Finance Committee on June 3rd, 2024

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

Thank you, Chair.

Mr. Buckley, I'm assuming you're listening to the testimony here today.

Mr. Arango, in his previous answer to a question, indicated that the government already has a regulatory process started and a gazetting process going, whereby these pouches or nicotine.... I don't think anybody here is arguing that we should be getting these things out of the hands of kids. Nobody here is making that argument. We're simply trying to draw a line between what the minister has said in defence of Bill C-69 and the Food and Drugs Act, and whether or not the government actually needs the power to do so.

Mr Buckley, you strongly argue that the government already has the ability to do so. My colleague Mr Davies just mentioned the Tobacco and Vaping Products Act.

If that's the case, what would prevent the minister...? Does the minister have the power right now?

Let's say one of these nicotine pouches had a natural product number. Could the minister pull that natural product number from that product? It's just a simple yes or no.

[Shawn Buckley]

It's not that simple.

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

I have a little bit of time and I want to make my point.

The point is that if Health Canada has made an error in judgment in labelling a nicotine pouch as a natural health product instead of labelling it as a product under the tobacco and vaping products legislation and regulations, that would be something for which you wouldn't need the powers here.

Every power I see in Bill C-69 for the Food and Drugs Act deals with “other than the intended use”. It's in the supplementary rules for a therapeutic product. In the promotion, it's “other than the intended use”; under uncertainty, it's “other than the intended use”.

This is all about off-label use. It has nothing to do with the existing powers that the government has in order to properly regulate these products, categorize them and sell them appropriately in the Canadian marketplace.

Am I missing something?

[Shawn Buckley]

You know, the minister could put in the Gazette, part 1, today that he's making a regulation that all nicotine products are adulterated if they have flavouring. He could give it a 30-day comment period and publish it again in the Gazette, part 2, and now you're finished.

The minister could make an order under section 27.3 that nicotine products basically can't be promoted for any use that isn't approved and go after companies. He could apply for an injunction or he could charge them. Section 9 already prohibits the promotion for off-label use. The powers are there. That's what's frustrating. Just use the powers that are there.

Tell me, what power in here really.... That's except for not promoting off-label use, which is directed towards doctors.

[The Chair, Liberal, Peter Fonseca]

Thank you for that.

Now we're moving to MP Thompson for the next two and a half minutes, please.

[Joanne Thompson, Liberal, St. John's East, NL]

Mr. Arango, this is for you.

I have a very short period of time, so I'll be quite brief in what I have to say.

You referenced pharmacare, the school nutrition program and, obviously, taxes on smoking and vaping as incredibly important as strong measures in preventative health care. Clearly cost outcomes for government are significant if we can't mitigate chronic disease processes.

Can I have your comments on that?

[Manuel Arango]

Absolutely. There are mountains of evidence to indicate that if we can prevent disease—whether it's cancer, diabetes, heart disease or stroke—we will save tenfold in health care costs.

We want to prevent people from showing up to the emergency room and going through complicated and expensive surgical or diagnostic procedures. Things like taxes on these types of products work. Providing drugs in advance and allowing people who have problems to affordably access drugs keeps people out of the emergency room as well.

The reality is that when it comes to diet, nutrition, and smoking and vaping, etc., prevention is way more cost-effective. Some of these measures in the budget will do that. They're very critical to getting ahead of the curve.

Our health system is already very stretched. We need to keep people out of doctors' offices, out of the emergency room and out of surgery rooms. Preventative measures are really critical.

[The Chair, Liberal, Peter Fonseca]

You have 45 seconds.

[Joanne Thompson, Liberal, St. John's East, NL]

Very quickly, Canada is no longer the only G7 country without a school nutrition program. What can we learn from our G7 peers in terms of implementation and results?

[Manuel Arango]

In the earlier panel, I think Carolyn Webb indicated that we don't want to stigmatize folks—people, kids in schools.

Obviously, we wouldn't want to have a school nutrition program in a school that says, “The 10 eligible people are these 10 kids whose families are living with low income.” We can't do that. That's stigmatizing. However, it could be done by postal code. In certain communities that are more challenged with food insecurity, we would say that all of the schools in those areas should have access to the school nutrition program.

That's one important learning. Ideally, we would have a universal program, but that's not quite affordable right now, at this point, and so starting with the selective approach is probably the best way to go.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP Thompson.

