New labelling requirements and cost-recovery fees for natural health products are a tough pill to swallow for the sector.
On July 6, 2022, Health Canada published amendments to the Natural Health Products (NHP) Regulations that are set to take effect in 2025. The intent is to make information on labels clear and consistent, and to make it easy for consumers and health professionals to locate, read and compare important safety information. According to Health Canada, “Poor communication of key information on health product labels can lead to incorrect purchases and preventable harms.”
But opponents argue it’s a bunch of red tape that will lead to increased costs and fewer products on store shelves for Canadians.
The Canadian Health Food Association (CHFA) argues that Health Canada didn’t consider feedback on the labelling changes or back up the changes with science. Instead, Health Canada created a “very technical and inflexible guidance document that is difficult for brands to comply with.”
“It’s a solution in search of a problem to some degree,” says CHFA president and CEO Aaron Skelton. “If you look at the table requirements, prescription updates, and font sizes and designs, there’s no validation on why that’s needed or how that’s going to help increase Canadians’ ability to access those products safely. If anything, what it’s required is industry to invest a significant amount of dollars in revamping labelling and design, and buying new equipment that can install this new labelling.”
To find out how the changes will impact industry, CHFA conducted an economic impact study with Deloitte. In a survey of businesses throughout the supply chain, 76% of brands said they will need to pull product from the market because of the new regulations, one in five companies said they are seriously considering leaving the Canadian market, and 83% indicated they have a low capacity to absorb the costs of the legislative changes. The study notes that the sector is dominated by small businesses of less than 50 employees (80%).
“Overall, the theme of the study was a thriving industry [$13.2 billion and growing] that is being throttled by overregulation by the government,” says Skelton.
The impacts will be wide-ranging, according to CHFA, which notes that natural health products include vitamins, minerals, probiotics, herbals, traditional and homeopathic medicines, and certain topical products like toothpaste and sunscreen.
“There will be fewer businesses on Canadian soil serving Canadians’ needs,” says Skelton. “There will be fewer products available on shelf because retailers will have fewer suppliers to draw from. The sector as a whole will contract, there will be less employment derived through this sector, and ultimately the big concern is Canadians are still going to want the products that they believe can support and help them.”
That means Canadians “will look to the international marketplace where you can buy – under the 90-day exemption rule – up to 90 days of supply of unregulated and unmonitored products,” says Skelton.
The sector isn’t just concerned about the increased cost of doing business given the new labelling regulations. This past May, Health Canada proposed new fees for NHP regulatory activities such as product evaluation, site licenses and annual renewal fees. The proposal is still in the consultation phase, with implementation slated for 2025 – the same time as the new labelling requirements, notes Skelton. “In isolation, it’s concerning and alarming, but in totality, it’s shocking,” he says.
Joe D'Addario, CEO of health food supermarket Nature’s Emporium, says he shares the natural health community's concerns about the potential impact of these fees on the accessibility and affordability of natural health products.
“The proposed changes by Health Canada, if enacted, would severely harm the natural health food industry in Canada,” he says. “These changes would not only reduce the competitiveness of Canadian natural health product producers but also force consumers to seek alternative shopping options, most likely across the border, to acquire products that were once easily accessible and widely available.”
While the new labelling requirements are indeed coming, CHFA’s hope is to get the Minister of Health’s office to pause and open the guidance on the regulations. “We think there is a need for the Standing Committee on Health to do a study on what the cost to industry will be, what the implications will be, and what are some of the non-intended consequences of that,” says Skelton. “And a big ask of ours is to delay the implementation date. To have compliant products on shelf by 2025 is very near and with a lot of these small businesses, it’s a very big financial challenge.”
To garner consumer support, CHFA has launched the “Save Our Supplements” campaign, where Canadians can get further information and get involved.