Senate
Session 2018/2019
1 speech
March 27, 2019
Official Hansard Report - Senate
Download PDF transcriptSession Summary
Simplified for YouThe Senate passed major updates to Bermuda's 45-year-old liquor licensing laws, combining three separate licensing authorities into one and creating new permits for catering events and special occasions. They also approved increasing the sugar tax from 50% to 75% on sugary beverages and candy, while adding chocolate products to the tax for the first time. The sugar tax changes were made to combat Bermuda's obesity crisis, where 75% of adults are overweight and diabetes costs the health system $78 million annually.
Key Topics
Changes to liquor licensing laws to modernize the system and allow alcohol at events like destination weddingsIncrease in "sugar tax" from 50% to 75% on sugary drinks, candy, and adding chocolate to the taxStreamlining liquor licensing from three separate authorities into one single authorityNew permits for restaurants to serve alcohol at catering events and food trucks
Bills & Motions
Liquor Licence Amendment Act 2019 - passed all readings and became law
Customs Tariff Amendment Act 2019 - passed second reading (sugar tax increase)
Notable Moments
Attorney General noted the Governor supported the liquor licensing changes, saying they were "not substantive"
Senator Richardson revealed some retailers inappropriately raised prices on non-sugary items like eggs, blaming the sugar tax
Senators expressed concern about price gouging and the need for better monitoring of retailers
Debate Transcript
1 speech from 1 speaker
Madam President.
Thank you.
The President
Thank you, Senator Jardine. Would any other Senator care to speak on this Bill? No? Then Madam Attorney General, there are a few questions. You have the floor. Sen. the Hon. Kathy Lynn Simmons: Thank you, Madam President. With regard to the enforcement provision, there is no intention for any …
Thank you, Senator Jardine.
Would any other Senator care to speak on
this Bill?
No? Then Madam Attorney General, there are
a few questions.
You have the floor.
Sen. the Hon. Kathy Lynn Simmons: Thank you,
Madam President. With regard to the enforcement provision,
there is no intention for any inspector to have the
powers of the police. What is necessary is for the police to be informed, so the oversight with the minister ial appointments in terms of inspectors is simply to gather the information necessary for enforcement. So there is no intention to extend those powers.
With regard to the simplification of the pr ocess, all licences will be subject to the same simplified process.
With regard to the online application process,
this is being worked on. What we are going to do is
probably allow this session to continue as is while we
make t he amendments that are necessary. The pr ocess is quite extensive, as I said earlier, and the Senior Magistrate has basically undertaken to streamline the administrative part of it during the upcoming ses-sion. So not every applicant will be required to go before the committee and that is because some of them
are just renewing. And so when we have new appl icants it will be imperative for us to ensure that they
have in place [all that] is necessary, Madam Pres ident, to ensure that they are in compliance.
With regard to the various categories of licences, and it does seem quite intricate when you look at the Act, what is important to note is that there are different levels of compliance necessary for the different classes. Because a major event requires, for instance, more security and more oversight, and so
what we are trying to do . . . I mean, there was the
thought to actually streamline it so that we have one licence. But the different activities surrounding the sale of alcohol . . . there are just so many i ssues.
But what we try to do is balance the economic
interest so members of the public can choose to engage in this as a business enterprise with the preve ntion aspect. And therein lies the challenge. And so
during the process of formulating the Bill, wha t we had
when I came into office was various vendors who sent
in their concerns , particularly with respect to wine tas ting and other such activities, which were improperly
regulated. And in order to maintain the balance of the
economic advancement of businesses, as well as the
prevention in deterrences we actually had to make
specific provision for the categories of licences and
permits which were out there and not properly reg ulated. So there you see the itinerant licence and the
like that we have.
With regard to persons understanding the
rules, it is imperative that we have the guidance prov ision. And so as we go along the road to further modernisation, I will be issuing guidance to ensure that everyone understands what this process involves and
what the expectations are with regard to compliance.
So what we have today is the first step toward
modernisation . And I am extremely keen to refine the
process , because that is where I think we are having
most of the challenges in terms of persons who want
to engage. But I will say that it is incumbent upon ap446 27 March 2019 Official Hansard Report
Bermuda Senate plicants to make sure that they actually follow the pr ocesses that are in place, because we have had in the
past many complaints coming from industry . But when
we delved down into the actual problems , we foun d
that people were actually breaking the rules —the applicants were applying late, they were not necessarily
in compliance— and what we are going to do as we
would do with any new policy is exercise some oversight and monitoring to see where we may have to
further refine, issue guidance, and aid the process.
The President: Thank you, Madam Attorney General.
Sen. the Hon. Kathy Lynn Simmons: Mm-hmm.
The President: Now, your second reading.
Sen. the Hon. Kathy Lynn Simmons: Thank you,
Madam President.
I move that the Bill be now read a second
time.
The President: Is there any objection to that motion?
No objection.
Carry on.
[Motion carried: The Liquor Licence Amendment Act
2019 was given a second reading.]
Sen. the Hon. Kathy Lynn Simmons: Am I suspending Standing Order 26?
The President: Yes.
SUSPENSION OF STANDING ORDER 26
Sen. the Hon. Kathy Lynn Simmons: Madam Pres ident, I move that Standing Order 26 be suspended
with respect to the Bill.
The President: Is there any objection to that moti on?
No objection.
Carry on.
[Motion carried: Standing Order 26 suspended.]
BILL
THIRD READING
LIQUOR LICENCE AMENDMENT ACT 2019
Sen. the Hon. Kathy Lynn Simmons: Thank you,
Madam President .
I move that the Bill entitled the Liquor Licence
Amendment Act 2019 be now read a third time.
The President: Is there any objection to the third
reading? No objection.
Sen. the Hon. Kathy Lynn Simmons: Thank you,
Madam President .
I move that the Bill do now pass.
The President: It has been moved that the Bill ent itled the Liquor Licence Amendment Act 2019 do now
pass.
Is there any objection to that motion?
No objection. The Bill is passed.
Thank you, Madam Attorney General , and
Senators.
[Motion carried: The Liquor Licence Amendment Act
2019 was given a third reading and passed.]
ANNOUNCEMENT BY THE PRESIDENT
SENATE VISITOR
The President: We will now move on to the second
reading of the Customs Tariff Amendment Act 2019, and before we actually do I would just like to
acknowledge i n the Gallery the presence of the Permanent Secretary of Health, Mrs. Jennifer A ttrideStirling, and also the parliamentary counsel, Dr. A nthony Richardson. Welcome to you.
Senator Richardson, this is your Bill? You
have the floor.
Sen. Anthony Richardson: Good morning, Madam
President.
The President: Good morning.
Sen. Anthony Richardson: Hello Senators and
members of the listening public.
BILL
SECOND READING
CUSTOMS TARIFF AMENDMENT ACT 2019
Sen. Anthony Richardson: Madam President, I
move that the Bill entitled the Customs Tariff Amendment Act 2019 be now read a second time.
The President: Is there any objection to that motion?
No objection.
Carry on , Senator Richardson.
Sen. Anthony Richardson: Thank you, Madam President.
I am pleased to invite Honourable Senators to
give consideration to the Bill entitled Customs Tariff Amendment Act 2019.
Bermuda Senate Madam President, the Bill proposes to amend
the Customs Tariff Act 1917, the principal Act, with
measures that include (1) increase to the duty rate to
75 per cent for food and beverage items affected by
the sugar tax on the 1st of April 201 9; and (2) apply
the above- mentioned duty rate to chocolate and c ocoa preparations containing added sugar.
These measures affect the First Schedule of
the principal Act. I am pleased to be speaking on behalf of the Minister responsible for the policy initiative pertaining this amendment.
Madam President, in June 2018, the Gover nment introduced, as promised in the Throne Speech
and the Budget Statement, an increase in the duty
rate on sugar -sweetened beverages, candies and
pure sugar. These proposals were outlined in detail in
the Health Ministry’s Sugar Tax Consultation document and subsequent reports.
Madam President, in June 2018, the Minister
advised the public that Bermuda’s new sugar tax
would be phased in gradually. On 1
st of October
[2018], a 50 per cent duty rate was implemented on
the said items, as part of a tr ansitioning phase. Today,
it is proposed to raise the duty rate on the said items
to 75 per cent from 1st of April 2019. In addition to the
full 75 per cent duty rate implementation, chocolate is
proposed to be included in the tariff as of 1st April
2019 also at the 75 per cent sugar tax rate.
Madam President, Bermuda’s food system is
an interconnected network of providers, servers and consumers. Accordingly, p olicy changes in one area
can affect all parts of the network . Government is determined to take progressive steps to influence a cultural shift toward healthier food choices in Bermuda in order to tackle our obesity and chronic disease epidemic.
Unhealthy weight is a leading risk factor for
chronic diseases such as heart disease, diabetes,
kidney dise ase and cancer, as well as health pro blems like hypertension and stroke. It is estimated that diabetes and kidney disease currently account for
10 per cent of the country’s total health spending.
Madam President, this means just two lif estyle-induced prev entable conditions are costing us,
Bermuda, $78 million. This has to stop. The sugar tax is an important part of the measures needed to
change choices and behaviour.
Madam President, three out of four adults in
Bermuda are overweight or obese, and Government wants to emphasise HEAL—Healthy Eating and A ctive Living. The elements of HEAL go hand in hand,
but it is almost impossible to exercise yourself out of
an unhealthy diet.
The World Health Organization recommends
that free sugar should be limited to l ess than 5 per
cent of the daily energy intake, or less than 25 grams
of sugar per day. Madam President, this means that a
single soda—I underscore single soda —already exceeds the World Health Organization’s recommended daily intake. And since 50 per cent of adults in Bermuda drink at least one sugary drink a day (I started
to smile) , we can begin to appreciate how it may co ntribute to 75 per cent of our population being overweight or obese.
As an aside, Madam President, when we talk
about “obese” we think of it as being like just a co mpletely negative thing, but I did not realise until recent-ly that it is not like this gross overweight, it is amazing
the degree to which people can be deemed to be
obese from, I guess, a medical perspective.
The President: Mm-hmm.
Sen. Anthony Richardson: Which is more than I
would have thought.
But, Madam President, in one Hamilton gr ocery store, the grocer has affixed blue labels under
sugar -taxed items that state, “This item has been affected by the sugar tax.” (And I am going to come back to that later on, by the way.) In one aisle alone, the Minister counted 28 labels, and wants to thank the
grocer for putting out these labels since it increases
awareness. The advice? If your shopping cart and
daily diet includes one or more of those items, it is
likely that you need to rethink your drink or change
your diet.
It is sobering to recognise how many sweetened, calorie- dense food and drink items have flooded
our grocery stores and diets. Items that were prev iously consumed i n moderation (i.e., candies) or as
treats have become regular fare. Bermuda, we are immersed in an obesogenic environment, and it is going to take awareness, vigilance, and hard work to
change that for the better.
Madam President, the World Health Organiz ation proposes the use of taxes as part of a broad
strategy to prevent obesity and non- communicable
diseases, including type 2 diabetes, to improve health outcomes and direct persons towards healthy options. For instance, the World Health Organization has r ecommended that sugar -sweetened beverage taxes
should be designed to increase retail prices by 20 per
cent to meaningfully impact health. Indeed, a number
of other jurisdictions have introduced measures in r ecent years, and studies before and since the int roduction of sugar taxes have shown that they help to r educe consumption of these products. And I am sure there will be some comments in a minute in terms of
whether this really works, but in any event . . .
A recent study published on the 30
th of Jan uary 2019, showed that the Barbados sugar -sweetened
beverage tax of 10 per cent, introduced in June 2015,
increased the retail price by 5.9 per cent and decreased sales by 4.3 per cent. I want to emphasise
that, or repeat it, in that the beverage tax of 10 per
cent, caused the actual retail prices to increase by 5.9 per cent (i.e., less) and decrease sales by 4.3 per
cent. At the same time, sales of non- sugar -sweetened
448 27 March 2019 Official Hansard Report
Bermuda Senate beverages increased by 5.2 per cent, with bottled w ater sales going up by 7.5 per cent, which is encouraging from a health perspective. In other times, when it
comes to numbers, it is like, just numbers. But the
reality, this is saying that by increasing the price of these goods, there was less consumption and more
healthy alternatives were used i nstead.
While sugary drinks have been the focus of
the sugar tax in most other jurisdictions, the tax pr oposed for Bermuda includes items such as candies,
which now includes chocolate and plain sugar. The goal is to curb unwanted consumption of these foods ,
which contribute no nutritional value to our daily diets.
As a reminder, the Health Department’s full
consultation report on the sugar tax is published on their website. I actually have a copy of it here. Madam
President, there were 351 responses to the consult ation. The findings of the consultation supported the implementation of a sugar tax, with most respondents
indicating that the tax would change consumers’ behaviour. Again, I smile, because you wonder who the respondents would have been, but anyway . A clear
majority of 60 per cent said that candy should be
taxed, and many questioned why chocolate was not
included. That is why we are now including chocolate.
There was broader support from the consult ation for the tax to be introduced at 75 per cent duty, on
the suggested items, and that is why we are now proposing to implement the full 75 per cent duty rate. So
those who responded wanted a significant tax on these chocolates and candies, and what have you.
Sugar and sugar -sweetened items have become more
expensive at retail locally, and the increase has
prompted greater awareness and adoption of healthier
buying habits. There continues to be much support for
the sugar tax. And the Minister has received lett ers of
thanks from persons who have been motivated to
drastically reduce their daily sugar intake and intr oduce high fibre and lean protein with every meal. Some amazing results, including diabetes reversals,
are possible, and they are being achieved.
Madam President, I will pause here to make
the statement that there has been some concern in
response to the sugar tax that some retailers are actually increasing prices unnecessarily. The most
alarming . . . and I say that anecdotally because I just
cannot be lieve this. But anyway, that in one instance
the price of eggs has increased, supposedly, in r esponse to the sugar tax, which, clearly, makes no sense. And so in my role as the chair of the Price
Control Commission, I have been asked to monitor
any unneces sary increases in prices, which may r elate to actual price gouging.
And for Senators and members of the public,
the idea is that . . . let’s assume it is a chocolate bar
that is bought overseas at $1.00. When you import it, of course, it is going to be . . . the prices for shipping
and duty and the rest of it, the cost of duty is not on that, it is on the original purchase price. So it is going to be inappropriate if the retail price of a chocolate
bar, a big chocolate I would say is $2.00, it is going to
be inappropriate if the retail price increases by 75 per
cent as a result of this sugar tax. And that is what we are going to be looking into. Also, to make sure that the items that do not contain sugar are not used as an
excuse for these increases.
And I am saying that because as part of the
Price Control Commission, the challenge was how do you monitor things and, you know, we cannot put in
place price controls, per se, but there is the respons ibility to ensure that there is not any unnecessary price
gouging from this process. And so I am letting ever ybody be aware that we are going to look at this in a
proactive way to ensure that there is not the inadver tent increase in prices.
Madam President, the three most important
decisions that we all make for our health every day
are breakfast, lunch and dinner. How many ate breakfast today? The Government has already eliminated
duty on potatoes, cauliflower, broccoli, turnips, carrots, oranges and apples (I don’t see grapes) to fur-ther support healthier nutritional choices, showing that
this Government is absolutely committed to improving
our diets. And so the comment that healthy items are
too expensive for us to consume, the Government’s
response has been to eliminate the duty.
