Thank you, Mr. Chair.
I appreciate the opportunity to be in front of the committee today to make my presentation on behalf of Canada's beverage industry.
The Canadian Beverage Association represents the manufacturers and distributors of the majority of the non-alcoholic, non-dairy beverages consumed in Canada. We are the national voice for more than 60 brands of juice, bottled water, sports drinks, ready-to-serve iced teas and coffees, enhanced beverages, carbonated soft drinks, energy drinks, and other non-alcoholic beverages.
The beverage industry, directly and indirectly, employs nearly 60,000 Canadians in 220 production facilities, offices, and distribution centres across the country. We generate $6.7 billion of economic activity and contribute over $500 million of federal tax revenue.
Given our location today, I would also like to take a moment to talk about our industry's footprint in Atlantic Canada. Our members are a significant economic driver in this region, providing over 3,000 people with well-paying jobs. Beverage industry employees earn more than the regional average in the manufacturing sector, and we have 31 facilities across the Atlantic provinces, including distribution centres for our largest members, Coca-Cola Canada and PepsiCo beverages. In fact, if you were to google “Coca-Cola or Pepsi employment” and ”Moncton” or “Fredericton”, you'd see job offerings coming up that are available right now in the region.
It is in that context that I am here to talk to you today. The food and beverage sector is highly regulated by the Government of Canada, which we appreciate. We support and work collaboratively with the government. The safety of Canadians through their consumption of food and beverages is our paramount responsibility.
That being said, our industry is highly susceptible to changes in federal regulation. Assuring a supportive and stable environment is critical for providing businesses with the opportunity to succeed and expand. There are multiple ways in which the Government of Canada can help us maintain this environment.
First, we recommend refraining from product-specific taxation. Our industry is under increased threat of product-specific taxes on sugar-sweetened beverages that are not based on evidence.
The consumption of sugar-sweetened beverages in Canada is declining. In fact, beverage calories overall have declined 20% in the last decade. At the same time, unfortunately, the incidence of obesity in Canada continues to rise. A tax on sugar-sweetened beverages is not a solution that reflects the reality of consumption patterns or the causes of obesity in Canada.
This type of taxation has been tried in multiple jurisdictions and the results have not been good. Mexico, which recently implemented a tax, saw an average reduction of only 4.7 calories in a diet of over 3,000 calories per capita. However, the instability the tax has created up and down the industry's value chain has led to a loss of 10,000 jobs.
Denmark implemented a much broader tax on sugar in the 1930s, and more recently on fat in 2014, and actually repealed both of those taxes due to how ineffectual they were.
Make no mistake, our members are committed to working with the government and the public to combat obesity, and we've been doing that by introducing new products with less sugar and fewer calories in them, but the reality is there is no magic bullet solution.
Experts, including those at Health Canada, agree that the factors associated with obesity are multi-faceted and complex and cannot be pinpointed to one single ingredient or action.
Beyond regulations or taxation around sugar, our industry also encourages the government to look at other methods that would help create a stable environment through regulatory modernization and removal of red tape. For example, our industry has spent more than two decades working with the government to remove the regulation requiring mandatory front-of-pack labelling for non-caloric sweeteners. No other jurisdiction in the world has this requirement.
Health Canada has stated on their own website that there are no risks associated with non-caloric sweeteners. And yet, we have spent more than 20 years talking to officials about removing this requirement with no movement. It is this type of over-regulation and red tape that has a negative effect on our members' ability to conduct business in Canada and bring new products to market that continue to drive those calories down in the beverages that Canadians consume.
The beverage industry is a little unknown but a significant economic driver in Canada, and we want to continue on that path. We welcome all opportunities to work with the federal government on legislation and policies while maintaining our industry's economic footprint across Canada.
Thank you again for this opportunity to appear. I look forward to your questions.