Now we go to MP Ste-Marie for two and a half minutes.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

Ms. DeLaronde, I understood that the government took action and significant measures, but your organization has suggestions for further action and continuing those measures.

Can you please repeat and explain them for us in two minutes?

[Sandra DeLaronde]

With respect to the red dress alert, this budget allows for further consultation for the development of a pilot project.

Manitoba and Canada have agreed to do the work to establish a pilot project, but we want to be able to implement the pilot project now and work out the mechanics of that as we go along. Every day is a day too long to implement this important initiative.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

That's very clear. I understand that there's an urgent need for action now.

Thank you very much for being here, for your testimony and for the work you're doing.

That completes my questions, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

This will be our final questioner.

MP Davies, you will have the last two and a half minutes with our panel of witnesses.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

Mr. Buckley, I'm sorry; I wish I had more time, but I want to direct a question to you.

We've already touched on the breadth of the powers that this legislation contemplates, as well as the inappropriateness of placing it in an omnibus budget bill. However, I want to get your views on the actual test proposed in the legislation.

The test on all three areas of additional powers to the minister are if the minister believes that the use of a therapeutic product, etc. A specific and quite unusual section says that despite any uncertainty, the minister may make the order.

I'm wondering if I can get your comment on whether or not that's a sufficient guardrail around the minister's exercise of discretion.

[Shawn Buckley]

Actually, I view this as a blank cheque. In fact, if you read it carefully, it doesn't have to be for good health outcomes. It can be just for broader public policy, so there's really no threshold.

You would think that if you were going to interfere in the doctor-patient relationship.... That is what off-label use is all about. I don't care if you're talking about the promotion or not; with this promotion provision, if the minister says that you can't promote a specific drug, then you can't publish a clinical trial. You would be in violation. A clinical trial that showed efficacy for some other use would be a violation, as a promotion for off-label use. A doctor couldn't publish a case series. A doctor doing a presentation at rounds on how a drug worked for an off-label use, and anyone even mentioning clinical research, be it a double-blind clinical trial or anything else.... We're going into the area of censorship. From a health outcome perspective, in any way interfering with the doctor-patient relationship is extremely dangerous.

I think of the comments earlier, suggesting that we have targeted provisions dealing specifically with nicotine and youth. There's no threshold here, to answer your question. I don't see any threshold on which, as a lawyer, I could go to court. Understand that the courts already say that the regulatory duty has.... They don't have any duty of care to the industry and the industry player. They wouldn't have any duty of care to a doctor or a patient. You basically have no threshold that we could realistically review. I see this as a blank cheque.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP Davies. That is the time.

We want to thank our witnesses for coming before our finance committee on Bill C-69 and for their testimony.

Members, before we suspend to bring in our next panel, you should have received two budgets for Bill C-69. They came in on Friday at 4:38 p.m. I just want to see if we have approval for that.

[Some hon. members]

Agreed.

[The Chair, Liberal, Peter Fonseca]

I see thumbs-up from everybody. Great. Those are approved.

Now we'll suspend and go to our third panel for today.

[The Chair, Liberal, Peter Fonseca]

We are back.

It's rapid fire here at the finance committee today, because we have panel after panel of excellent witnesses.

As witnesses with us today for this third panel, we have the Canada Revenue Agency, with the assistant commissioner of the compliance programs branch, Ms. Cathy Hawara. Welcome.

Joining Ms. Hawara is the director of the international tax operations division, Ms. Martineau. Welcome.

Online, we have the international tax operations division, with Stephanie Martin. We're not sure about her earpiece or how her headset is working, so we're going to see if we can work through that.

We also have with us, from the Convenience Industry Council of Canada, the president and chief executive officer, Anne Kothawala. Welcome.

From Ronald McDonald House Charities Canada, we have with us its chief executive officer, Kate Horton. Welcome.

We're going to start with the CRA and Ms. Hawara, please, for opening remarks.

[Cathy Hawara, Assistant Commissioner, Compliance Programs Branch, Canada Revenue Agency]

Good morning, Mr. Chair.

My name is Cathy Hawara and I am the assistant commissioner of the compliance programs branch at the Canada Revenue Agency. I am joined by Lise Martineau and Stephanie Martin, whom you've already introduced. I want to thank you for inviting us to attend your meeting today.