And, again, the commentary has b een, When
Government puts in place these regimes, do the i mporters reflect the reductions in their prices? And so,
realistically, unless something has changed with the
base price, the price for potatoes, cauliflower, brocc oli, turnips, carrots, oranges, and apples, for example,
should reduce if the duty on those items has now
been reduced.
As the Government indicated in a previous
Budget Statement, the additional revenue collected
from the sugar tax is to support the promotion of
healthy living initiatives. Since the October 2018 i mplementation, the value of imported goods fell by
24 per cent, representing a decrease of $1.2 million.
While it is still early days, and we will continue to monitor, it may well indicate that importation of these item s
fell during the first five months of the implementation. If this reflects reduced consumption of sugary items, then this is good news. But we have to monitor for a
longer period, together with behavioural surveys of
consumption, to see the impact conclus ively.
I know I am taking a while this morning, Ma dam President, but I will also say that for the longer
period, we have to see whether or not the importers stockpiled before the tax came into play, because that
would have the same impact in terms of there would
appear to be a reduction, so we have to monitor this
for an extended period, as the brief says.
Nevertheless, despite the reduced imports,
and there was a net gain in duty of $695,000 for the affected items, that is a 66 per cent increase in duty
despite reduced imports. So it may be having the i nBermuda Senate tended impact. I emphasise that it is early days, but so
far the figures are promising.
The additional funds generated by the sugar
tax will be allocated to support healthy living initiatives
as they are dev eloped. And that is another question,
Well, Anthony, with the sugar tax in place, where has the money gone? Pardon the grammar, but that is
what they have asked. And the answer is, to date, the
additional revenue has helped to offset a $200,000
reduction i n revenue from duty losses arriving from
the reduction of duty on healthy items of 0.0 per cent
duty. So there is no more duty coming in from the ot her things I talked about just now, and some of the
sugar tax has gone to offset that so the Government
does not have a net negative revenue.
Also, nutrition labelling on menus and vertical
farming have been identified as initiatives that will be
supported. And so the rally cry is, If you are interested
in vertical farming l et it be known. Let’s get that going.
This continues to be work in progress as potential initiatives develop further. Madam President, I
welcome and encourage entrepreneurs to tap into the
public’s increasing demand for healthier alternatives
with reduced or no sugar. A market exists for this , and
more and more products can be seen on many retai lers’ shelves reflecting the changing mood and taste of the population.
The consultation process also noted that local
businesses were concerned that taxing sugar would make it more expensive for them to do business, as
their goods will be more expensive than imported
goods. Local preparers of foodstuff have been given
the opportunity to apply for concessionary rates from the Minister of Finance, under the existing provision
for commercial manufacturers of goods. And I asked
about that because I know sometimes for small bakers, in particular, it is a very cumbersome process. We
have been informed that at least two businesses, well -
known businesses, have applied and were approved by the Minister of Financ e to be included in the Customs Tariff Approved Organisations Notice of 2019,
which is Crow Lane Bakery and Dunkley & Pioneer
Dairies Ltd.
And I say that because persons have actually
asked about that and my response is to do what they need to do to regis ter so they can at least reduce their
costs and carry on, you know, whatever they are doing. Especially because we know that there are so
many either small or home- based bakeries that, in my
opinion, have excellent goods and you would not want those prices to increase unnecessarily.
So, Madam President, the department will
monitor consumption levels through health surveys
and imports. The first price survey was completed in
the summer of 2018 and will be repeated this summer. The STEPS survey will be repeated in 2019 and will monitor overweight and obesity to evaluate
whether our interventions are making the difference
we need. Before I conclude, Madam President, I want to
give recognition to the staff at the BLDC because yes-terday . . . this was a huge point of discussion, some
of the points I am making today, and they helped to bring some clarity. And I had to try to reassure them that, yes, healthy alternatives are available and spec ify that Government has in fact reduced the duty on
what are deemed to be healthier alternatives.
So, Madam President, the Government r emains committed to reducing chronic diseases and
lifestyle -related health problems in Bermuda and we
encourage all residents to make a personal commi tment to doing the same.
Thank you, Madam President.
The President: Thank you, Senator Richardson.
Would any Senator care to speak on this Bill?
Senator Jardine, you have the floor.
Sen. James. S. Jardine: Everybody is shrugging, so I
guess I will jump in.
[Laughter]
Sen. James. S. Jar dine: As a chocoholic —
[Laughter]
Sen. James. S. Jardine: —obviously, a 75 per cent
tax on chocolates that I previously enjoyed is going to have a significant impact. There is no question. In addition to my wife who watches very carefully what I eat.
[Laughter]
Sen. James. S. Jardine: So from my point of view,
the sugar tax, I think, is something that is very wort hwhile.
I know we had a debate back in June, I believe, when we passed the first amendment Bill, about
sugar tax and the effects that it is having in various
countries around the world. And just very briefly,
Madam President, I wanted to recall some of the
facts. I had a quick look on the Internet for any u pdates, but certainly in France, when they introduced
the sugar tax on soft drinks there, it had a significant
impact in terms of the amount of consumption of soft
drinks. Belgium, not so much of an effect, but i t did
have [some effect]. And the United Kingdom, it has had an effect.
What is interesting to note is that the United
Kingdom is now pushing forward, as I understand it,
with a sugar tax on chocolate, which, as you can i magine in the United Kingdom, is a significant step for
them. Chocolate is a major part, unfortunately, I
guess, of children’s diets over there. It has become so. So, the United Kingdom is moving forward with it
450 27 March 2019 Official Hansard Report
Bermuda Senate and I guess one could say, well, maybe Bermuda is
taking the lead on this, whi ch is a good thing.
So, from my point of view, I understand that
obviously a 75 per cent increase in the duty on choc olate is going to, I think, have a significant impact on
the consumption of chocolate. It will impact busines ses that use sugar. And we have heard from the Senator the consideration that is going to be given to small
family businesses which produce home- baked goods
and other businesses with respect to that 75 per cent
tax.
I was pleased to obviously hear about the r eduction to 0.0 per cent on duty on healthy foods, because that is a major issue. If you shop regularly in the food stores, and my wife does not let me shop, because I always buy things that are not on the list.
[Laughter]
Sen. James. S. Jardine: But if you look at the price of
healthy foods in most food stores, they are very, very
high. And so those with a limited budget are reduced
to buying things that are not quite so healthy simply
because they cannot afford the more healthy foods.
And so that is good news to hear that duty on things
like cauliflower and other vegetables is coming down.
I would encourage Government to continue to look at other areas of food stuffs in the grocery stores to see
what other foods, more healthy foods, they can r educe the duty on.
I was also pleased to hear the Senator talk
about controls or reviewing price gouging, because
that is a real concern, where prices of certain goods may go up prior to the implementation of some of
these additional duties. And we want to make sure
that the benefits that are supposedly being passed on
to the consumers are indeed being passed on. So I
was pleased to hear that the Price Control Commi ssion is going to be looking at that to hopefully prevent any price gouging that might take place.
So, Madam President, I think on balance, I
was certainly in favour of the changes that are being recommended here to the customs tariff with respect to breakfast cereals that have a lot of sugar in them,
other baked goods that have a lot of sugar, and I can
see my consumption of c hocolate bars disappearing
into the past.
And so with those few words, Madam Pres ident, I support this legislation.
The President: Thank you, Senator Jardine.
Would any other Senator care to speak?
Senator Robinson, you have the floor.
Sen. Dwayne Rob inson: Thank you, Madam Pres ident.
Regarding the sugar tax, I believe most of us,
if not all of us, agree with the fact that we need a
healthier population and that, you know, there needs to be more emphasis put on sugary items. My only
concern regarding this sugar tax was that it did not
come with an accompanied breakdown of exactly
where the percentages were going to go, and a national plan to combat sugar usage, and overeating in things that do cause diabetes.
So, I do support the endeavour to create a
healthier population, but I do think that taxes like these should be paired with a national plan that
should have been presented to the people of Berm uda so that they could know exactly where those tax
breakdowns were going and what initiatives were
[com ing] down the pipeline so that it showed that
there was preplanning and that it was a dedicated tax
initiative that was meant to better the people of Bermuda.
So, that would be my only concern. I look forward to seeing a national plan to combat diabetes and the support of initiatives that are already combating
diabetes. And I also look forward to seeing a precise
breakdown of how those initiatives will be funded and
how the sugar tax percentages will be divvied up.
Thank you, Madam President.
The Presiden t: Thank you, Senator Robinson.
Would any other Senator care to speak?
Senator Kempe, you have the floor.
Sen. Nicholas Kempe: Thank you, Madam Pres ident. And thank you, Senator Richardson, for the i ntroductory statement.
I have a few questions about the logistics of
the Bill as well as the carveouts. I note that the general intent of the Bill is to curb behaviour by affecting
price through importation duties. We are all aware of
the prevalence of diabetes in Bermuda. And one of
my first set of questions comes around behaviours developed in childhood.
And I just wanted to understand if there was
any research or anything that supported the carveout for sugary breakfast cereals, which is obviously a
main breakfast item for yo ung children. Certainly, as
you get older, perhaps, you start to eat more eggs and
this kind of thing, but for young children the fact that
there is 0.0 per cent custom duty on sugary breakfast cereals feels a bit like a missed opportunity to affect
behavi ours there.
I also wanted to ask about the . . . if we look at
section . . . where are we in the Bill? Section 2(3)
where it refers to custom tariff heading 22.02, and it
tackles beverages that have added sugar, but it does not affect the fruit or vegetabl e juices under heading
20.09. I note that under heading 20.09 of the Customs
Tariff that there is only a 5 per cent duty on fruit and
vegetable juices, whether or not they contain added
sugars. So, again, it feels like the . . . whilst people
might be turn ed away from water with even a small
amount of sugar in it, there is going to be no matching price change on fruit juices that could have an exBermuda Senate traordinary amount of sugar in it as the customs duty
on heading 20.09 is only 5 per cent.
I also worry about, again, without the accompanying communication plan or whatever, that when
you look at . . . if you squeeze a juice from a fresh orange at home, you get approximately two ounces of
juice out of it. However, you standard to- go size fruit
juice contains about 1 0 ounces of juice and can have
23 grams of sugar even though there is no added sugar in it. Compare that to a Coke that has about 39
grams of sugar. So it feels like there is a bit of a missed gap there, and I just wanted to get some clar ity around that fr om the Senator.
I am also looking at the way in which the duty
is levied in the case of any solid imported food stuffs, i.e., not liquid. It seems to be, and I would accept clar ification here if I am misreading this, it seems to be per kilo of food, as opp osed to per kilo of sugar, which
would mean, if I am interpreting this correctly that, for
example, a Kind nut bar that has 5 grams of sugar in
it, will see the same price increase as a Kind nut bar that has 9.2 grams of sugar in it. So it would seem
that it is not assisting people to direct their choices
toward the healthier of two options, in this case. It
simply is going to drive up the price of any food stuff
that has any added sugar in it.
I also wanted to talk about the logistics of
shipping and the exemptions as it relates to small businesses. It is all well and good that the largest i mporters can apply for the tariff exemption when they
do their own baking, but for most of the small bus inesses that engage in baking in Bermuda, they buy
their sugar fr om the wholesaler. And by the time they
go and purchase it, the sugar has already been i mported and already had a customs declaration filed.
So it becomes very onerous and expensive to
then go back and file further declarations to get the lower duty rate on the smaller quantities of sugar purchased by home bakers, which again, kind of makes it harder as a local producer to get these benefits that
have been kind of put in after the fact.
So I just want to kind of highlight that I am
worried about the actual impact for the small producers because unless they import their own sugar direc tly from overseas and file their own customs duty dec-laration, it is going to be very challenging for them to actually benefit from these carveouts.
ANNOUNCEMENT BY THE PRES IDENT
SENATE VISITORS
The President: Thank you, Senator Kempe.
Before I pass on to the next Senator who
wants to speak, I would just like to acknowledge in the
Senate the Junior Minister of Finance, the Honourable
Wayne Furbert. As well as the Financial Secretary,
Mr. Anthony Manders. Welcome to you both. I think Senator Michelle Simmons, you have
the floor.
[Customs Tariff Amendment Act 2019, second reading, continuing]
Sen. Michelle Simmons: Thank you, Madam Pres ident.
I just have a brief comment and a question. I
will first say that I applaud the Government for moving
forward with this next stage of the sugar tax. Yes, it
will hurt because some of us will become more conscious of the fact that we have to pay a lot more to
indulge in things that we probably know we should not
be indulging in anyway. But, so be it.
I would also like to encourage the Gover nment to go even further with one aspect of what they
are doing. And that is with regard to further customs duty relief for fresh fruits and vegetables. The reason I
am asking them to go even further and provide more
relief on fresh fruits and vegetables is tied to a word that was used earlier, and that is “obesogenic.” I went
straight away to the Internet and I found a paper here.
It is written by the University of Nevada Cooperative
Extension. And it says at the top, “What is an ob esogenic environment?” And I would just like to quote a
small section of this. May I, Madam President?
The President: You certainly may, Senator Simmons.
Sen. Michelle Simmons: It says, “ The term ‘obesogenic environment ’ refers to ‘ an environment that
promotes gaining weight and one that is not cond ucive to weight loss ’ within the home or workplace . . . .
In other words, the obesogenic environment refers to
an environment that helps, or contributes to, obesity.
Focusing on modifying the obesogenic environment at
the community and policy level can impact the community residents at large. These changes could i nclude access to heal thy food and ac cess to places to
be physically active . . . .”
So one of the things that we have to continue
to strive for is making sure that as many people as
possible have access to healthy food. And that access
can only be provided if the prices of some of the
healthy foods are lower.
I agree with us trying to [ have an] impact on
thinking and habit by taking away, in a sense, access
to the sugary foods, but unless that is supported with
us providing better access to healthy foods, then it may not have as great an impact on thinking in the
community as we would li ke. So, my plea, once again,
to Government is, please consider going even further
in reducing customs duties on more healthy veget ables and fruits. And with that, Madam President, I will
end my remarks.
The President: Thank you, Senator Simmons.
452 27 March 2019 Official Hansard Report
Bermuda Senate Would an y other Senator care to speak on
this Bill?
Senator Campbell, you have the floor.
Sen. Vance Campbell: Thank you, Madam President.
Madam President, a lot of the discussion
around expense has been focused on individuals pur-chasing and the increased cost they will face. But
when you draw back, Madam President, and you look
from a macro level, a higher level . . . some people
say fly at 35,000 feet. One of the greatest expenses
facing individuals in this country today is the cost of
health.
These products containing sugar, we have
heard, contribute to obesity and other illnesses that
are driving the cost of health through the roof. So, we
can focus on the impact on Vance Campbell when he
buys his chocolate, and I do like chocolate —
[Laughter]
Sen. Vance Campbell: And I am also one of those
people . . . I was shocked to find was obese. I never
considered myself to be obese. But according to the charts, I am.
[Laughter]
Sen. Vance Campbell: Yes, I could afford to lose
some weight, but I never considered myself obese.
But I want us to draw back and stop focusing on our
individual purchase and look at the cost to the country
through health insurance that these products are causing.
Thank you, Madam President.
The President: Thank you, Senator Campbell.
Would any other Senator care to speak? No?
I would just like to make a couple of co mments myself as a health professional in the past and
certainly I am fully aware of the obesity that is in this
Island. I think most of us can remember, way back
when, you looked at people in the community and
they were not obese, they were not fat, young people.
