Finance Committee on May 31st, 2024

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

At the outset, I would like to note that the witnesses are commenting on an important theme about the problems of omnibus bills and the use of budget bills for omnibus purposes.

Omnibus bills were used extensively by the Conservatives under the Harper government, which brought in very large omnibus bills. This meant the finance committee had to deal with issues on everything from the regulation of waterways to health products. Those issues were not able to go to the right committee, and we couldn't bring in the right stakeholders to fully scrutinize them.

In 2015, I think, the Trudeau government promised it would not use omnibus bills, and here we are today, in 2024, with the same problem. That's an important structural observation that I think needs to be put on the record. Every government of every hue needs to pay heed to this, because it's problematic from a legislative point of view.

Mr. Skelton, I think I got this answer right. I just wanted to ask you if Health Canada consulted with the Canadian Health Food Association or its members on the proposed changes to the Food and Drugs Act in division 31.

[Aaron Skelton]

No, it did not.

[Don Davies, NDP, Vancouver Kingsway, BC]

Yesterday at this committee, the associate assistant deputy minister of Health Canada's health products and food branch said that the supplementary rules authority proposed in division 31 is “really for situations in which there's intentional misuse or diversion of a product for use completely outside of health.”

I have two quick questions on that. First, does Health Canada not have the power to deal with that situation now? Second, is that how you interpret this section of the legislation?

[Aaron Skelton]

Thank you for the question.

I will defer to Ms. Gomez.

[Laura Gomez]

Thank you.

To answer the first part of the question, currently Health Canada does have powers under the licensing for natural health products to include information about the safe use of products. That includes statements such as “for external use only” for a product that is not intended to be ingested or statements for products that should be kept away from children.

On the second part of the question, the interpretation of this section is concerning because of some of the exemptions that have been included in the drafting. While the statements from Health Canada express their intent, that intent isn't written in the legislation itself. The legislation itself is much more broad. It talks generally to unintended use, and then it also allows for an exemption if Health Canada has uncertainty respecting the risk to health and safety about that unintended use. In that case, they can nonetheless still make an order. That takes away a lot of the scientific scrutiny and rigour that would normally be applied to the use of such powers.

[Don Davies, NDP, Vancouver Kingsway, BC]

Looking at the actual sections of this division, I want to zero in on the test. It says:

Subject to any regulations made under paragraph 30(1)(j.1) and if the Minister believes that the use of a therapeutic product, other than the intended use, may present a risk of injury to health, the Minister may....

Then, of course, it establishes rules on the conditions.

I'm wondering how you feel about the subjective belief test. Do you think that's an appropriate measure to apply to potentially removing products from consumers, or should there be some objective standard imported into that section?

[Laura Gomez]

Any time there's a subjective provision in legislation, that is problematic, because it is interpreted to be the intent of the legislation to permit someone to make a subjective determination.

In this case, it's particularly concerning because of the exemption for uncertainty. That means that if there is uncertainty as to whether or not there even is a health risk, someone could still make a decision that would have very sweeping powers, such as, in fact, a decision to control or remove a product from the market when that product has already gone through the proper regulatory approval process that is already provided for in the regulations.

[Don Davies, NDP, Vancouver Kingsway, BC]

Would you support an amendment to the proposed section?

I understand your position is to delete the section. If it were to be there, what if the section were amended to provide a condition of reasonable grounds— for instance, “if the minister believes on reasonable grounds that the therapeutic product”...?

Would that give you more comfort?

[Laura Gomez]

In that provision, it would, yes.

I also think that the subsection on uncertainty, again, is very problematic, because even if that provision says that there must be reasonable grounds, those reasonable grounds can be based on uncertainty. That uncertainty can mean there is no actual risk to health and safety.

[Don Davies, NDP, Vancouver Kingsway, BC]

I was speaking this week with traditional Chinese medicine practitioners, who make extensive use of herbal-based compounds. They are also most concerned that these sections are so broadly defined that they could be used to restrict their prescribed treatments.

Have you had any conversations with or input from the traditional Chinese medicine community?

[Aaron Skelton]

Yes, we have spoken extensively with that community. I think you're representing, similar to our conversations, their deep concern. I think providers of any class of products that are based on such a traditional modality in application and base of use would see these as particularly troubling.

[Don Davies, NDP, Vancouver Kingsway, BC]

In listening to media and listening to Health Canada yesterday, it appears that Health Canada really wants to get at two things. One is that they want to get at the use of nicotine pouches and the misuse by the tobacco industry. Instead of using them for smoking cessation, they are sort of marketing them or allowing them to be sold to children or young people for recreational use. The second thing is when we had the shortage of infant formula and, I think, of children's pain medication as well.

Would you support targeted amendments to legislation—of course it shouldn't be in a budget bill—that actually speak to those specific situations, as opposed to a broad power that appears to be able to be used against any product in any circumstance under subjective belief and without even requiring certainty?

[Aaron Skelton]

Yes, I think we would support precision regulation that is directed specifically at the issues.

Again, our concern here is the broad, sweeping powers that are particularly apt to be used in a way that is not appropriate. There are methods and ways to adapt the current regulations to target those issues that you highlighted, and we would be supportive of that.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Chair, how am I doing?

[The Chair, Liberal, Peter Fonseca]

That's the time, actually. We've gone over.

We are into our second round. Because we don't have enough time for a full second round, we'll have about three to four minutes for each party to ask questions.

We're starting with MP Morantz for three to four minutes.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you, Mr. Chair.

Mr. Skelton, I want to bring this back to what the direct effect might be on consumers, because we haven't talked about that.

Let's presume that this regulation comes into effect exactly as it is, which is something that you don't want to see. Somebody goes into a store after that to pick up their regular monthly bottle of vitamin C. Maybe they pay something like $10 for it now. What will all the licensing fees that have to be paid on an annual basis do to the cost of that product?

[Aaron Skelton]

Not particular to Bill C-69, but in a similar vein to an unchecked ministerial power, that's what we're seeing on cost recovery. I'd comment that through our analysis, we've seen that the impact of several of these regulatory and legislative updates is that at a minimum, one in five of these Canadian brands is looking to exit the country. It's going to reduce the number of Canadian-produced and Canadian-regulated products that are available.

The companies that do remain are going to be reducing the assortment of products, because they just won't be financially viable anymore. The selection of products will be reduced for Canadians. The products that remain will have an increased cost burden that will be extremely different from products in other countries. We'll see an increase in cost of those that remain. Therefore, there will be less Canadian compliance, less assortment and increased costs for those that do remain.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Someone could walk into the store—let's say it's cold and flu season, and echinacea works for them—and find out that echinacea is no longer available, for example.

[Aaron Skelton]

They may find some of those products unavailable. Those that remain could be impacted by upwards of 20% to 40% on the shelf.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

What's the reason for this legislation? How much in fees and revenues does the government expect to collect, assuming that this legislation comes into place?

[Aaron Skelton]

The cost-recovery proposal is estimated at about $51 million, which is a complete recovery of the existing budget. That's what the cost-recovery plan has been based on.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

This year the entire federal budget has just reached $500 billion for the first time. I haven't done the math yet, but $50 million is like a rounding error for the government, and the inconvenience it causes to consumers would be huge. Am I correct in that assessment?

[Aaron Skelton]

Yes, I think that's a fair assessment. The budget that Canada uses to regulate natural health products is the largest budget anywhere in the developed world to manage natural health products. We already have the largest bureaucracy overseeing the regulation of natural health products.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

The result of this will be $50 million to the federal government, less product availability for consumers and higher cost to consumers for the products that remain.

[Aaron Skelton]

I think that's a fair conclusion.