Part II, Vol. 137, No. 1 (January 1, 2003) Schedule M at 357-363 as amended),
(ii) sodium per serving as prescribed by the Food and Drug Regulations (The Canada Gazette,Part II,
Vol. 137, No. 1 (January 1, 2003) Schedule M at 357-363 as amended), or
(iii) free sugars (as recommended by the World Health Organization for a 2000 Calorie diet in Report
of the Joint World Health Organization/Food and Agriculture Organization Expert Consultation on
Diet, Nutrition, and the Prevention of Chronic Diseases, (Tech. Rpt. 916)(WHO: Geneva, 2003)
available at: http://whqlibdoc.who.int/trs/WHO_TRS_916.pdf at 56;
(z2) any prepackaged meals or restaurant table d'hôte or combination menu item that contains
(i) more than 35% of the Daily Value as prescribed by the Food and Drug Regulations in The Canada
Gazette, Part I, Vol. 135, No. 24 (June 16, 2001) at 2070 for
(A) saturated plus trans fat per serving as prescribed by the Food and Drug Regulations,
(B) sodium per serving as prescribed by the Food and Drug Regulations,
(C) free sugars as recommended by the World Health Organization for a 2000 Calorie diet;
or
(ii) less than 250 millilitres of fruits or vegetables that are prepared without oil or sugar.
[REPEAL]
23
Most accessible, current scientific advice re diet
Report of the Joint World Health Organization/ood and Agriculture Organization Expert Consultation on Diet,
Nutrition, and the Prevention of Chronic Diseases, (Tech. Rpt. 916)(WHO: Geneva, 2003) available at:
http://whqlibdoc.who.int/trs/WHO_TRS_916.pdf
24
Or the Canada Food Guide (under review) or
new Dietary Reference Intake reports.
25
What would a health promoting food tax look like?





Not focussed on total fat, or (exclusively) saturated fat or sugar alone; overall nutrition profile of food must
be considered is determining whether to tax or exempt
Not just about adipose tissue; only part of heart disease, colo-rectal cancer, osteoporosis (lower risk)
appears to be mediated through obesity
Health Canada in cooperation with Dept. of Finance establish nutrition criteria designed to optimally
improve diet (on basis of dietary guidance and price elasticities)
 As for current GST/PST/HST, rules should specify categories of foods and, where necessary, simple nutrient threshold
criteria that are readily ascertainable from product label information
Effect on tax revenue of criteria for zero-rated status (three scenarios):
 Strict: more revenue (excess could fund nutrition promotion programs; departures from tradition are imperative)
 Permissive: less revenue
 Intermediate: revenue neutral
Possible scientific bases for tax/exemption criteria:
 Institute of Medicine’s Dietary Reference Intake reports
 WHO Technical Report #916
 Canada’s Food Guide (as revised)
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What would a health promoting food tax look like? (cont’d)

Manufacturer determines tax status from rules and indicates it with a statement on the product label (or
instructions to retailer) or menu -- i.e., helps address information failure

Nutrition-promoting restaurant foods would become zero-rate

Regressive effects:
 small ($0.60 to $2.40 per week) -- though it could reduce to zero or net savings for consumers who select mostly health-promoting
foods;
 regressive impact on children’s purchases (because they have limited disposable income) may be beneficial in the long term
 compensable by low-income healthful food subsidies or GST rebates to low income consumers; use excess revenue to more than amply
offset regressive effect
 currently some healthy eating is penalized
 may give incentive to manufacturers to reformulate or innovate to escape tax or supply inexpensive, nutritious substitutes
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Parting thoughts:

Since the opening plenary on Sunday...
 Nearly 137 Canadians died from diet-related disease.
 Approximately $72 million dollars were incurred for health care and lost productivity due to diet-related cancers, heart
disease, stroke and diabetes.

Quote: “Implementing food taxes may not be easy…nonetheless…it is possible to overestimate the political
and implementation difficulties in light of the potential gains.” (Strnad J, Professor of Law, Stanford University,
“Conceptualizing the ‘Fat Tax’: The Role of Food Taxes in Developed Economies” Harvard Tax Policy Conference,
Cambridge, Massachusetts (October 2002) at 83.)

Join our coalition of 24 health and citizen groups, collectively representing 2 million Canadians.
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Contact info:
Bill Jeffery, L.LB., National Coordinator
Centre for Science in the Public Interest
Suite 4550, CTTC Bldg.
1125 Colonel By Drive
Ottawa, Ontario K1S 5R1
jefferyb@istar.ca
Tel.: 613-244-7337
Fax: 613-244-1559
Website: http://www.cspinet.org/canada/
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