But now what we see is a tremendous increase in the
obesity levels in Bermuda.
And, of course, as a health professional I can
say that I have been exceedingly concerned, as Sen ator Campbell has duly noted, about the cost of health care in Bermuda. If you compare us with the other
OECD countries, Bermuda, next to the United States,
has the highest health care costs.
So I think that if anything is put in place by the
Government to draw attention to what we as individuals and as a population can do to lower the cost of
health care, it is certainly our diet and the sugary drinks, and even when you look at children . . . I am
glad to see in schools that they have programmes when children are involved in activities and recreation. It just warms my heart to see all the activity because
the obesity is not just in the adults, but you have to
start in the schools. You have to start with the diet and
you have to start with education in schools.
So I fully support and commend the Gover nment for bringing this Bill forward.
Senator Richardson, I believe it is over to you
and you have a few questions to respond to.
Sen. Anthony Richardson: Sure. Again, Madam
President, I obviously take the serious nature of what
we are proposing to do, and I will start, I guess, by
underscoring the comment from Senator Campbell in
terms of this Bill is really not an individual Bill, it is a
country -specific Bill. It is for the Island to try to certai nly reduce our levels of un- healthiness. In my mind
right now, to be honest, there is a picture of persons who have amputations.
The President: Mm-hmm.
Sen. Anthony Richardson: And, you know, yes,
there may be some other elements that attributed to
their circumstance, but, clearly, we do not want it to
get to a stage whereby we see an increased incidence
of amputations that are already quite high. And so we
want to be very, very mindful of that.
To add to that, and I take your point, Madam
President, in terms of the children at school do en-gage in physical activity. What I am still surprised at,
though, is that in the middle school and also in the
senior school, they do less gym or PT, or whatever you refer to i t, that activity thing, to the extent where,
you know, “back in the day” we had gym like every week all year round.
The President: Mm-hmm.
Sen. Anthony Richardson: Whereas now, I am like,
Guess what? The comment sometimes is that, We
don’t have gym for an entire term. We deselected gym this term and have it next term. And I am like . . . this
is quite surprising to me.
And we all complain, I guess, around the t able. I did smile when Senator Simmons said that she
immediately went on the Internet to look w hat “obesogenic environment” was. I smile only because that
is an amazing aspect. But for our young people, they
use the electronic devices to an excess whereby on a
Saturday, for example–– we talked about it recently ––
we may be outside running around doing whatever,
where [our young people] would spend the entire day
in front of a TV monitor doing whatever they are d oing.
And so part of it, I believe, is going to be a
shift from the parents’ point of view to stop using the
electronic devices as a convenience for babysitting, effectively. Like, find a way to get outside, get the
children outside, get them engaged. Yes, there are
Bermuda Senate some other attending costs about paying for this, that
and the other, but we have to, I think, do more to e nsure that Bermuda as a country does do more activ ities.
And to add to that also, Members may not be
aware that Government does have initiatives to place
more outdoor exercise equipment throughout the I sland. I am not sure of the extent they are going to do
it, [if not] in all t he parks, but in [some of] the parks.
Again, my bias, being from St. George’s, I know that they have started to do so in the east whereby, you know, there is free equipment and I guess we can engage ourselves in going and working out, you know,
just doing some of those fun things. And some of
those things are actually free.
I know my personal preference sometimes is
to ride a pedal bike, which is not as easy as people think sometimes. When you do it, it is nice. You can
go do [these] things, you know, it’s relatively free and
not too much stress on your body.
Now, I will try, Madam President, to go
through some of the direct questions. Starting with Senator Jardine, I think there is a general lament with
you in terms of there is going to be less chocolates
available.
[Laughter]
Sen. Anthony Richardson: However . . . sorry, Madam President. The good news, though, is that there are, apparently, sugar -free chocolates. And to the extent that there are sugar -free chocolates —
[Crosstalk and laughter ]
Sen. Anthony Richardson: Madam President, I am
being told that nobody wants a sugar -free chocolate.
[Laughter]
Sen. Anthony Richardson: However, Senator
Jardine, that is going to be the option if you want to
keep on consuming without the increased costs.
There was also the question of the impact of
cost to small businesses. And if I may, Madam Pres ident, I want to read a short portion. There is a formal response to that.
The President: Mm-hmm.
Sen. Anthony Richardson: And it is that, approved
bakers or pre -approved manufacturers, bakeries, and
itinerant restaurants will be able to obtain a 5 per cent
concessionary rate on sugar in one of two ways. If
they are importing sugar themselves, they can complete a customs declaration form and take a copy of their licence from the Department of Health with the
declaration and that will enable them to get the 5 per cent. Or, if they are purchasing sugar from another approved business, from a wholesaler, the buyer must
provide the seller with a copy of their licence from the
Department of Health.
So I will go to one of the importers, for example, to buy some sugar. If I have a licence, I will show
them that and I will get the 5 per cent. And then they
in turn have to go to Customs to get their refund. So it
may be a bit cumbersome, to be honest, but there is a
process by which if I am small business and I rely on
the cost of my sugar, I will go through that process to
make sure that I am not unnecessarily impacted.
So, again, to the general public, the sugar tax
is 75 per cent, but for an approved business (let’s call
it) they can get a 5 per cent [tax] instead. Which I think
is quite reasonable.
Sen. Nicholas Kempe: Point of clarification.
The President: Senator Kempe, what is your thought
on that point of clarifi cation?
POINT OF CLARIFICATION
Sen. Nicholas Kempe: Yes, thank you.
I just want to understand. When a restaurant,
or a bakery, or whatever goes to a wholesaler or a
supermart with this kind of proof that they are eligible
for a lower customs’ rate, must the supermart whol esaler give them a discount? Or, is this something that
is agreed between the two parties?
The President: Senator Richardson.
Sen. Anthony Richardson: Madam President, I am
looking . . .
[Crosstalk]
The President: Senator Richardson is obtaining a
response to your question, Senator Kempe.
[Pause]
ANNOUNCEMENT BY THE PRESIDENT
SENATE VISITORS
The President: While we are waiting, I would just like
to acknowledge the fact that we do have represent atives from the Customs Department and Senator
Richardson is obtaining information from them.
And I would also like to welcome the young
people in the Gallery. There are some youngsters
here, actually, who are here observing.
Senator Richardson, you have a response to
Senator Kemp? You have the floor.
[Customs Tariff Amendment Act 2019, second read-ing, continuing]
454 27 March 2019 Official Hansard Report
Bermuda Senate Sen. Anthony Richardson: Yes, Madam President.
The response is that the importer must give
the reduction.
As a process, though, I am going to, as a
small business, I am going to need to prove to the
importer that I do have the exemption. And that is why
I was saying that, to the general public, if you are i mpacted, my suggestion would be to go to Customs and
make sure you go through that proper process, especially if the success of your business is dependent on
the cost of sugar for you.
I want to also say, as a general comment for
everybody present, that I find this process interesting
because a Senator has asked the question, there is a
very detailed response to that, and I do not know if we can easily convey the full answer in this format and
so, again, I say to any person that is impacted,
please, go to Customs and go through the process. It
is going to be very important. So, thank you, Senator,
for asking for clarification.
There was a question, Madam President, in
terms of a strategy, like, I guess, a long- term strategy
that goes with the sugar tax. And the answer is yes,
there is in fact a national strategy on diabetes. And it
is actually available on the Department of Health’s
website and it was published in 2018. So, yes.
There was also a question . . . I know I am
going by multiple Senators [and their questions] at this stage, but there was also a question in terms of breakfast cereals, and the Government has said that they
did not put the duty on all cereals at this stage because they wanted to do some more investigation to
make sure that they can separate out sweet breakfast
cereals from less sweet ones.
And if I may, Madam President, read a formal
response?
The President: You certainly may, Senator Richar dson.
Sen. Anthony Richardson: Thank you.
Following the initial intention, “there was fu rther feedback received and discussed and it was determined to defer the addition until the tariff code
could differentiate between high- sugar cereals from
healthy cereals.”
And so we did not wish to penalise healthy
breakfast cereals and inadvertentl y penalise families
which are trying to do the right thing. So those who
like Honey Nut Cheerios, for example, you can carry
on.
There was also a question in terms of fruit
juices . . . and I am trying to make sure I get this correct. So if they are 100 per cent fruit juices, the duty is
5 per cent based on the nutritional value. So there is
some element in that regard. But I take your point
clearly, Madam President, in terms of the lesser sugar
content beverages should be encouraged to be consumed. One t hing I think we missed, all of us, certai n-ly, is that the least expensive beverage is probably the
most abundant one, which is water, encourage us to
drink more water.
There was also a question in terms of . . . I
actually answered this earlier, about th e duty. The
duty is charged, I said earlier, on the value of what
you are buying, it does not include all of the shipping
and the rest of it.
There was a question . . . I might have r epeated this one, sorry.
[Pause]
Sen. Anthony Richardson: I think that is a repeat.
Okay.
Madam President, Senator Simmons asked
the question in terms of will the Minister of Finance
consider further relief on healthy goods? And I think
that [answer] is yes.
The President: Address the Chair.
Sen. Anthony Ri chardson: Sorry, Madam President.
That answer is yes. For the Government, it is
a question (I think I read this earlier) of ––reducing the
duty on various goods is going to cause a reduction in
Government revenue, and so there will have to be
some offset. Having said that, the consideration also
is what Senator Campbell said earlier, the bigger pi cture. So we have to now do some more work, of
course, to make sure that we can make the correct
decisions in terms of is there going to be a direct cor-relation between reducing the value of so- called
healthy goods to an absolute minimum and how would that be compensated either in reduced health costs or
other revenue.
And I will say again, from my earlier comments, one of the activities of the Price Control Commission is to look at some of Bermuda’s prices. And I
will say again that there is no question of us trying to
impose price control. But there is the intention to ensure that prices are not unnecessarily high or [that
price -gouging occurs]. Because that is not going to be
appropriate either. I know I always use the example of grapes. Grapes are not inexpensive, and the reality is, are they at an appropriate price or not? And unfort unately for all of us it seems as though the grapes are
on the shelves on, let ’s say, a Thursday and by Saturday they are going brown or something. And so we
have to really understand that.
And I was interested to hear also, and I hope I
got this right, that things, for example, like apples, they are actually grown once a year. And so are act ually stored, once they are picked, until they are needed. So it is not as though you pick apples every
month, for example, and so we have to understand
some of the realities of food. We always talk of course in terms of, you know, you have to buy the product
overseas and you got to ship it here and do all these
Bermuda Senate kinds of things. And so, again, the idea now is to try to
ensure that we understand the pricing mechanisms for
the local providers and also to ensure that the consumers are aware of the n ature, you know, the components of prices, and hopefully in a bigger way, to
change purchasing habits where necessary because
this will all have an impact on the sugar tax that we
are talking about, or the impact of those goods.
And so I want to conclude by saying that,
clearly, this is not an intention from Government to
penalise individual consumption, [but] trying to en-courage us to make healthier choices so that in the
long run Bermuda will benefit from reduced health
care costs, because ultimately, w e all do pay the price
for poor health choices because the health system
has to then bear the brunt of their role, and of course
that is affecting our health payments and all that kind
of stuff, so . . .
Madam President, I think I have answered all
the q uestions.
The President: Senator Kempe, you have a question
that you wanted a response or have not had a r esponse for? Sen. Nicholas Kempe: Yes, thank you, Madam President. Thank you, Senator Richardson.
My question was asked about the . . . I think I
got a bit of an answer with the comment on breakfast
cereal, that the duty is not being increased on sugary
cereals, because this amendment does not have the
ability to distinguish between breakfast cereals t hat
have a lot of added sugar and a minute amount of
added sugar. So I think that answers my question
about the per kilo rate.
But I guess it goes to there if you are getting a
snack bar. One that has a drop of honey and high -
quality ingredients will suff er a 75 per cent increase
based on its purchase price, as well as a candy bar
that is mostly sugar.
This Act does not distinguish between snack
items which are healthier, and perhaps more expen-sive, and [those which are] very sugary and cheaper in nature. So it perhaps could curb behaviours toward
the less healthy options. I just wanted clarity on how the duty is assessed and the unintended cons equences.
Sen. Anthony Richardson: Madam President, may I
just confer . . . ?
The President: Yes, you certainly may, Senator
Richardson. You can confer with your . . .
[Pause ]
The President: Senator Richardson, I believe you
have a response.
Sen. Anthony Richardson: Madam President, the
response is that there is the intention to try to differentiate based upon the quantity in certain products. And
I was interested to learn that honey is not deemed to
be sugar, so those products will not be impacted.
But to address S enator Kempe’s question directly, some of the goods that are imported, the customs officers are able to distinguish based upon the
content which tariff code to use, and they will exercise
their discretion. Because the intent is not to negatively
impact ite ms, in this case snack bars that do not have
sugar.
As the brief said, there is the intention to do
some more work. Because the tariff codes themselves are fairly rigid, and it is not going to be as easy as we
may think, or at least as immediate, to try t o change
the actual tariff codes, so they will continue to work
until we can get this a little bit more efficient.
The President: Thank you, Senator Richardson.
Now you will do your second reading.
Sen. Anthony Richardson: Madam President, I
move that the Bill entitled the Customs Tariff Amendment Act 2019 be now read a second time.
The President: Is there any objection to that motion?
No objection.
[Motion carried: The Customs Tariff Amendment Act
2019 was gi ven a second reading.]
SUSPENSION OF STA NDING ORDER 26
Sen. Anthony Richardson: Madam President, I
move that Standing Order 26 be suspended in respect
of this Bill.
The President: Is there any objection to that motion?
No objection.
[Motion carried: Standing Order 26 suspended.]
BILL
THIRD READING
CUSTOMS TARIFF AMENDMENT ACT 2019
Sen. Anthony Richardson: Madam President, I
move that the Bill entitled the Customs Tariff Amendment Act 2019 be now read a third time.
The President: Is there any objection to the third
reading?
No objec tion.
Sen. Anthony Richardson: Madam President, I
move that the Bill do now pass.
456 27 March 2019 Official Hansard Report
Bermuda Senate The President: It has been moved that the Bill ent itled the Customs Tariff Amendment Act 2019 do now
pass.
Is there any objection to that motion?
No objection.
The Bill is passed.
Thank you, Senator Richardson, for all the
time you have taken to answer questions.
[Motion carried: The Customs Tariff Amendment Act
2019 was given a third reading and passed.]
The President: We move now, Senators, to the third
item on the Orders of the Day and that is the Customs
Tariff Amendment (No. 2) Act 2019.
Senator Campbell, you have the floor.
BILL
SECOND READING
CUSTOMS TARIFF AMENDMENT (NO. 2) ACT 2019
Sen. Vance Campbell: Thank you, Madam President.
Madam President, I move that the Bill entitled
the Customs Tariff Amendment (No. 2) Act 2019 be
now read a second time.
The President: Is there any objection to that motion?
No objection.
Carry on, Senator Campbell.
Sen. Vance Campbell: Madam President, this Bill
proposes to amend the Customs Tariff Act 1970, the
principal Act, with measures that include
(1) increasing the import d uty rates for alcoholic be verages and tobacco products, and (2) amending certain end- use reliefs. These measures affect the First
and Fifth Schedules to the principal Act.
