Bonjour and thank you very much, Mr. Chair.
I thank the members of the committee for inviting the Canadian Health Food Association here today.
My name is Penelope Marrett and I am President and Chief Executive Officer of the Canadian Health Food Association.
The Canadian Health Food Association, CHFA, is Canada's main national commercial association for natural and organic products. It represents more than 1,100 businesses, including growers, retailers, manufacturers, importers, distributors, consultants and health care providers. Serving Canadians from sea to sea, CHFA has faith in a world in which natural and organic products are an integral part of health and well-being.
In 2004 the natural health products regulations came into force. Natural health products include vitamins and minerals, herbal remedies, homeopathic medicines, traditional medicines such as traditional Chinese medicines, probiotics, and other products like amino acids and essential fatty acids. This sector is valued at $2.5 billion a year, a significant contributor to the Canadian economy.
The regulatory requirements to license some 50,000 products and over 800 domestic sites have led to serious challenges in the marketplace, including decreased product innovation, inability to advertise, and consumer confusion.
Furthermore, the current backlog of product licence applications is creating additional challenges to the industry, thereby creating consumer concerns and the inability to obtain necessary international trade certificates for export purposes.
We applaud the government for providing additional funds in the 2008 federal budget to the natural health products directorate for its regulatory responsibilities. However, it will be important for these funds to continue to flow over the long term and to be used in a manner that will enable a fair, predictable, and consistent regulatory environment. We are very concerned with the increasing pressure on the directorate to deal with the more than 41,000 applications it has received since 2004. Up to 50% of these applications have been refused or withdrawn, and just over 16,000 have been approved. That's taken five years.
Further, changing and increasingly rigid policy interpretations continue to frustrate applications, which is not within the spirit of the 1998 report from the Standing Committee on Health, “Natural Health Products: A New Vision”. According to a recent Health Canada survey, approximately three-quarters of Canadians—that is, 24 million Canadians—regularly take natural health products. As the demand continues to grow for these types of products, we believe the government needs to take specific steps to address industry and consumer needs and concerns.
As an industry dedicated to the health and well-being of Canadians, we want to ensure that Canadians can continue to rely on safe, effective, natural health products. However, this can only been realized if the directorate has a clear direction on how to move forward and the support of the department and stakeholders and is provided with the necessary resources and expertise.
On June 30, 2009, the organic products regulations came into force. Our members have expressed concerns about potential issues with the implementation of the regulations, including the importation of organic products. Canada imports approximately 60% to 70% of organic products throughout the year in order to supply Canadians. Canadians want to have access and choice. This government must ensure Canadians are able to continue to enjoy access and choice in a fair and predictable manner.
An increasing number of Canadians continue to purchase organic products. The Canadian organic sector is valued at $1 billion a year and growing at a rate of approximately 20%. Smart regulations are key to fostering competitiveness and a sound economy for all Canadians. It is predicted that consumer demand for natural health products and organics will continue to grow as more Canadians, in their quest to achieve optimal health and well-being, discover the health benefits associated with these products.
Permanent funding, such as A-based funding, is required to ensure appropriate expertise and resources for both the natural health products directorate and the Canada organic office. The government must ensure a fair, predictable, and consistent regulatory environment for natural health and organic products in Canada to enable Canadians to continue to have access and choice to a wide variety of safe, high-quality, natural, and organic products, which they demand. We must work together to ensure that this industry is able to continue to thrive and grow in Canada.
Thank you for your time today and for the opportunity to present to the committee on behalf of natural products and organics industries. I'll be happy to answer any questions.