Carbon levy exposes double standard
Tobacco tax money is not being used for anti-smoking efforts, writes Les Hagen.
The Alberta government’s ambitious new carbon levy highlights a disturbing and devastating inequity in the taxation and reduction of the leading avoidable cause of disease, disability and death in the province.
The lion’s share of the new carbon revenue is being justifiably reinvested in strategies to reduce carbon emissions. However, there is no similar reinvestment of tobacco tax revenue in efforts to reduce tobacco use.
Not a single dime of the $1 billion in tobacco taxes collected annually by the Alberta government is structurally reinvested in preventing youth from getting hooked or helping smokers to quit.
The Notley government refused to apply any of the last tobacco tax increase in 2015 to the woefully underfunded and largely unimplemented Alberta Tobacco Reduction Strategy despite strong calls from prominent health organizations. Instead, the government applied every penny of the $84 million in new revenue to general operations while allowing the tobacco reduction strategy to flounder.
To add further insult, in 2015, the Notley government quietly ushered in a new levy on mobile phone usage to help sick and injured cellphone users obtain prompt medical treatment when needed. In other words, the government is prepared to reinvest new taxes to help get people to the hospital, but it has refused to apply any tobacco tax revenues to keep people healthy and out of the hospital.
Ironically, the New Democrat opposition repeatedly urged the previous government to apply tobacco tax increases toward tobacco reduction measures. However, the New Democrat government has yet to follow this good advice.
The Notley government has another opportunity to right this wrong in the 2017 provincial budget by increasing tobacco taxes and reinvesting a portion of the proceeds in tobacco reduction.
Tobacco tax increases are the single most effective means of reducing tobacco use, especially among youth. Every 10 per cent increase in the price of cigarettes corresponds with a three to four per cent decline in consumption among adults and a six to 12 per cent decline among adolescents.
Alberta has witnessed the remarkable impact of tobacco taxes. In 2002, the Klein government increased cigarette taxes by $2.25 per pack and tobacco sales plummeted by 24 per cent the following year, with 40,000 smokers leaving the market completely. Youth smoking rates also fell from 24 per cent to 19 per cent in the year following this tax increase.
Unfortunately, Alberta’s tobacco taxes have not kept pace with other provinces, and cigarettes are still relatively affordable due to suppressed tax rates and high wages. Alberta has the highest wage levels among all provinces and taxes on cigarettes currently rank seventh among 10 provinces — well below the national average.
As a result, Alberta has the most affordable cigarettes of any province and our smoking rates are well above the national average. It takes only 22 minutes of labour for Albertans aged 15 and over to purchase a pack of 20 cigarettes, versus 33 minutes in Manitoba.
A tax increase of at least $1.50 per pack of 20 cigarettes is required to bring our affordability levels in line with British Columbia. An increase of $2 per pack is needed to match Saskatchewan’s affordability levels.
The Alberta Tobacco Reduction Strategy will not achieve its ambitious 10-year targets without a meaningful and sustained investment. The floundering strategy has only been partially implemented since it was launched in 2012.
Without fully funding this strategy, and simultaneously reducing tobacco affordability, the Alberta government and the public health community will continue to fight tobacco use with one hand tied behind their backs.
We urge the Notley government do the right thing and lift the tremendous burden of tobacco use by reducing tobacco affordability and reinvesting tobacco taxes in tobacco use reduction. What’s good for carbon reduction is also good for tobacco reduction. Albertans deserve better.