Madam President, in the Budget Statement in
support of the Estimates of Revenue and Expenditure
2019/20, the Government promised to raise duty on
cigarettes and tobacco, and on beer, wines and spi rits. The increased duty rate is expected to achieve
additional customs revenue of about $1.5 [million] to
$2.5 million. Accordingly, the Bill proposes the follo wing duty increases: The duty on beer and cider will increase by $0.10, from $1.26 per litre to $1.36 per
litre. The duty on wines will be increased by $1.00,
from $5.00 per litre to $6.00 per litre. Duty on spirits, liqueur and cordials will increase by $0.65, from
$31.35 per litre of alcohol to $32.00 per litre of alc ohol.
The duty on cigarettes will increase by $0.03
per cigarette, from $0.37 to $0.40 per cigarette, or $80.00 per carton of 200. The duty on all other tobac-co products, except cigars, cheroots and cigarillos will
increase to $500 per kilogram in order to achieve ef-fective parity with the duty rate for cigarettes. And if anyone is wondering what a cheroot is, it is a cigar
with both ends that are clipped, they are open, and it
is on paper. So.
[Laughter]
The President: We are duly edified.
[Laughter]
Sen. Vance Campbell: It sounds more like a veget able; that is why I had to look it up.
Madam President I now progress to the
measure of the Bill containing end- use reli efs.
Madam President, in the Budget Statement, it
was pointed out that the most significant items of capital development expenditure in the 2019/20 budget included school maintenance at $3 million. In order to
help that expenditure go that much further, t he Bill
proposes to add the following items to the list of qual ifying goods under CPC 4110, [Customs Procedure
Code] which provides duty relief for school equipment
and educational supplies: Lighting fittings, wall clocks,
network equipment and cabling; telephones; flooring
materials and systems; security cameras; plumbing;
drywall supplies; dollies and casters; and doors, wi ndows, and their frames and thresholds for doors.
Madam President, the Bill also proposes to
amend CPC 4195, which currently provides duty relief
for chemical products and equipment for combating oil
pollution. It is intended to widen the scope of relief
under CPC 4195 to include all goods for combatting
pollution. As a control measure, the Environmental Engineer of the Department of the Environment and
Natural Resources [DE NR] shall certify that the goods
are eligible for this expanded relief.
Madam President, I will take this opportunity
to mention that Bermuda Customs puts into practice a
recommendation of the World Customs Organizati on
[WCO] aimed at speeding up the forwarding of goods
in the event of disasters, including pollution events. In
the case of imports, Customs will permit the duty -free
release of goods on presentation of the relevant cargo
manifests. No import declaration or monetary security
is required upon the importation of relief consignments. No export declaration is required for temporary imports of emergency items.
Guidance on customs import procedures for
goods for disaster management and humanitarian aid can be ac cessed on the governmental portal.
Madam President, the Bill further proposes to
amend CPC 4215, which provides duty relief for goods for commercial goods production. It is intended
to widen the relief to allow the duty -free importation of
retail packaging of local animal and vegetable products. The predominant packaging matter for local pr oduce is clear clamshell packaging. Such packages are largely supplied to commercial farmers via DENR [or the] Agricultural Service Centre. The packaging is deBermuda Senate signed to keep local produce clean and safe for human consumption in order to ensure high quality and
to prolong shelf life.
This expanded relief will help to reduce local
food production costs, allowing local farmers to better compete with cheaper overseas imports.
Madam President, the Bill also proposes to
amend CPC 4196 to provide further duty relief on medical equipment and supplies in relation to goods
used to compensate for a physical, mental, or learning
disability by extending the scope of goods cov ered
under this CPC.
Finally, Madam President, the Bill does a little
housekeeping in a simplified tariff, heading 9803, and in the Fifth Schedule to the principal Act. In the simpl ified tariff, the tariff code for footwear and watches is to
be split int o two separate tariff codes, one for footwear
and one for watches. This split is revenue- neutral.
Also, the tariff code for smoking tobacco and cigars is
similarly split, and the new $500 per kilogram rate is
applied to smoking tobacco. Cigars will remain dutiable at 35 per cent of the value.
Madam President, in the Fifth Schedule, it is
proposed to correct a small number of outdated references to the Director of the Department of Environmental Protection. The new style is, correctly, the D irector of the Department of Environmental Protection
and Natural Resources.
With that, I thank you, Madam President.
The President: Thank you, Senator Campbell.
Would any Senator care to speak on this Bill?
Senator Kempe, you have the floor.
Sen. Nicholas Kempe: Thank you, Madam Pres ident. Thank you, Senator Campbell, for your prese ntation.
I have a couple of questions as it relates to
this Bill. One of the ones, when I look at CPC 4110,
which is on page 3 of the copy we have.
I note that the eligible beneficiary is all impor ters and there are such things as classroom and office stationery, art equipment and supplies, sports, phys ical education and recreational equipment, which are
items that pretty much any parent of a school -age
child could purchase. So I guess I w ould like to know,
seeing as it is not limited to just teachers or just
schools that are purchasing this stuff, is the onus that
is going to be put on the commissioner of education to
certify the goods that are eligible for this relief going to
be cumberso me?
It is a very large pool of eligible beneficiaries
and so I am worried that the scope of relief and the
burden being put on the commissioner could cause a
lot of unnecessary bureaucracy. And I just wanted to
get some more clarity around the eligible beneficiaries and the end- use restrictions.
I would also like to talk about the heads on
page 2 of the copy we have. [Tariff code] 9803, I note with curiosity that cigars and cigarillos and stuff have
a 35 per cent rate whereas we are taxing items with
any added sugar at 75 per cent. It just seems an i nteresting contradiction.
I would also like to point out that smoking t obacco or otherwise, I guess, known as lib, is at $500 a
kilo and my concern is some of the unintended co nsequences around that. I am fam iliar that many people will switch from kind of their store- bought prerolled cigarettes to a loose smoking tobacco in order to curb their consumption of tobacco. And by massiv ely playing with the price point on this I am worried that
there will be some di sincentives for those people tr ying to use self -rolled cigarettes as a reduction of consumption strategy.
The President: Thank you, Senator Kempe.
Would any other Senator care to speak on
this Bill?
Senator Jardine, you have the floor.
Sen. James. S. Jardine: Thank you, Madam Pres ident.
Madam President, I just had one question and
it is on page 2, dealing with the 9803.141 and
9803.143 on footwear and watches.
I understood the Senator’s comments that the
changes were revenue- neutral. I was interested to
know what the change was on the duty rates for
watches, which are now stated at 12.5 per cent. I do
not recall what the other rates were, but I do recall
some while ago, I believe it was last year, it may have been the year before when changes were made to
this particular category. There was concern expressed
by some of the retailers who sell watches, principally
to tourists who come here. Because of our competitive
duty rate, they were able to sell them at a reduced
price when compared to the United St ates. And so
this was a very significant part of their business.
So I would be concerned if this rate of
12.5 per cent was significantly more than what the
rate was last year because it will harm their busines ses. If it is the same rate, then that is fine. But I just ask that question. I did not have an opportunity last night
to go online and check what the old rate was. So I would be anxious for an answer on that question.
Thank you, very much, Madam President.
The President: Thank you, Senator Jardine.
Would any other Senator care to speak on
this Bill?
[Inaudible interjection]
The President: Senator Kemp, you have additional
questions?
Sen. Nicholas Kempe: Yes, I know I am not allowed
one, but an extra one to the Chair. I just want to point
458 27 March 2019 Official Hansard Report
Bermuda Senate out wh at I feel may be an errata in the Bill. Under [tariff code] 9803.141 and 9803.143, this is replacing
9803.141 which levied the duty rate on unit of classif ication —a unit. It is now being levied on a kilo. So you
are going to pay 6.5 per cent per kilo of shoes, and
12.5 per cent per kilo of watches, which seems rather
counterintuitive.
The President: Thank you, Senator Kempe.
Would any other Senator care to speak on
this Bill?
No? Then we will wait for Senator Campbell to
get the answers to the questions that have been
raised.
[Pause]
The President: Senator Campbell, I see you are back
in the chair. You have an answer to the question?
Sen. Vance Campbell: I have a couple of answers,
yes.
The President: You have the floor.
Sen. Vance Campbell: In reference to Senator
Jardine’s question, the duty on watches and shoes
has not changed. That is just to give each category its
own separate tariff code. So that has not changed.
I am told that the “kilo” reference in that area
will be changed. It is an error, and it will be corrected.
So, hopefully, that alleviates any fears in that area.
The rate of 35 per cent on cigars was left in
place from a tourism perspective. As it relates to, I think, the tobacco itself, the loose tobacco as opposed
to . . . this here closes a loophole whereby the Go vernment was losing a few million dollars a year in re venue. So this closes that loophole.
I am waiting for further clarification when it
comes to whether this will be burdensome on the commissioner of education.
Sen. Nicholas Kempe: Madam President, I am not
sure if this is a point of order or a point of clarification.
The President: What is your point of clarification?
POINT OF CLARIFICATION
Sen. Nicholas Kempe: The Member stated that as it
relates to the new [tari ff code] 9803.141 and
9803.143, that it was both revenue- neutral and did not
change the existing tariff.
However, 9803.141 (if I have the correct copy
of the customs tariff in front of me) appears to be a consolidated rate, as one would expect as it was one, and it is listed at 12.5 per cent. So one of the footwear
is now being desegregated from the combined tariff code and it is at a lower rate, so it is neither revenueneutral nor is it the same rate.
The President: Thank you, Senator Kempe.
[Pause]
The President: We are awaiting a response to the
additional question.
[Pause]
The President: Senator Campbell, you have a r esponse?
Sen. Vance Campbell: Thank you, Madam President.
The President: You are welcome.
Sen. Vance Campbell: In reference to whether this
will be burdensome to the commissioner of education,
I am advised that the end user must be registered un-der section 12 of the Education Act 1996, which bas ically means schools.
The President: Mm-hmm.
Sen. Vance Campbell: I am also being told that when
it comes to footwear it ties back to the First Schedule,
and the duty rate in that Schedule is 6.5 per cent. The
12.5 per cent that we see here is related more to co uriers than the average person.
Sen. Nicholas Kempe: Point of clarification.
The President: You are accepting the point of clarif ication?
Sen. Vance Campbell: Not at this time, Madam President.
The President: We will carry on then and move
your—
POINT OF ORDER
[Misleading]
Sen. Nicholas Kempe: Point of order then, Madam
President. The Member may be inadvertently misleading the Senate.
The tariff code that is being amended in this
Act that is before us, amends chapter 98, which is for couriers. So any footwear brought in through a courier
will now be 6.5 per cent instead of 12.5 per cent,
which will result in a decline in revenue.
[Pause]
Bermuda Senate Sen. Vance Campbell: Madam President, I am advised that the couriers have the option to go to the
First Schedule and bring the goods in at 6.5 per cent,
and that is what they would do rather than bring any in at the higher rate. So that is what I am advised, Mad-am President.
The President: Thank you, Senator Campbell.
You will now move on to move the Bill, the
second reading.
Sen. Vance Campbell: Thank you, Madam Pres ident.
Madam President, I move that the Bill entitled
the Customs Tariff Amendment (No. 2) Act 2019 be
now read a second time.
The President: Is there any objection to that motion?
No objection.
Carry on, Senator Campbell.
[Motion carried: The Customs Tariff Amendment
(No. 2) Act 2019 was gi ven a second reading.]
SUSPENSION OF STANDING ORDER 26
Sen. Vance Campbell: Madam President, I move that
Standing Order 26 be now suspended in reference to
this Bill.
The President: Is there any objection to that motion?
No objection.
[Motion carried: Standing Order 26 suspended.]
BILL
THIRD READING
CUSTOMS TARIFF AMENDMENT (NO. 2) ACT 2019
Sen. Vance Campbell: Madam President, I move that
the Customs Tariff Amendment (No. 2) Act 2019 be
now read a third time.
The President: Is there any objection to the third
reading?
No objection.
Sen. Vance Campbell: Madam President, I move that
the Bill do now pass.
The President: It has been moved that the Bill ent itled the Customs Tar iff Amendment (No. 2) Act 2019
do now pass.
Is there any objection to that motion?
No objection.
The Bill is passed.
Thank you, Senator Campbell.
[Motion carried: The Customs Tariff Amendment
(No. 2) Act 2019 was given a third reading and
passed.]
The President: Moving on to the Orders of the Day,
item 14, Motions.
MOTIONS
The President: There are none.
Item 1 5, Congratulatory and/or Obituary
Speeches.
CONGRATULATORY AND/OR
OBITUARY SPEECHES
The President: Would any Senator care to speak on
this?
Senator Richardson, you have the floor.
Sen. Anthony Richardson: Madam President, just a
brief congratulations which is extended to the Berm uda College, generally. And in particular, Dr. [Phyllis]
Curtis -Tweed, Dr. [Duranda] Greene, and the other
support staff on the introduction of the Phi Theta Kappa sorority . And th ey did it on the basis of the students
who were inducted on the basis of academic excellence. And I emphasise the fact that there were, I
think, 12 persons who were inducted and some of the
students were dual enrolment students.
The implications, or the f act, rather, is that
some children will go, to say, Berkeley and CedarBridge and Bermuda College, and their grades were
higher than full -time students at Bermuda College.
And so the reality is, students who are, say, age 16, 17, and maybe some 18, would more than adequately
compete at the college level and be able to attend
high grades to be inducted into sorority. And som etimes . . . well, we do sometimes here we do not give
appropriate credit to these successes.
So, again, I say congratulations to the Berm uda College for the work they are doing on behalf of
our young people.
Thank you.
The President: Thank you, Senator Richardson.
Would any other Senator care to speak?
Madam Attorney General, you have the floor.
Sen. the Hon. Kathy Lynn Simmons: Thank you,
Madam President.
I would like to send best wishes to the players
and parents and coaches for the Kappa Football
Tournament that I believe is taking place over this weekend. As a mother of footballers, I remember
many, many, many, many years of attending this tournament with all the early morning preparations and
anxiety during the day. But it is truly a wonderful tour460 27 March 2019 Official Hansard Report
Bermuda Senate nament that draws a huge arm of support from me mbers of the community. And so to the fraternity, W ell
done , once again. And to t he children (youngsters, I
should say), I wish them all the best for an enjoyable
tournament and that they maintain their sportsman-ship and enjoy the occasion.
Thank you, Madam President.
The President: Thank you, Madam Attorney General.
And I am sure w e, all Senators, will join you in those
comments.
Would any other Senator care to speak on the
congratulatory and/or obituary speeches?
If not, we will move on to adjournment.
Madam Attorney General —
ADJOURNMENT
Sen. the Hon. Kathy Lynn Simmons: Madam Pres ident, yes, I move that we adjourn to Wednesday, May
8th.
The President: Would any Senator care to speak on
the motion to adjourn?
Sen. the Hon. Kathy Lynn Simmons: May I Madam
President.
The President: Yes, you may, certainly.
VOTE OF THANKS T O THE
MINISTRY OF FINANCE TEAM
Sen. the Hon. Kathy Lynn Simmons: I would like to
take this opportunity as we rise to thank the Gover nment’s technical officers and the Ministry of Finance
for the work that they did in preparation of the heads
for the Budge t Debate this year.
