OTTAWA—The Liberal government isn’t ruling out imposing budget measures to tax employer-provided health benefits but opposition to the plan may be giving finance officials second thoughts.

The finance department has been weighing the possibility of making employer-provided health and dental plans a taxable benefit, a move that could add more than $1,000 to the income tax bills of the 13.5 million Canadians who have such plans.

Interim Conservative Leader Rona Ambrose pressed Prime Minister Justin Trudeau on the issue Tuesday, demanding to know whether his government was serious about the tax proposal.

“People rely on these for prescriptions and much-needed health programs. . . . Is he seriously going to put a tax on the health and dental plans of millions of Canadians?” Ambrose said in question period.

Trudeau sidestepped the question, saying only that the upcoming budget would help “Canadian families.

“We’re looking at ways within that budget to help Canadians, to invest in their future, to lower the cost of everyday goods and pharmaceuticals they need,” Trudeau said.

In a typical benefit plan, an employer contributes up to $3,500 a year — an amount that is currently not taxed, said Stephen Frank, senior vice-president of policy for the Canadian Life and Health Insurance Association

“If it becomes taxable, then the employee has to pay tax on that amount,” Frank said, adding that it could add about $1,300 a year to an individual’s tax bill.

Such a move could generate close to $3 billion in additional tax revenues annually, an attractive target for a government currently in the red.

But the proposal carries political risk — saddling taxpayers with an additional tax would undercut the Liberals’ narrative of wanting to help the middle class and could undo some of the benefits of an income tax cut brought in last year.

Industry groups also worry that such a tax would make health benefits less attractive, prompting companies to forgo offering such plans to employees, who would be left having to purchase extended coverage on their own.

“The middle and lower class are the ones who would be hit the hardest, by far,” Frank said.

Consideration of the plan has sparked mounting opposition from a diverse group of interests, including medical associations and unions.

“Our phones have been burning up on this issue from a variety of different organizations,” said Monique Moreau, vice president of national affairs for the Canadian Federation of Independent Business.

“We have expressed our concern to the minister,” she said in an interview.

Moreau noted that after Quebec taxed such plans in 1993, 20 per cent of employers stopped offering them.

“That may wind end up having an extra burden on the health-care system in the long run for people who are no longer maybe doing that preventative treatment,” she said.

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Running a deficit and facing a big bill for its infrastructure program, the federal government has been casting around for new sources of revenue as it readies the budget it will unveil in the coming months.

As part of that process, finance department officials launched a review of the tax system, which has apparently has put health benefits in the crosshairs.

The finance department was described as “hawkish” on the issue last fall and had clearly done analysis on the impacts of the measure, said one industry source who met with government officials.

Frank said his group got signals before Christmas it was “something they were looking at pretty carefully.”

In conversations with Finance Minister Bill Morneau and his senior staff, “none of them gave us any comfort that it wasn’t a pretty serious consideration for the government,” Frank said.

Dan Lauzon, a spokesperson for Morneau, declined to say this week whether taxing health benefits remained under active consideration.

“I can tell you that any changes we make will have middle class families in mind,” Lauzon said in an email.

However, behind the scenes, industry sources suggested that the lobbying campaign has made the finance department think twice about the measure.

“No one has taken it off the table but they’ve definitely gotten cold feet,” one source said this week.

One tax the Liberal government is not considering, according to Morneau’s office, is the much-discussed “Netflix tax.”

A spokesperson for Morneau’s office told the Star they had no plans to apply sales taxes to the streaming giant, or to impose any levy to support Canadian content.