Sugar rush: Small business owners scramble for answers as N.L. implements sugar tax
Sugar tax on variety of sweetened beverages took effect Thursday
As Newfoundland and Labrador implements its sugar tax, some retailers are scratching their heads, saying they have more questions than answers.
Effective Thursday, the new tax will add 20 cents to the cost of a litre of a wide range of sweetened beverages. While the provincial government says the tax will improve public health by discouraging the consumption of sugar-laden drinks, critics say it will disproportionately hurt low-income earners — and some retailers say they are still unsure how the program works.
Alex Mugford, manager of the family-owned Mae's Variety in Conception Bay South, says his family have been left wondering what they have to do, thanks to what he says is lack of communication from the provincial government.
"The only information we have been given was an email from one of our wholesalers," said Mugford.
"It contains a link to the government website, which has some promotional material that we can print off. They sent a sample invoice for us to see what all future invoices will look like. As from receiving information from the government, we received none. We were expected to go and find the information ourselves."
Of the information Mugford managed to find, he says it appears as though the business will have to make monthly payments.
"We have to calculate what we sell per month, and then we have to write a cheque to the government and send it in," said Mugford. "We have to start tracking things a lot more closely."
On Thursday afternoon, Victoria Barbour, media relations for the provincial Finance Department, sent CBC information that included a link to a document she said has been available since March.
It says the provincial government collects the tax at the wholesale level, but most retailers must "levy and collect the sugar-sweetened beverage tax from consumers and pay over the tax amount collected to the registered wholesaler, as per the wholesaler's invoice."
Still, Mugford said he remains unsure how the rollout of the sugar tax will alter business practices in the long run. He expects the process to be confusing for businesses and consumers alike.
"Information is king in these types of businesses," said Mugford. "They know how to contact us. I would love a little information packet sent to us explaining everything in detail [about how] we can implement this. This is a confusing and unnecessarily complicated tax."
Mass confusion
Lynn Boyd, who owns Boyd's Convenience in Main Brook, says she has had little contact with government officials and has been left bewildered.
Boyd says there were better ways to implement the tax, which she thinks isn't necessary at all.
"I think they should have put it as a two or three per cent tax increase, [rather than] being all over the place," said Boyd. The percentages don't make sense. Seven cents on a can of drink, but 40 cents on two litres? When you're a small store and you check everything in manually, I haven't got a button to program all this in.
"How do you memorize what changes and what it means? There's going to be a lot of confusion."
Speaking in mid-August, at the launch of a government campaign urging people to reconsider their drink choices, Finance Minister Siobhan Coady said retailers had "been working towards becoming ready for it, because they know in legislation it is a requirement for them to be ready for it for September."
"It's the way we collect tax for cigarettes, for example. So they're used to the process, they just have to develop their processes and develop their technology so that they can remit it to government," she said.
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