I would also like to acknowledge the parli amentary counsel who have worked tirelessly once again to move the Government’s legislative agenda,
so in behalf of the Senate, and special thanks to my
team today, Ms. Amani Lawrence. I will say this, there are times that the parliamentary counsel goes far
above the responsibility to draft legislation and actua lly aid ministries and permanent secretaries in other
areas, particularly with respect to the brief, and so my
team is very dedicated t o making sure that we give a
thorough briefing in terms of the agenda that we advance with respect to our legislation, and so to Ms. Lawrence, thank you very much, as to the rest of the
team.
And on behalf of the Senate, we look forward
to the next session and the collaboration that ensures
that we all are successful.
Thank you, Madam President.
The President: Thank you, Madam Attorney General. With that, the Senate stands adjourned until
May the 8
th.
Enjoy your recess. Thank you.
[At 11:47 pm, the Senate stood adjourned until
10:00 am, Wednesday, *8 May 2019]
*[The Senate resumed on Wednesday, 22 May 2019]
Would any other Senator care to speak on
this Bill?
No? Then Madam Attorney General, there are
a few questions.
You have the floor.
Sen. the Hon. Kathy Lynn Simmons: Thank you,
Madam President. With regard to the enforcement provision,
there is no intention for any inspector to have the
powers of the police. What is necessary is for the police to be informed, so the oversight with the minister ial appointments in terms of inspectors is simply to gather the information necessary for enforcement. So there is no intention to extend those powers.
With regard to the simplification of the pr ocess, all licences will be subject to the same simplified process.
With regard to the online application process,
this is being worked on. What we are going to do is
probably allow this session to continue as is while we
make t he amendments that are necessary. The pr ocess is quite extensive, as I said earlier, and the Senior Magistrate has basically undertaken to streamline the administrative part of it during the upcoming ses-sion. So not every applicant will be required to go before the committee and that is because some of them
are just renewing. And so when we have new appl icants it will be imperative for us to ensure that they
have in place [all that] is necessary, Madam Pres ident, to ensure that they are in compliance.
With regard to the various categories of licences, and it does seem quite intricate when you look at the Act, what is important to note is that there are different levels of compliance necessary for the different classes. Because a major event requires, for instance, more security and more oversight, and so
what we are trying to do . . . I mean, there was the
thought to actually streamline it so that we have one licence. But the different activities surrounding the sale of alcohol . . . there are just so many i ssues.
But what we try to do is balance the economic
interest so members of the public can choose to engage in this as a business enterprise with the preve ntion aspect. And therein lies the challenge. And so
during the process of formulating the Bill, wha t we had
when I came into office was various vendors who sent
in their concerns , particularly with respect to wine tas ting and other such activities, which were improperly
regulated. And in order to maintain the balance of the
economic advancement of businesses, as well as the
prevention in deterrences we actually had to make
specific provision for the categories of licences and
permits which were out there and not properly reg ulated. So there you see the itinerant licence and the
like that we have.
With regard to persons understanding the
rules, it is imperative that we have the guidance prov ision. And so as we go along the road to further modernisation, I will be issuing guidance to ensure that everyone understands what this process involves and
what the expectations are with regard to compliance.
So what we have today is the first step toward
modernisation . And I am extremely keen to refine the
process , because that is where I think we are having
most of the challenges in terms of persons who want
to engage. But I will say that it is incumbent upon ap446 27 March 2019 Official Hansard Report
Bermuda Senate plicants to make sure that they actually follow the pr ocesses that are in place, because we have had in the
past many complaints coming from industry . But when
we delved down into the actual problems , we foun d
that people were actually breaking the rules —the applicants were applying late, they were not necessarily
in compliance— and what we are going to do as we
would do with any new policy is exercise some oversight and monitoring to see where we may have to
further refine, issue guidance, and aid the process.
The President: Thank you, Madam Attorney General.
Sen. the Hon. Kathy Lynn Simmons: Mm-hmm.
The President: Now, your second reading.
Sen. the Hon. Kathy Lynn Simmons: Thank you,
Madam President.
I move that the Bill be now read a second
time.
The President: Is there any objection to that motion?
No objection.
Carry on.
[Motion carried: The Liquor Licence Amendment Act
2019 was given a second reading.]
Sen. the Hon. Kathy Lynn Simmons: Am I suspending Standing Order 26?
The President: Yes.
SUSPENSION OF STANDING ORDER 26
Sen. the Hon. Kathy Lynn Simmons: Madam Pres ident, I move that Standing Order 26 be suspended
with respect to the Bill.
The President: Is there any objection to that moti on?
No objection.
Carry on.
[Motion carried: Standing Order 26 suspended.]
BILL
THIRD READING
LIQUOR LICENCE AMENDMENT ACT 2019
Sen. the Hon. Kathy Lynn Simmons: Thank you,
Madam President .
I move that the Bill entitled the Liquor Licence
Amendment Act 2019 be now read a third time.
The President: Is there any objection to the third
reading? No objection.
Sen. the Hon. Kathy Lynn Simmons: Thank you,
Madam President .
I move that the Bill do now pass.
The President: It has been moved that the Bill ent itled the Liquor Licence Amendment Act 2019 do now
pass.
Is there any objection to that motion?
No objection. The Bill is passed.
Thank you, Madam Attorney General , and
Senators.
[Motion carried: The Liquor Licence Amendment Act
2019 was given a third reading and passed.]
ANNOUNCEMENT BY THE PRESIDENT
SENATE VISITOR
The President: We will now move on to the second
reading of the Customs Tariff Amendment Act 2019, and before we actually do I would just like to
acknowledge i n the Gallery the presence of the Permanent Secretary of Health, Mrs. Jennifer A ttrideStirling, and also the parliamentary counsel, Dr. A nthony Richardson. Welcome to you.
Senator Richardson, this is your Bill? You
have the floor.
Sen. Anthony Richardson: Good morning, Madam
President.
The President: Good morning.
Sen. Anthony Richardson: Hello Senators and
members of the listening public.
BILL
SECOND READING
CUSTOMS TARIFF AMENDMENT ACT 2019
Sen. Anthony Richardson: Madam President, I
move that the Bill entitled the Customs Tariff Amendment Act 2019 be now read a second time.
The President: Is there any objection to that motion?
No objection.
Carry on , Senator Richardson.
Sen. Anthony Richardson: Thank you, Madam President.
I am pleased to invite Honourable Senators to
give consideration to the Bill entitled Customs Tariff Amendment Act 2019.
Bermuda Senate Madam President, the Bill proposes to amend
the Customs Tariff Act 1917, the principal Act, with
measures that include (1) increase to the duty rate to
75 per cent for food and beverage items affected by
the sugar tax on the 1st of April 201 9; and (2) apply
the above- mentioned duty rate to chocolate and c ocoa preparations containing added sugar.
These measures affect the First Schedule of
the principal Act. I am pleased to be speaking on behalf of the Minister responsible for the policy initiative pertaining this amendment.
Madam President, in June 2018, the Gover nment introduced, as promised in the Throne Speech
and the Budget Statement, an increase in the duty
rate on sugar -sweetened beverages, candies and
pure sugar. These proposals were outlined in detail in
the Health Ministry’s Sugar Tax Consultation document and subsequent reports.
Madam President, in June 2018, the Minister
advised the public that Bermuda’s new sugar tax
would be phased in gradually. On 1
st of October
[2018], a 50 per cent duty rate was implemented on
the said items, as part of a tr ansitioning phase. Today,
it is proposed to raise the duty rate on the said items
to 75 per cent from 1st of April 2019. In addition to the
full 75 per cent duty rate implementation, chocolate is
proposed to be included in the tariff as of 1st April
2019 also at the 75 per cent sugar tax rate.
Madam President, Bermuda’s food system is
an interconnected network of providers, servers and consumers. Accordingly, p olicy changes in one area
can affect all parts of the network . Government is determined to take progressive steps to influence a cultural shift toward healthier food choices in Bermuda in order to tackle our obesity and chronic disease epidemic.
Unhealthy weight is a leading risk factor for
chronic diseases such as heart disease, diabetes,
kidney dise ase and cancer, as well as health pro blems like hypertension and stroke. It is estimated that diabetes and kidney disease currently account for
10 per cent of the country’s total health spending.
Madam President, this means just two lif estyle-induced prev entable conditions are costing us,
Bermuda, $78 million. This has to stop. The sugar tax is an important part of the measures needed to
change choices and behaviour.
Madam President, three out of four adults in
Bermuda are overweight or obese, and Government wants to emphasise HEAL—Healthy Eating and A ctive Living. The elements of HEAL go hand in hand,
but it is almost impossible to exercise yourself out of
an unhealthy diet.
The World Health Organization recommends
that free sugar should be limited to l ess than 5 per
cent of the daily energy intake, or less than 25 grams
of sugar per day. Madam President, this means that a
single soda—I underscore single soda —already exceeds the World Health Organization’s recommended daily intake. And since 50 per cent of adults in Bermuda drink at least one sugary drink a day (I started
to smile) , we can begin to appreciate how it may co ntribute to 75 per cent of our population being overweight or obese.
As an aside, Madam President, when we talk
about “obese” we think of it as being like just a co mpletely negative thing, but I did not realise until recent-ly that it is not like this gross overweight, it is amazing
the degree to which people can be deemed to be
obese from, I guess, a medical perspective.
The President: Mm-hmm.
Sen. Anthony Richardson: Which is more than I
would have thought.
But, Madam President, in one Hamilton gr ocery store, the grocer has affixed blue labels under
sugar -taxed items that state, “This item has been affected by the sugar tax.” (And I am going to come back to that later on, by the way.) In one aisle alone, the Minister counted 28 labels, and wants to thank the
grocer for putting out these labels since it increases
awareness. The advice? If your shopping cart and
daily diet includes one or more of those items, it is
likely that you need to rethink your drink or change
your diet.
It is sobering to recognise how many sweetened, calorie- dense food and drink items have flooded
our grocery stores and diets. Items that were prev iously consumed i n moderation (i.e., candies) or as
treats have become regular fare. Bermuda, we are immersed in an obesogenic environment, and it is going to take awareness, vigilance, and hard work to
change that for the better.
Madam President, the World Health Organiz ation proposes the use of taxes as part of a broad
strategy to prevent obesity and non- communicable
diseases, including type 2 diabetes, to improve health outcomes and direct persons towards healthy options. For instance, the World Health Organization has r ecommended that sugar -sweetened beverage taxes
should be designed to increase retail prices by 20 per
cent to meaningfully impact health. Indeed, a number
of other jurisdictions have introduced measures in r ecent years, and studies before and since the int roduction of sugar taxes have shown that they help to r educe consumption of these products. And I am sure there will be some comments in a minute in terms of
whether this really works, but in any event . . .
A recent study published on the 30
th of Jan uary 2019, showed that the Barbados sugar -sweetened
beverage tax of 10 per cent, introduced in June 2015,
increased the retail price by 5.9 per cent and decreased sales by 4.3 per cent. I want to emphasise
that, or repeat it, in that the beverage tax of 10 per
cent, caused the actual retail prices to increase by 5.9 per cent (i.e., less) and decrease sales by 4.3 per
cent. At the same time, sales of non- sugar -sweetened
448 27 March 2019 Official Hansard Report
Bermuda Senate beverages increased by 5.2 per cent, with bottled w ater sales going up by 7.5 per cent, which is encouraging from a health perspective. In other times, when it
comes to numbers, it is like, just numbers. But the
reality, this is saying that by increasing the price of these goods, there was less consumption and more
healthy alternatives were used i nstead.
While sugary drinks have been the focus of
the sugar tax in most other jurisdictions, the tax pr oposed for Bermuda includes items such as candies,
which now includes chocolate and plain sugar. The goal is to curb unwanted consumption of these foods ,
which contribute no nutritional value to our daily diets.
As a reminder, the Health Department’s full
consultation report on the sugar tax is published on their website. I actually have a copy of it here. Madam
President, there were 351 responses to the consult ation. The findings of the consultation supported the implementation of a sugar tax, with most respondents
indicating that the tax would change consumers’ behaviour. Again, I smile, because you wonder who the respondents would have been, but anyway . A clear
majority of 60 per cent said that candy should be
taxed, and many questioned why chocolate was not
included. That is why we are now including chocolate.
There was broader support from the consult ation for the tax to be introduced at 75 per cent duty, on
the suggested items, and that is why we are now proposing to implement the full 75 per cent duty rate. So
those who responded wanted a significant tax on these chocolates and candies, and what have you.
Sugar and sugar -sweetened items have become more
expensive at retail locally, and the increase has
prompted greater awareness and adoption of healthier
buying habits. There continues to be much support for
the sugar tax. And the Minister has received lett ers of
thanks from persons who have been motivated to
drastically reduce their daily sugar intake and intr oduce high fibre and lean protein with every meal. Some amazing results, including diabetes reversals,
are possible, and they are being achieved.
Madam President, I will pause here to make
the statement that there has been some concern in
response to the sugar tax that some retailers are actually increasing prices unnecessarily. The most
alarming . . . and I say that anecdotally because I just
cannot be lieve this. But anyway, that in one instance
the price of eggs has increased, supposedly, in r esponse to the sugar tax, which, clearly, makes no sense. And so in my role as the chair of the Price
Control Commission, I have been asked to monitor
any unneces sary increases in prices, which may r elate to actual price gouging.
And for Senators and members of the public,
the idea is that . . . let’s assume it is a chocolate bar
that is bought overseas at $1.00. When you import it, of course, it is going to be . . . the prices for shipping
and duty and the rest of it, the cost of duty is not on that, it is on the original purchase price. So it is going to be inappropriate if the retail price of a chocolate
bar, a big chocolate I would say is $2.00, it is going to
be inappropriate if the retail price increases by 75 per
cent as a result of this sugar tax. And that is what we are going to be looking into. Also, to make sure that the items that do not contain sugar are not used as an
excuse for these increases.
And I am saying that because as part of the
Price Control Commission, the challenge was how do you monitor things and, you know, we cannot put in
place price controls, per se, but there is the respons ibility to ensure that there is not any unnecessary price
gouging from this process. And so I am letting ever ybody be aware that we are going to look at this in a
proactive way to ensure that there is not the inadver tent increase in prices.
Madam President, the three most important
decisions that we all make for our health every day
are breakfast, lunch and dinner. How many ate breakfast today? The Government has already eliminated
duty on potatoes, cauliflower, broccoli, turnips, carrots, oranges and apples (I don’t see grapes) to fur-ther support healthier nutritional choices, showing that
this Government is absolutely committed to improving
our diets. And so the comment that healthy items are
too expensive for us to consume, the Government’s
response has been to eliminate the duty.
And, again, the commentary has b een, When
Government puts in place these regimes, do the i mporters reflect the reductions in their prices? And so,
realistically, unless something has changed with the
base price, the price for potatoes, cauliflower, brocc oli, turnips, carrots, oranges, and apples, for example,
should reduce if the duty on those items has now
been reduced.
As the Government indicated in a previous
Budget Statement, the additional revenue collected
from the sugar tax is to support the promotion of
healthy living initiatives. Since the October 2018 i mplementation, the value of imported goods fell by
24 per cent, representing a decrease of $1.2 million.
While it is still early days, and we will continue to monitor, it may well indicate that importation of these item s
fell during the first five months of the implementation. If this reflects reduced consumption of sugary items, then this is good news. But we have to monitor for a
longer period, together with behavioural surveys of
consumption, to see the impact conclus ively.
