Thank you very much for inviting me here once again to present on behalf of the Canadian Beverage Association, which represents the non-alcoholic, non-dairy beverage industry.
We believe it is essential as a supercluster-identified sector that we engage with the government and Parliament to help create Canadian jobs, encourage economic growth, and drive investment. CBA members generate employment for more than 60,000 Canadians at better-than-average wages. Beverage industry salaries are, on average, 26% to 38% higher than the average for all manufacturing industries across the country. We contribute over $500 million in tax revenue to the federal government and an additional $400 million in provincial taxes.
We are a leading partner of small business in Canada. The sales of our members' products through grocery stores, food service vending machines, and convenience stores support tens of thousands of independent jobs and hundreds of thousands of retail and food service jobs.
I'm pleased that the MPs on this committee come from the Northwest Territories, British Columbia, Alberta, Ontario, Quebec, and Prince Edward Island. As an industry, we have a connection with each of your regions. For example, our members work with farmers to source sugar beets from Alberta and buy corn from Ontario. We purchase apples from B.C., Quebec, Ontario, and Nova Scotia, purchasing from 350 apple growers in Quebec alone. Our aluminum cans come from Whitby, Ontario. We employ people at distribution facilities in the Northwest Territories, and some of North America's largest manufacturing and distribution facilities are located in the 905 region.
Our members are making significant capital investment in Canada, bringing new technologies and efficiencies into the sector, such as having the largest fleet of hybrid trucks in North America. All the while, we employ well-paid, hard-working, middle-class Canadians. Our innovation is not limited to investment in our businesses. We also invest in strategies that will help support better health outcomes for Canadians. Launched in 2015, our industry-led “balance calories” initiative aims to reduce the calories consumed by Canadians from non-alcoholic, non-dairy beverages by 20% by 2025.
Very shortly, the Conference Board of Canada, our partner in our balance calories initiative, will be releasing our second report on the impact of our initiative. We expect that this report will show at least a 9% decrease in calories—calories being sugar—in our products since 2015. This means that in just 11 years our industry has already removed 29% of the calories that Canadians consume from our beverages. This is unprecedented in the food and beverage industry. As shown in the Ads Standards 2016 compliance report on the Canadian children's food and beverage advertising initiative, we have a positive record as an industry in adhering to our guidelines on marketing to children, which ban the marketing of our products to children under the age of 12.
The beverage sector shares the government's vision of building economic growth and benefits in Canada through innovation in the agrifood sector and throughout the food and beverage value chain. However, our members are concerned about increasing barriers to growth, including financial risks that impact our members on a daily basis, and speculation around a sugar tax and significant regulatory changes. The changes to front-of-pack labelling and CFIA regulations alone, according to Industry Canada, are estimated to cost the food and beverage sector over $2 billion over the next several years.
Coupled with those expenses, we understand that an economic impact analysis of the severe restrictions on advertising inherent to Bill S-228 commissioned by the Association of Canadian Advertisers shows a multi-billion dollar impact on GDP and revenues for Canada's struggling media industry and sponsorship of amateur sports, cultural events, and community giving; lost tax revenues for Ottawa and the provinces; and tens of thousands of job losses.
The CBA and its members recognize that obesity poses a critical challenge to individuals, public health, and government resources. At the same time, Statistics Canada data shows that the consumption of calories from beverages in Canada has continued to decline as obesity rates, unfortunately, have increased over the last 20 years. Proponents of a tax on our industry often point to Mexico as a success story, but the data coming out of Mexico's own reports is demonstrating that this is not the case. It shows that obesity has continued to rise. The revenue from the tax has also continued to rise, and 60% of that revenue is coming from Mexico's poorest households. We also know that there have been 11,000 job losses up and down the value chain. These are not the markers of a successful health or tax policy.
The Mexican tax also applies to a broad range of products, not just beverages, so even with that broad array of products targeted for taxation, there are no positive health outcomes. Why would anyone think that a narrow tax on products that supply 4% of calories to Canadians would make any difference?
What we are asking government and your committee to do, Mr. Chair, is quite simple. Protect our jobs and investment in Canada by ensuring regulation, policy, and taxation measures are principle-based, science-based, and equitable. Recognize that the Canadian beverage market is already evolving in a positive and significant way, and refrain from implementing any targeted attacks on a single industry.
In conclusion, the beverage sector has built its success on science, evidence, and innovation, and we continue to be encouraged by a chance to work with a government that understands the importance of public policy that works for Canadians and not against Canadians or Canadian workers.
Thank you.