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NEWFOUNDLAND SUGAR TAX UPDATE

PROVINCE AMENDS REGULATIONS EFFECTIVELY ELIMINATING SSBT

We have previously blogged about the enactment of Newfoundland and Labrador’s (“Newfoundland”) Sugar Sweetened Beverage Tax (“SSBT”) in late 2022 here, and provided an update on the SSBT’s interaction with the collection of GST/HST here.  In just a period of three years, Newfoundland has switched course and recently chosen to effectively eliminate the SSBT through an amendment to the Revenue Administration Regulations (the “Regulations”).

SSBT Background

The SSBT had been in force since September 1, 2022, applying tax at differing rates to three categories of products: 1) ready-to-drink beverages; 2) dispensed beverages; and 3) concentrated drink mixtures.  Interestingly, the tax levied did not depend on the amount of sugar in the product, with tax instead being levied at amounts ranging between $0.20 per litre and $2.00 per kilogram depending on the type of product in question.  Accordingly, two canned soft drinks would be taxed at the same rate even if one contained ten times the sugar of the other. 

Similar to the regime for other provincial excise taxes, wholesalers (and certain retailers) were required to register for and collect/remit the SSBT.

Newfoundland Regulation 41/25

The elimination of the SSBT was achieved through an amendment to section 21.1 of the Regulations, which previously provided exemptions from the SSBT for a number of products. Now, amended section 21.1 provides a blanket exemption from the application of the SSBT for all sugar sweetened beverages. Consequently, the SSBT will no longer be levied on sugar sweetened beverages in Newfoundland.

Refund Opportunities for Retailers

The elimination of the SSBT took effect on 12:01 am on July 1, 2025, at which point wholesalers and retailers should have ceased charging SSBT on their products.  Retailers that maintained an inventory of sugar sweetened beverage products at the time indicated above and in which they paid SSBT on those products may be eligible for a refund. 

The Newfoundland Tax Administration Division has made the relevant forms for claiming refunds available online.

Experienced counsel can assist any retailers that are uncertain regarding their eligibility for a refund of SSBT, and also help in preparing refund applications to ensure accuracy and maximize recovery of SSBT paid.

Takeaways  

The elimination of the SSBT may be seen as a positive development for taxpayers in Newfoundland that enjoy sweet beverages, despite its laudable goal to improve health outcomes in the province. 

Retailers may be eligible for a refund of any SSBT paid on inventory they maintained as a of 12:01 am on July 1, 2025, when the enabling amendment to the Regulations took effect.  Retailers considering a refund application for SSBT should seek legal advice from experienced counsel to navigate the intricacies of the SSBT refund process.

For help with a refund application of SSBT, click here.

Download a PDF copy of this Blog here.