I know I am taking a while this morning, Ma dam President, but I will also say that for the longer
period, we have to see whether or not the importers stockpiled before the tax came into play, because that
would have the same impact in terms of there would
appear to be a reduction, so we have to monitor this
for an extended period, as the brief says.
Nevertheless, despite the reduced imports,
and there was a net gain in duty of $695,000 for the affected items, that is a 66 per cent increase in duty
despite reduced imports. So it may be having the i nBermuda Senate tended impact. I emphasise that it is early days, but so
far the figures are promising.
The additional funds generated by the sugar
tax will be allocated to support healthy living initiatives
as they are dev eloped. And that is another question,
Well, Anthony, with the sugar tax in place, where has the money gone? Pardon the grammar, but that is
what they have asked. And the answer is, to date, the
additional revenue has helped to offset a $200,000
reduction i n revenue from duty losses arriving from
the reduction of duty on healthy items of 0.0 per cent
duty. So there is no more duty coming in from the ot her things I talked about just now, and some of the
sugar tax has gone to offset that so the Government
does not have a net negative revenue.
Also, nutrition labelling on menus and vertical
farming have been identified as initiatives that will be
supported. And so the rally cry is, If you are interested
in vertical farming l et it be known. Let’s get that going.
This continues to be work in progress as potential initiatives develop further. Madam President, I
welcome and encourage entrepreneurs to tap into the
public’s increasing demand for healthier alternatives
with reduced or no sugar. A market exists for this , and
more and more products can be seen on many retai lers’ shelves reflecting the changing mood and taste of the population.
The consultation process also noted that local
businesses were concerned that taxing sugar would make it more expensive for them to do business, as
their goods will be more expensive than imported
goods. Local preparers of foodstuff have been given
the opportunity to apply for concessionary rates from the Minister of Finance, under the existing provision
for commercial manufacturers of goods. And I asked
about that because I know sometimes for small bakers, in particular, it is a very cumbersome process. We
have been informed that at least two businesses, well -
known businesses, have applied and were approved by the Minister of Financ e to be included in the Customs Tariff Approved Organisations Notice of 2019,
which is Crow Lane Bakery and Dunkley & Pioneer
Dairies Ltd.
And I say that because persons have actually
asked about that and my response is to do what they need to do to regis ter so they can at least reduce their
costs and carry on, you know, whatever they are doing. Especially because we know that there are so
many either small or home- based bakeries that, in my
opinion, have excellent goods and you would not want those prices to increase unnecessarily.
So, Madam President, the department will
monitor consumption levels through health surveys
and imports. The first price survey was completed in
the summer of 2018 and will be repeated this summer. The STEPS survey will be repeated in 2019 and will monitor overweight and obesity to evaluate
whether our interventions are making the difference
we need. Before I conclude, Madam President, I want to
give recognition to the staff at the BLDC because yes-terday . . . this was a huge point of discussion, some
of the points I am making today, and they helped to bring some clarity. And I had to try to reassure them that, yes, healthy alternatives are available and spec ify that Government has in fact reduced the duty on
what are deemed to be healthier alternatives.
So, Madam President, the Government r emains committed to reducing chronic diseases and
lifestyle -related health problems in Bermuda and we
encourage all residents to make a personal commi tment to doing the same.
Thank you, Madam President.
The President: Thank you, Senator Richardson.
Would any Senator care to speak on this Bill?
Senator Jardine, you have the floor.
Sen. James. S. Jardine: Everybody is shrugging, so I
guess I will jump in.
[Laughter]
Sen. James. S. Jar dine: As a chocoholic —
[Laughter]
Sen. James. S. Jardine: —obviously, a 75 per cent
tax on chocolates that I previously enjoyed is going to have a significant impact. There is no question. In addition to my wife who watches very carefully what I eat.
[Laughter]
Sen. James. S. Jardine: So from my point of view,
the sugar tax, I think, is something that is very wort hwhile.
I know we had a debate back in June, I believe, when we passed the first amendment Bill, about
sugar tax and the effects that it is having in various
countries around the world. And just very briefly,
Madam President, I wanted to recall some of the
facts. I had a quick look on the Internet for any u pdates, but certainly in France, when they introduced
the sugar tax on soft drinks there, it had a significant
impact in terms of the amount of consumption of soft
drinks. Belgium, not so much of an effect, but i t did
have [some effect]. And the United Kingdom, it has had an effect.
What is interesting to note is that the United
Kingdom is now pushing forward, as I understand it,
with a sugar tax on chocolate, which, as you can i magine in the United Kingdom, is a significant step for
them. Chocolate is a major part, unfortunately, I
guess, of children’s diets over there. It has become so. So, the United Kingdom is moving forward with it
450 27 March 2019 Official Hansard Report
Bermuda Senate and I guess one could say, well, maybe Bermuda is
taking the lead on this, whi ch is a good thing.
So, from my point of view, I understand that
obviously a 75 per cent increase in the duty on choc olate is going to, I think, have a significant impact on
the consumption of chocolate. It will impact busines ses that use sugar. And we have heard from the Senator the consideration that is going to be given to small
family businesses which produce home- baked goods
and other businesses with respect to that 75 per cent
tax.
I was pleased to obviously hear about the r eduction to 0.0 per cent on duty on healthy foods, because that is a major issue. If you shop regularly in the food stores, and my wife does not let me shop, because I always buy things that are not on the list.
[Laughter]
Sen. James. S. Jardine: But if you look at the price of
healthy foods in most food stores, they are very, very
high. And so those with a limited budget are reduced
to buying things that are not quite so healthy simply
because they cannot afford the more healthy foods.
And so that is good news to hear that duty on things
like cauliflower and other vegetables is coming down.
I would encourage Government to continue to look at other areas of food stuffs in the grocery stores to see
what other foods, more healthy foods, they can r educe the duty on.
I was also pleased to hear the Senator talk
about controls or reviewing price gouging, because
that is a real concern, where prices of certain goods may go up prior to the implementation of some of
these additional duties. And we want to make sure
that the benefits that are supposedly being passed on
to the consumers are indeed being passed on. So I
was pleased to hear that the Price Control Commi ssion is going to be looking at that to hopefully prevent any price gouging that might take place.
So, Madam President, I think on balance, I
was certainly in favour of the changes that are being recommended here to the customs tariff with respect to breakfast cereals that have a lot of sugar in them,
other baked goods that have a lot of sugar, and I can
see my consumption of c hocolate bars disappearing
into the past.
And so with those few words, Madam Pres ident, I support this legislation.
The President: Thank you, Senator Jardine.
Would any other Senator care to speak?
Senator Robinson, you have the floor.
Sen. Dwayne Rob inson: Thank you, Madam Pres ident.
Regarding the sugar tax, I believe most of us,
if not all of us, agree with the fact that we need a
healthier population and that, you know, there needs to be more emphasis put on sugary items. My only
concern regarding this sugar tax was that it did not
come with an accompanied breakdown of exactly
where the percentages were going to go, and a national plan to combat sugar usage, and overeating in things that do cause diabetes.
So, I do support the endeavour to create a
healthier population, but I do think that taxes like these should be paired with a national plan that
should have been presented to the people of Berm uda so that they could know exactly where those tax
breakdowns were going and what initiatives were
[com ing] down the pipeline so that it showed that
there was preplanning and that it was a dedicated tax
initiative that was meant to better the people of Bermuda.
So, that would be my only concern. I look forward to seeing a national plan to combat diabetes and the support of initiatives that are already combating
diabetes. And I also look forward to seeing a precise
breakdown of how those initiatives will be funded and
how the sugar tax percentages will be divvied up.
Thank you, Madam President.
The Presiden t: Thank you, Senator Robinson.
Would any other Senator care to speak?
Senator Kempe, you have the floor.
Sen. Nicholas Kempe: Thank you, Madam Pres ident. And thank you, Senator Richardson, for the i ntroductory statement.
I have a few questions about the logistics of
the Bill as well as the carveouts. I note that the general intent of the Bill is to curb behaviour by affecting
price through importation duties. We are all aware of
the prevalence of diabetes in Bermuda. And one of
my first set of questions comes around behaviours developed in childhood.
And I just wanted to understand if there was
any research or anything that supported the carveout for sugary breakfast cereals, which is obviously a
main breakfast item for yo ung children. Certainly, as
you get older, perhaps, you start to eat more eggs and
this kind of thing, but for young children the fact that
there is 0.0 per cent custom duty on sugary breakfast cereals feels a bit like a missed opportunity to affect
behavi ours there.
I also wanted to ask about the . . . if we look at
section . . . where are we in the Bill? Section 2(3)
where it refers to custom tariff heading 22.02, and it
tackles beverages that have added sugar, but it does not affect the fruit or vegetabl e juices under heading
20.09. I note that under heading 20.09 of the Customs
Tariff that there is only a 5 per cent duty on fruit and
vegetable juices, whether or not they contain added
sugars. So, again, it feels like the . . . whilst people
might be turn ed away from water with even a small
amount of sugar in it, there is going to be no matching price change on fruit juices that could have an exBermuda Senate traordinary amount of sugar in it as the customs duty
on heading 20.09 is only 5 per cent.
I also worry about, again, without the accompanying communication plan or whatever, that when
you look at . . . if you squeeze a juice from a fresh orange at home, you get approximately two ounces of
juice out of it. However, you standard to- go size fruit
juice contains about 1 0 ounces of juice and can have
23 grams of sugar even though there is no added sugar in it. Compare that to a Coke that has about 39
grams of sugar. So it feels like there is a bit of a missed gap there, and I just wanted to get some clar ity around that fr om the Senator.
I am also looking at the way in which the duty
is levied in the case of any solid imported food stuffs, i.e., not liquid. It seems to be, and I would accept clar ification here if I am misreading this, it seems to be per kilo of food, as opp osed to per kilo of sugar, which
would mean, if I am interpreting this correctly that, for
example, a Kind nut bar that has 5 grams of sugar in
it, will see the same price increase as a Kind nut bar that has 9.2 grams of sugar in it. So it would seem
that it is not assisting people to direct their choices
toward the healthier of two options, in this case. It
simply is going to drive up the price of any food stuff
that has any added sugar in it.
I also wanted to talk about the logistics of
shipping and the exemptions as it relates to small businesses. It is all well and good that the largest i mporters can apply for the tariff exemption when they
do their own baking, but for most of the small bus inesses that engage in baking in Bermuda, they buy
their sugar fr om the wholesaler. And by the time they
go and purchase it, the sugar has already been i mported and already had a customs declaration filed.
So it becomes very onerous and expensive to
then go back and file further declarations to get the lower duty rate on the smaller quantities of sugar purchased by home bakers, which again, kind of makes it harder as a local producer to get these benefits that
have been kind of put in after the fact.
So I just want to kind of highlight that I am
worried about the actual impact for the small producers because unless they import their own sugar direc tly from overseas and file their own customs duty dec-laration, it is going to be very challenging for them to actually benefit from these carveouts.
ANNOUNCEMENT BY THE PRES IDENT
SENATE VISITORS
The President: Thank you, Senator Kempe.
Before I pass on to the next Senator who
wants to speak, I would just like to acknowledge in the
Senate the Junior Minister of Finance, the Honourable
Wayne Furbert. As well as the Financial Secretary,
Mr. Anthony Manders. Welcome to you both. I think Senator Michelle Simmons, you have
the floor.
[Customs Tariff Amendment Act 2019, second reading, continuing]
Sen. Michelle Simmons: Thank you, Madam Pres ident.
I just have a brief comment and a question. I
will first say that I applaud the Government for moving
forward with this next stage of the sugar tax. Yes, it
will hurt because some of us will become more conscious of the fact that we have to pay a lot more to
indulge in things that we probably know we should not
be indulging in anyway. But, so be it.
I would also like to encourage the Gover nment to go even further with one aspect of what they
are doing. And that is with regard to further customs duty relief for fresh fruits and vegetables. The reason I
am asking them to go even further and provide more
relief on fresh fruits and vegetables is tied to a word that was used earlier, and that is “obesogenic.” I went
straight away to the Internet and I found a paper here.
It is written by the University of Nevada Cooperative
Extension. And it says at the top, “What is an ob esogenic environment?” And I would just like to quote a
small section of this. May I, Madam President?
The President: You certainly may, Senator Simmons.
Sen. Michelle Simmons: It says, “ The term ‘obesogenic environment ’ refers to ‘ an environment that
promotes gaining weight and one that is not cond ucive to weight loss ’ within the home or workplace . . . .
In other words, the obesogenic environment refers to
an environment that helps, or contributes to, obesity.
Focusing on modifying the obesogenic environment at
the community and policy level can impact the community residents at large. These changes could i nclude access to heal thy food and ac cess to places to
be physically active . . . .”
So one of the things that we have to continue
to strive for is making sure that as many people as
possible have access to healthy food. And that access
can only be provided if the prices of some of the
healthy foods are lower.
I agree with us trying to [ have an] impact on
thinking and habit by taking away, in a sense, access
to the sugary foods, but unless that is supported with
us providing better access to healthy foods, then it may not have as great an impact on thinking in the
community as we would li ke. So, my plea, once again,
to Government is, please consider going even further
in reducing customs duties on more healthy veget ables and fruits. And with that, Madam President, I will
end my remarks.
The President: Thank you, Senator Simmons.
452 27 March 2019 Official Hansard Report
Bermuda Senate Would an y other Senator care to speak on
this Bill?
Senator Campbell, you have the floor.
Sen. Vance Campbell: Thank you, Madam President.
Madam President, a lot of the discussion
around expense has been focused on individuals pur-chasing and the increased cost they will face. But
when you draw back, Madam President, and you look
from a macro level, a higher level . . . some people
say fly at 35,000 feet. One of the greatest expenses
facing individuals in this country today is the cost of
health.
These products containing sugar, we have
heard, contribute to obesity and other illnesses that
are driving the cost of health through the roof. So, we
can focus on the impact on Vance Campbell when he
buys his chocolate, and I do like chocolate —
[Laughter]
Sen. Vance Campbell: And I am also one of those
people . . . I was shocked to find was obese. I never
considered myself to be obese. But according to the charts, I am.
[Laughter]
Sen. Vance Campbell: Yes, I could afford to lose
some weight, but I never considered myself obese.
But I want us to draw back and stop focusing on our
individual purchase and look at the cost to the country
through health insurance that these products are causing.
Thank you, Madam President.
The President: Thank you, Senator Campbell.
Would any other Senator care to speak? No?
I would just like to make a couple of co mments myself as a health professional in the past and
certainly I am fully aware of the obesity that is in this
Island. I think most of us can remember, way back
when, you looked at people in the community and
they were not obese, they were not fat, young people.
But now what we see is a tremendous increase in the
obesity levels in Bermuda.
And, of course, as a health professional I can
say that I have been exceedingly concerned, as Sen ator Campbell has duly noted, about the cost of health care in Bermuda. If you compare us with the other
OECD countries, Bermuda, next to the United States,
has the highest health care costs.
So I think that if anything is put in place by the
Government to draw attention to what we as individuals and as a population can do to lower the cost of
health care, it is certainly our diet and the sugary drinks, and even when you look at children . . . I am
glad to see in schools that they have programmes when children are involved in activities and recreation. It just warms my heart to see all the activity because
the obesity is not just in the adults, but you have to
start in the schools. You have to start with the diet and
you have to start with education in schools.
So I fully support and commend the Gover nment for bringing this Bill forward.
