<cfprocessingdirective suppresswhitespace="yes" pageencoding="utf-8">
Then one of our colleagues found this in the Adobe Docs
cfprocssingdirectivetag has limitations that depend on the attribute you use. For this reason, Adobe recommends that you include either the
suppresswhitespaceattribute in a
cfprocessingdirectivetag, not both."
Ah hah. Afterwards we began to modify the templates.
<cfprocessingdirective pageEncoding="utf-8" />
It struck me however after playing around with the tag that the suppressWhitespace attribute did not seem to have an effect on the white space emitted. The white space was being stripped out regardless whether the tag was present or not. A quick check showed me that the "Enable Whitespace Management" Option on the server was active.
Thus it appears this setting essentially replicates at the page level the global setting for Whitespace Management.