Senator Richardson, I believe it is over to you
and you have a few questions to respond to.
Sen. Anthony Richardson: Sure. Again, Madam
President, I obviously take the serious nature of what
we are proposing to do, and I will start, I guess, by
underscoring the comment from Senator Campbell in
terms of this Bill is really not an individual Bill, it is a
country -specific Bill. It is for the Island to try to certai nly reduce our levels of un- healthiness. In my mind
right now, to be honest, there is a picture of persons who have amputations.
The President: Mm-hmm.
Sen. Anthony Richardson: And, you know, yes,
there may be some other elements that attributed to
their circumstance, but, clearly, we do not want it to
get to a stage whereby we see an increased incidence
of amputations that are already quite high. And so we
want to be very, very mindful of that.
To add to that, and I take your point, Madam
President, in terms of the children at school do en-gage in physical activity. What I am still surprised at,
though, is that in the middle school and also in the
senior school, they do less gym or PT, or whatever you refer to i t, that activity thing, to the extent where,
you know, “back in the day” we had gym like every week all year round.
The President: Mm-hmm.
Sen. Anthony Richardson: Whereas now, I am like,
Guess what? The comment sometimes is that, We
don’t have gym for an entire term. We deselected gym this term and have it next term. And I am like . . . this
is quite surprising to me.
And we all complain, I guess, around the t able. I did smile when Senator Simmons said that she
immediately went on the Internet to look w hat “obesogenic environment” was. I smile only because that
is an amazing aspect. But for our young people, they
use the electronic devices to an excess whereby on a
Saturday, for example–– we talked about it recently ––
we may be outside running around doing whatever,
where [our young people] would spend the entire day
in front of a TV monitor doing whatever they are d oing.
And so part of it, I believe, is going to be a
shift from the parents’ point of view to stop using the
electronic devices as a convenience for babysitting, effectively. Like, find a way to get outside, get the
children outside, get them engaged. Yes, there are
Bermuda Senate some other attending costs about paying for this, that
and the other, but we have to, I think, do more to e nsure that Bermuda as a country does do more activ ities.
And to add to that also, Members may not be
aware that Government does have initiatives to place
more outdoor exercise equipment throughout the I sland. I am not sure of the extent they are going to do
it, [if not] in all t he parks, but in [some of] the parks.
Again, my bias, being from St. George’s, I know that they have started to do so in the east whereby, you know, there is free equipment and I guess we can engage ourselves in going and working out, you know,
just doing some of those fun things. And some of
those things are actually free.
I know my personal preference sometimes is
to ride a pedal bike, which is not as easy as people think sometimes. When you do it, it is nice. You can
go do [these] things, you know, it’s relatively free and
not too much stress on your body.
Now, I will try, Madam President, to go
through some of the direct questions. Starting with Senator Jardine, I think there is a general lament with
you in terms of there is going to be less chocolates
available.
[Laughter]
Sen. Anthony Richardson: However . . . sorry, Madam President. The good news, though, is that there are, apparently, sugar -free chocolates. And to the extent that there are sugar -free chocolates —
[Crosstalk and laughter ]
Sen. Anthony Richardson: Madam President, I am
being told that nobody wants a sugar -free chocolate.
[Laughter]
Sen. Anthony Richardson: However, Senator
Jardine, that is going to be the option if you want to
keep on consuming without the increased costs.
There was also the question of the impact of
cost to small businesses. And if I may, Madam Pres ident, I want to read a short portion. There is a formal response to that.
The President: Mm-hmm.
Sen. Anthony Richardson: And it is that, approved
bakers or pre -approved manufacturers, bakeries, and
itinerant restaurants will be able to obtain a 5 per cent
concessionary rate on sugar in one of two ways. If
they are importing sugar themselves, they can complete a customs declaration form and take a copy of their licence from the Department of Health with the
declaration and that will enable them to get the 5 per cent. Or, if they are purchasing sugar from another approved business, from a wholesaler, the buyer must
provide the seller with a copy of their licence from the
Department of Health.
So I will go to one of the importers, for example, to buy some sugar. If I have a licence, I will show
them that and I will get the 5 per cent. And then they
in turn have to go to Customs to get their refund. So it
may be a bit cumbersome, to be honest, but there is a
process by which if I am small business and I rely on
the cost of my sugar, I will go through that process to
make sure that I am not unnecessarily impacted.
So, again, to the general public, the sugar tax
is 75 per cent, but for an approved business (let’s call
it) they can get a 5 per cent [tax] instead. Which I think
is quite reasonable.
Sen. Nicholas Kempe: Point of clarification.
The President: Senator Kempe, what is your thought
on that point of clarifi cation?
POINT OF CLARIFICATION
Sen. Nicholas Kempe: Yes, thank you.
I just want to understand. When a restaurant,
or a bakery, or whatever goes to a wholesaler or a
supermart with this kind of proof that they are eligible
for a lower customs’ rate, must the supermart whol esaler give them a discount? Or, is this something that
is agreed between the two parties?
The President: Senator Richardson.
Sen. Anthony Richardson: Madam President, I am
looking . . .
[Crosstalk]
The President: Senator Richardson is obtaining a
response to your question, Senator Kempe.
[Pause]
ANNOUNCEMENT BY THE PRESIDENT
SENATE VISITORS
The President: While we are waiting, I would just like
to acknowledge the fact that we do have represent atives from the Customs Department and Senator
Richardson is obtaining information from them.
And I would also like to welcome the young
people in the Gallery. There are some youngsters
here, actually, who are here observing.
Senator Richardson, you have a response to
Senator Kemp? You have the floor.
[Customs Tariff Amendment Act 2019, second read-ing, continuing]
454 27 March 2019 Official Hansard Report
Bermuda Senate Sen. Anthony Richardson: Yes, Madam President.
The response is that the importer must give
the reduction.
As a process, though, I am going to, as a
small business, I am going to need to prove to the
importer that I do have the exemption. And that is why
I was saying that, to the general public, if you are i mpacted, my suggestion would be to go to Customs and
make sure you go through that proper process, especially if the success of your business is dependent on
the cost of sugar for you.
I want to also say, as a general comment for
everybody present, that I find this process interesting
because a Senator has asked the question, there is a
very detailed response to that, and I do not know if we can easily convey the full answer in this format and
so, again, I say to any person that is impacted,
please, go to Customs and go through the process. It
is going to be very important. So, thank you, Senator,
for asking for clarification.
There was a question, Madam President, in
terms of a strategy, like, I guess, a long- term strategy
that goes with the sugar tax. And the answer is yes,
there is in fact a national strategy on diabetes. And it
is actually available on the Department of Health’s
website and it was published in 2018. So, yes.
There was also a question . . . I know I am
going by multiple Senators [and their questions] at this stage, but there was also a question in terms of breakfast cereals, and the Government has said that they
did not put the duty on all cereals at this stage because they wanted to do some more investigation to
make sure that they can separate out sweet breakfast
cereals from less sweet ones.
And if I may, Madam President, read a formal
response?
The President: You certainly may, Senator Richar dson.
Sen. Anthony Richardson: Thank you.
Following the initial intention, “there was fu rther feedback received and discussed and it was determined to defer the addition until the tariff code
could differentiate between high- sugar cereals from
healthy cereals.”
And so we did not wish to penalise healthy
breakfast cereals and inadvertentl y penalise families
which are trying to do the right thing. So those who
like Honey Nut Cheerios, for example, you can carry
on.
There was also a question in terms of fruit
juices . . . and I am trying to make sure I get this correct. So if they are 100 per cent fruit juices, the duty is
5 per cent based on the nutritional value. So there is
some element in that regard. But I take your point
clearly, Madam President, in terms of the lesser sugar
content beverages should be encouraged to be consumed. One t hing I think we missed, all of us, certai n-ly, is that the least expensive beverage is probably the
most abundant one, which is water, encourage us to
drink more water.
There was also a question in terms of . . . I
actually answered this earlier, about th e duty. The
duty is charged, I said earlier, on the value of what
you are buying, it does not include all of the shipping
and the rest of it.
There was a question . . . I might have r epeated this one, sorry.
[Pause]
Sen. Anthony Richardson: I think that is a repeat.
Okay.
Madam President, Senator Simmons asked
the question in terms of will the Minister of Finance
consider further relief on healthy goods? And I think
that [answer] is yes.
The President: Address the Chair.
Sen. Anthony Ri chardson: Sorry, Madam President.
That answer is yes. For the Government, it is
a question (I think I read this earlier) of ––reducing the
duty on various goods is going to cause a reduction in
Government revenue, and so there will have to be
some offset. Having said that, the consideration also
is what Senator Campbell said earlier, the bigger pi cture. So we have to now do some more work, of
course, to make sure that we can make the correct
decisions in terms of is there going to be a direct cor-relation between reducing the value of so- called
healthy goods to an absolute minimum and how would that be compensated either in reduced health costs or
other revenue.
And I will say again, from my earlier comments, one of the activities of the Price Control Commission is to look at some of Bermuda’s prices. And I
will say again that there is no question of us trying to
impose price control. But there is the intention to ensure that prices are not unnecessarily high or [that
price -gouging occurs]. Because that is not going to be
appropriate either. I know I always use the example of grapes. Grapes are not inexpensive, and the reality is, are they at an appropriate price or not? And unfort unately for all of us it seems as though the grapes are
on the shelves on, let ’s say, a Thursday and by Saturday they are going brown or something. And so we
have to really understand that.
And I was interested to hear also, and I hope I
got this right, that things, for example, like apples, they are actually grown once a year. And so are act ually stored, once they are picked, until they are needed. So it is not as though you pick apples every
month, for example, and so we have to understand
some of the realities of food. We always talk of course in terms of, you know, you have to buy the product
overseas and you got to ship it here and do all these
Bermuda Senate kinds of things. And so, again, the idea now is to try to
ensure that we understand the pricing mechanisms for
the local providers and also to ensure that the consumers are aware of the n ature, you know, the components of prices, and hopefully in a bigger way, to
change purchasing habits where necessary because
this will all have an impact on the sugar tax that we
are talking about, or the impact of those goods.
And so I want to conclude by saying that,
clearly, this is not an intention from Government to
penalise individual consumption, [but] trying to en-courage us to make healthier choices so that in the
long run Bermuda will benefit from reduced health
care costs, because ultimately, w e all do pay the price
for poor health choices because the health system
has to then bear the brunt of their role, and of course
that is affecting our health payments and all that kind
of stuff, so . . .
Madam President, I think I have answered all
the q uestions.
The President: Senator Kempe, you have a question
that you wanted a response or have not had a r esponse for? Sen. Nicholas Kempe: Yes, thank you, Madam President. Thank you, Senator Richardson.
My question was asked about the . . . I think I
got a bit of an answer with the comment on breakfast
cereal, that the duty is not being increased on sugary
cereals, because this amendment does not have the
ability to distinguish between breakfast cereals t hat
have a lot of added sugar and a minute amount of
added sugar. So I think that answers my question
about the per kilo rate.
But I guess it goes to there if you are getting a
snack bar. One that has a drop of honey and high -
quality ingredients will suff er a 75 per cent increase
based on its purchase price, as well as a candy bar
that is mostly sugar.
This Act does not distinguish between snack
items which are healthier, and perhaps more expen-sive, and [those which are] very sugary and cheaper in nature. So it perhaps could curb behaviours toward
the less healthy options. I just wanted clarity on how the duty is assessed and the unintended cons equences.
Sen. Anthony Richardson: Madam President, may I
just confer . . . ?
The President: Yes, you certainly may, Senator
Richardson. You can confer with your . . .
[Pause ]
The President: Senator Richardson, I believe you
have a response.
Sen. Anthony Richardson: Madam President, the
response is that there is the intention to try to differentiate based upon the quantity in certain products. And
I was interested to learn that honey is not deemed to
be sugar, so those products will not be impacted.
But to address S enator Kempe’s question directly, some of the goods that are imported, the customs officers are able to distinguish based upon the
content which tariff code to use, and they will exercise
their discretion. Because the intent is not to negatively
impact ite ms, in this case snack bars that do not have
sugar.
As the brief said, there is the intention to do
some more work. Because the tariff codes themselves are fairly rigid, and it is not going to be as easy as we
may think, or at least as immediate, to try t o change
the actual tariff codes, so they will continue to work
until we can get this a little bit more efficient.
The President: Thank you, Senator Richardson.
Now you will do your second reading.
Sen. Anthony Richardson: Madam President, I
move that the Bill entitled the Customs Tariff Amendment Act 2019 be now read a second time.
The President: Is there any objection to that motion?
No objection.
[Motion carried: The Customs Tariff Amendment Act
2019 was gi ven a second reading.]
SUSPENSION OF STA NDING ORDER 26
Sen. Anthony Richardson: Madam President, I
move that Standing Order 26 be suspended in respect
of this Bill.
The President: Is there any objection to that motion?
No objection.
[Motion carried: Standing Order 26 suspended.]
BILL
THIRD READING
CUSTOMS TARIFF AMENDMENT ACT 2019
Sen. Anthony Richardson: Madam President, I
move that the Bill entitled the Customs Tariff Amendment Act 2019 be now read a third time.
The President: Is there any objection to the third
reading?
No objec tion.
Sen. Anthony Richardson: Madam President, I
move that the Bill do now pass.
456 27 March 2019 Official Hansard Report
Bermuda Senate The President: It has been moved that the Bill ent itled the Customs Tariff Amendment Act 2019 do now
pass.
Is there any objection to that motion?
No objection.
The Bill is passed.
Thank you, Senator Richardson, for all the
time you have taken to answer questions.
[Motion carried: The Customs Tariff Amendment Act
2019 was given a third reading and passed.]
The President: We move now, Senators, to the third
item on the Orders of the Day and that is the Customs
Tariff Amendment (No. 2) Act 2019.
Senator Campbell, you have the floor.
BILL
SECOND READING
CUSTOMS TARIFF AMENDMENT (NO. 2) ACT 2019
Sen. Vance Campbell: Thank you, Madam President.
Madam President, I move that the Bill entitled
the Customs Tariff Amendment (No. 2) Act 2019 be
now read a second time.
The President: Is there any objection to that motion?
No objection.
Carry on, Senator Campbell.
Sen. Vance Campbell: Madam President, this Bill
proposes to amend the Customs Tariff Act 1970, the
principal Act, with measures that include
(1) increasing the import d uty rates for alcoholic be verages and tobacco products, and (2) amending certain end- use reliefs. These measures affect the First
and Fifth Schedules to the principal Act.
Madam President, in the Budget Statement in
support of the Estimates of Revenue and Expenditure
2019/20, the Government promised to raise duty on
cigarettes and tobacco, and on beer, wines and spi rits. The increased duty rate is expected to achieve
additional customs revenue of about $1.5 [million] to
$2.5 million. Accordingly, the Bill proposes the follo wing duty increases: The duty on beer and cider will increase by $0.10, from $1.26 per litre to $1.36 per
litre. The duty on wines will be increased by $1.00,
from $5.00 per litre to $6.00 per litre. Duty on spirits, liqueur and cordials will increase by $0.65, from
$31.35 per litre of alcohol to $32.00 per litre of alc ohol.
The duty on cigarettes will increase by $0.03
per cigarette, from $0.37 to $0.40 per cigarette, or $80.00 per carton of 200. The duty on all other tobac-co products, except cigars, cheroots and cigarillos will
increase to $500 per kilogram in order to achieve ef-fective parity with the duty rate for cigarettes. And if anyone is wondering what a cheroot is, it is a cigar
with both ends that are clipped, they are open, and it
is on paper. So.
[Laughter]
The President: We are duly edified.
[Laughter]
Sen. Vance Campbell: It sounds more like a veget able; that is why I had to look it up.
Madam President I now progress to the
measure of the Bill containing end- use reli efs.
Madam President, in the Budget Statement, it
was pointed out that the most significant items of capital development expenditure in the 2019/20 budget included school maintenance at $3 million. In order to
help that expenditure go that much further, t he Bill
proposes to add the following items to the list of qual ifying goods under CPC 4110, [Customs Procedure
Code] which provides duty relief for school equipment
and educational supplies: Lighting fittings, wall clocks,
network equipment and cabling; telephones; flooring
materials and systems; security cameras; plumbing;
drywall supplies; dollies and casters; and doors, wi ndows, and their frames and thresholds for doors.
Madam President, the Bill also proposes to
amend CPC 4195, which currently provides duty relief
for chemical products and equipment for combating oil
pollution. It is intended to widen the scope of relief
under CPC 4195 to include all goods for combatting
pollution. As a control measure, the Environmental Engineer of the Department of the Environment and
Natural Resources [DE NR] shall certify that the goods
are eligible for this expanded relief.
Madam President, I will take this opportunity
to mention that Bermuda Customs puts into practice a
recommendation of the World Customs Organizati on
[WCO] aimed at speeding up the forwarding of goods
in the event of disasters, including pollution events. In
the case of imports, Customs will permit the duty -free
release of goods on presentation of the relevant cargo
manifests. No import declaration or monetary security
is required upon the importation of relief consignments. No export declaration is required for temporary imports of emergency items.
Guidance on customs import procedures for
goods for disaster management and humanitarian aid can be ac cessed on the governmental portal.
Madam President, the Bill further proposes to
amend CPC 4215, which provides duty relief for goods for commercial goods production. It is intended
to widen the relief to allow the duty -free importation of
retail packaging of local animal and vegetable products. The predominant packaging matter for local pr oduce is clear clamshell packaging. Such packages are largely supplied to commercial farmers via DENR [or the] Agricultural Service Centre. The packaging is deBermuda Senate signed to keep local produce clean and safe for human consumption in order to ensure high quality and
to prolong shelf life.
This expanded relief will help to reduce local
food production costs, allowing local farmers to better compete with cheaper overseas imports.
Madam President, the Bill also proposes to
amend CPC 4196 to provide further duty relief on medical equipment and supplies in relation to goods
used to compensate for a physical, mental, or learning
disability by extending the scope of goods cov ered
under this CPC.
Finally, Madam President, the Bill does a little
housekeeping in a simplified tariff, heading 9803, and in the Fifth Schedule to the principal Act. In the simpl ified tariff, the tariff code for footwear and watches is to
be split int o two separate tariff codes, one for footwear
and one for watches. This split is revenue- neutral.
Also, the tariff code for smoking tobacco and cigars is
similarly split, and the new $500 per kilogram rate is
applied to smoking tobacco. Cigars will remain dutiable at 35 per cent of the value.
Madam President, in the Fifth Schedule, it is
proposed to correct a small number of outdated references to the Director of the Department of Environmental Protection. The new style is, correctly, the D irector of the Department of Environmental Protection
and Natural Resources.
With that, I thank you, Madam President.
The President: Thank you, Senator Campbell.
Would any Senator care to speak on this Bill?
Senator Kempe, you have the floor.
Sen. Nicholas Kempe: Thank you, Madam Pres ident. Thank you, Senator Campbell, for your prese ntation.
I have a couple of questions as it relates to
this Bill. One of the ones, when I look at CPC 4110,
which is on page 3 of the copy we have.
I note that the eligible beneficiary is all impor ters and there are such things as classroom and office stationery, art equipment and supplies, sports, phys ical education and recreational equipment, which are
items that pretty much any parent of a school -age
child could purchase. So I guess I w ould like to know,
seeing as it is not limited to just teachers or just
schools that are purchasing this stuff, is the onus that
is going to be put on the commissioner of education to
certify the goods that are eligible for this relief going to
be cumberso me?
It is a very large pool of eligible beneficiaries
and so I am worried that the scope of relief and the
burden being put on the commissioner could cause a
lot of unnecessary bureaucracy. And I just wanted to
get some more clarity around the eligible beneficiaries and the end- use restrictions.
I would also like to talk about the heads on
page 2 of the copy we have. [Tariff code] 9803, I note with curiosity that cigars and cigarillos and stuff have
a 35 per cent rate whereas we are taxing items with
any added sugar at 75 per cent. It just seems an i nteresting contradiction.
I would also like to point out that smoking t obacco or otherwise, I guess, known as lib, is at $500 a
kilo and my concern is some of the unintended co nsequences around that. I am fam iliar that many people will switch from kind of their store- bought prerolled cigarettes to a loose smoking tobacco in order to curb their consumption of tobacco. And by massiv ely playing with the price point on this I am worried that
there will be some di sincentives for those people tr ying to use self -rolled cigarettes as a reduction of consumption strategy.
The President: Thank you, Senator Kempe.
Would any other Senator care to speak on
this Bill?
Senator Jardine, you have the floor.
Sen. James. S. Jardine: Thank you, Madam Pres ident.
Madam President, I just had one question and
it is on page 2, dealing with the 9803.141 and
9803.143 on footwear and watches.
I understood the Senator’s comments that the
changes were revenue- neutral. I was interested to
know what the change was on the duty rates for
watches, which are now stated at 12.5 per cent. I do
not recall what the other rates were, but I do recall
some while ago, I believe it was last year, it may have been the year before when changes were made to
this particular category. There was concern expressed
by some of the retailers who sell watches, principally
to tourists who come here. Because of our competitive
duty rate, they were able to sell them at a reduced
price when compared to the United St ates. And so
this was a very significant part of their business.
So I would be concerned if this rate of
12.5 per cent was significantly more than what the
rate was last year because it will harm their busines ses. If it is the same rate, then that is fine. But I just ask that question. I did not have an opportunity last night
to go online and check what the old rate was. So I would be anxious for an answer on that question.
Thank you, very much, Madam President.
The President: Thank you, Senator Jardine.
Would any other Senator care to speak on
this Bill?
[Inaudible interjection]
The President: Senator Kemp, you have additional
questions?
Sen. Nicholas Kempe: Yes, I know I am not allowed
one, but an extra one to the Chair. I just want to point
458 27 March 2019 Official Hansard Report
Bermuda Senate out wh at I feel may be an errata in the Bill. Under [tariff code] 9803.141 and 9803.143, this is replacing
9803.141 which levied the duty rate on unit of classif ication —a unit. It is now being levied on a kilo. So you
are going to pay 6.5 per cent per kilo of shoes, and
12.5 per cent per kilo of watches, which seems rather
counterintuitive.
The President: Thank you, Senator Kempe.
Would any other Senator care to speak on
this Bill?
No? Then we will wait for Senator Campbell to
get the answers to the questions that have been
raised.
[Pause]
The President: Senator Campbell, I see you are back
in the chair. You have an answer to the question?
Sen. Vance Campbell: I have a couple of answers,
yes.
The President: You have the floor.
Sen. Vance Campbell: In reference to Senator
Jardine’s question, the duty on watches and shoes
has not changed. That is just to give each category its
own separate tariff code. So that has not changed.
I am told that the “kilo” reference in that area
will be changed. It is an error, and it will be corrected.
So, hopefully, that alleviates any fears in that area.
The rate of 35 per cent on cigars was left in
place from a tourism perspective. As it relates to, I think, the tobacco itself, the loose tobacco as opposed
to . . . this here closes a loophole whereby the Go vernment was losing a few million dollars a year in re venue. So this closes that loophole.
I am waiting for further clarification when it
comes to whether this will be burdensome on the commissioner of education.
Sen. Nicholas Kempe: Madam President, I am not
sure if this is a point of order or a point of clarification.
The President: What is your point of clarification?
POINT OF CLARIFICATION
Sen. Nicholas Kempe: The Member stated that as it
relates to the new [tari ff code] 9803.141 and
9803.143, that it was both revenue- neutral and did not
change the existing tariff.
However, 9803.141 (if I have the correct copy
of the customs tariff in front of me) appears to be a consolidated rate, as one would expect as it was one, and it is listed at 12.5 per cent. So one of the footwear
is now being desegregated from the combined tariff code and it is at a lower rate, so it is neither revenueneutral nor is it the same rate.
The President: Thank you, Senator Kempe.
[Pause]
The President: We are awaiting a response to the
additional question.
[Pause]
The President: Senator Campbell, you have a r esponse?
Sen. Vance Campbell: Thank you, Madam President.
The President: You are welcome.
Sen. Vance Campbell: In reference to whether this
will be burdensome to the commissioner of education,
I am advised that the end user must be registered un-der section 12 of the Education Act 1996, which bas ically means schools.
The President: Mm-hmm.
Sen. Vance Campbell: I am also being told that when
it comes to footwear it ties back to the First Schedule,
and the duty rate in that Schedule is 6.5 per cent. The
12.5 per cent that we see here is related more to co uriers than the average person.
Sen. Nicholas Kempe: Point of clarification.
The President: You are accepting the point of clarif ication?
Sen. Vance Campbell: Not at this time, Madam President.
The President: We will carry on then and move
your—
POINT OF ORDER
[Misleading]
Sen. Nicholas Kempe: Point of order then, Madam
President. The Member may be inadvertently misleading the Senate.
The tariff code that is being amended in this
Act that is before us, amends chapter 98, which is for couriers. So any footwear brought in through a courier
will now be 6.5 per cent instead of 12.5 per cent,
which will result in a decline in revenue.
[Pause]
Bermuda Senate Sen. Vance Campbell: Madam President, I am advised that the couriers have the option to go to the
First Schedule and bring the goods in at 6.5 per cent,
and that is what they would do rather than bring any in at the higher rate. So that is what I am advised, Mad-am President.
The President: Thank you, Senator Campbell.
You will now move on to move the Bill, the
second reading.
Sen. Vance Campbell: Thank you, Madam Pres ident.
Madam President, I move that the Bill entitled
the Customs Tariff Amendment (No. 2) Act 2019 be
now read a second time.
The President: Is there any objection to that motion?
No objection.
Carry on, Senator Campbell.
[Motion carried: The Customs Tariff Amendment
(No. 2) Act 2019 was gi ven a second reading.]
SUSPENSION OF STANDING ORDER 26
Sen. Vance Campbell: Madam President, I move that
Standing Order 26 be now suspended in reference to
this Bill.
The President: Is there any objection to that motion?
No objection.
[Motion carried: Standing Order 26 suspended.]
BILL
THIRD READING
CUSTOMS TARIFF AMENDMENT (NO. 2) ACT 2019
Sen. Vance Campbell: Madam President, I move that
the Customs Tariff Amendment (No. 2) Act 2019 be
now read a third time.
The President: Is there any objection to the third
reading?
No objection.
Sen. Vance Campbell: Madam President, I move that
the Bill do now pass.
The President: It has been moved that the Bill ent itled the Customs Tar iff Amendment (No. 2) Act 2019
do now pass.
Is there any objection to that motion?
No objection.
The Bill is passed.
Thank you, Senator Campbell.
[Motion carried: The Customs Tariff Amendment
(No. 2) Act 2019 was given a third reading and
passed.]
The President: Moving on to the Orders of the Day,
item 14, Motions.
MOTIONS
The President: There are none.
Item 1 5, Congratulatory and/or Obituary
Speeches.
CONGRATULATORY AND/OR
OBITUARY SPEECHES
The President: Would any Senator care to speak on
this?
Senator Richardson, you have the floor.
Sen. Anthony Richardson: Madam President, just a
brief congratulations which is extended to the Berm uda College, generally. And in particular, Dr. [Phyllis]
Curtis -Tweed, Dr. [Duranda] Greene, and the other
support staff on the introduction of the Phi Theta Kappa sorority . And th ey did it on the basis of the students
who were inducted on the basis of academic excellence. And I emphasise the fact that there were, I
think, 12 persons who were inducted and some of the
students were dual enrolment students.
The implications, or the f act, rather, is that
some children will go, to say, Berkeley and CedarBridge and Bermuda College, and their grades were
higher than full -time students at Bermuda College.
And so the reality is, students who are, say, age 16, 17, and maybe some 18, would more than adequately
compete at the college level and be able to attend
high grades to be inducted into sorority. And som etimes . . . well, we do sometimes here we do not give
appropriate credit to these successes.
So, again, I say congratulations to the Berm uda College for the work they are doing on behalf of
our young people.
Thank you.
The President: Thank you, Senator Richardson.
Would any other Senator care to speak?
Madam Attorney General, you have the floor.
Sen. the Hon. Kathy Lynn Simmons: Thank you,
Madam President.
I would like to send best wishes to the players
and parents and coaches for the Kappa Football
Tournament that I believe is taking place over this weekend. As a mother of footballers, I remember
many, many, many, many years of attending this tournament with all the early morning preparations and
anxiety during the day. But it is truly a wonderful tour460 27 March 2019 Official Hansard Report
Bermuda Senate nament that draws a huge arm of support from me mbers of the community. And so to the fraternity, W ell
done , once again. And to t he children (youngsters, I
should say), I wish them all the best for an enjoyable
tournament and that they maintain their sportsman-ship and enjoy the occasion.
Thank you, Madam President.
The President: Thank you, Madam Attorney General.
And I am sure w e, all Senators, will join you in those
comments.
Would any other Senator care to speak on the
congratulatory and/or obituary speeches?
If not, we will move on to adjournment.
Madam Attorney General —
ADJOURNMENT
Sen. the Hon. Kathy Lynn Simmons: Madam Pres ident, yes, I move that we adjourn to Wednesday, May
8th.
The President: Would any Senator care to speak on
the motion to adjourn?
Sen. the Hon. Kathy Lynn Simmons: May I Madam
President.
The President: Yes, you may, certainly.
VOTE OF THANKS T O THE
MINISTRY OF FINANCE TEAM
Sen. the Hon. Kathy Lynn Simmons: I would like to
take this opportunity as we rise to thank the Gover nment’s technical officers and the Ministry of Finance
for the work that they did in preparation of the heads
for the Budge t Debate this year.
I would also like to acknowledge the parli amentary counsel who have worked tirelessly once again to move the Government’s legislative agenda,
so in behalf of the Senate, and special thanks to my
team today, Ms. Amani Lawrence. I will say this, there are times that the parliamentary counsel goes far
above the responsibility to draft legislation and actua lly aid ministries and permanent secretaries in other
areas, particularly with respect to the brief, and so my
team is very dedicated t o making sure that we give a
thorough briefing in terms of the agenda that we advance with respect to our legislation, and so to Ms. Lawrence, thank you very much, as to the rest of the
team.
And on behalf of the Senate, we look forward
to the next session and the collaboration that ensures
that we all are successful.
Thank you, Madam President.
The President: Thank you, Madam Attorney General. With that, the Senate stands adjourned until
May the 8
th.
Enjoy your recess. Thank you.
[At 11:47 pm, the Senate stood adjourned until
10:00 am, Wednesday, *8 May 2019]
*[The Senate resumed on Wednesday, 22 May 2019]
Hansard Transcript
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