As you know, the Department of Finance is responsible for developing and evaluating federal tax policy and the legislation through which policy becomes law. As the tax administrator, the Canada Revenue Agency is responsible for the implementation of these laws, including providing information to taxpayers and stakeholders about tax obligations, establishing processes through which individuals and businesses may meet their tax obligations and receive their benefits and, of course, carrying out compliance activities to ensure that taxpayers respect the law, as intended by Parliament.

In that context, the CRA has put in place the structure required to be ready to administer and enforce the global minimum tax act, the GMTA, if and when it is passed by Parliament and receives royal assent. The GMTA will implement in Canada the pillar two/global minimum tax regime developed by the OECD/G20 inclusive framework on base erosion and profit shifting.

Globally, tax administrations have been preparing for the implementation of pillar two. This has included working with the appropriate bodies of the inclusive framework on the administrative aspects related to the implementation of pillar two, with a view to ensuring consistency and practicality in implementation.

The CRA is currently focused on preparing for the domestic implementation of pillar two and the GMTA. Forms are under development and system enhancements are under way to allow for the electronic filing of those forms. There are also exchange-of-information requirements and registration requirements being developed, and, equally important, technical expertise is being developed within the CRA.

The largest Canadian and foreign multinational enterprise groups, along with their individual entities, will be in the scope of the GMTA. As Canadian taxpayers, these groups and entities are already familiar with the CRA's filing systems and electronic systems, as well as our compliance activities. The CRA plans to work closely with the tax community on the implementation of this global regime.

This concludes my opening remarks. My colleagues and I are pleased to answer any questions the committee may have.

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Hawara. I'm sure there'll be many questions.

Now we'll move to the Convenience Industry Council of Canada and Ms. Kothawala, please.

[Anne Kothawala, President and Chief Executive Officer, Convenience Industry Council of Canada]

Thank you, Chair and members of the committee, for hearing from local corner stores as part of your budget bill deliberations.

On behalf of Canada's 22,500 convenience stores, which employ 180,000 people in communities across the country, we would like to speak to provisions in Bill C-69 that would fundamentally alter our businesses and impact adult customers who shop at their local corner store. These same stores and gas stations not long ago were deemed essential services by government during critical pandemic times and were celebrated and recognized for our role in helping keep Canadians safe.

Of immediate concern with the passage of C-69 are changes to the Food and Drugs Act presented in clause 326 in the BIA that would give the Minister of Health unfettered powers to apply precision regulation to therapeutic products. This captures a number of different products, but most relevant to convenience stores are nicotine replacement therapies, NRTs, including nicotine pouches, which are currently sold in our stores to adult customers.

I want to be very clear with committee members. Convenience stores support stronger regulations for NRTs, including nicotine pouches. Not long after the products were approved for sale by Health Canada, we issued guidance to retailers encouraging them to put the products behind the counter and to age-gate the products just as we do for traditional tobacco.

We are also open to other regulations, including marketing restrictions, labour limitations and even increased penalties for retailer non-compliance to ensure these products are used as intended by adults and for cessation or transition purposes.

However, we do not believe that providing sweeping unilateral powers to the minister over a process that is typically apolitical is the appropriate path to better regulate NRTs, and it would set a dangerous precedent for other products that may be sold in our stores or any retailer of a therapeutic product.

Rather than contemplate removing these products from our stores without any evidence to suggest convenience stores are the source of these products for youth, we would like to work with the regulators to ensure these products are used as intended by adults.

Tobacco users want to purchase reduced-risk products from the places where they purchase their cigarettes. Being able to retail these in our stores allows adult consumers an easier option to make that choice.

We have seen recent public policy failures that have arisen when removing nicotine products from our stores under the auspices of curbing youth access. Both B.C. and Ontario made changes to the availability of vape in convenience stores, limiting or removing some or all of these products from our retail establishments; there remains no data to suggest that this has resulted in fewer youth using the product. In fact, online illicit sales of these products continue to grow at an alarming pace.

Further, the removal of these products from our stores and concentrating their sale ultimately favours the illicit market and illegal websites. In fact, there are dozens of illegal, unapproved NRTs for sale online, sold without age checks, without taxes paid and containing unknown ingredients. It is our understanding that these sites are already the primary source of youth access to nicotine pouches, yet there is no plan to address this threat and online harm to young people. We can all agree that the proliferation of products available to youth online, including dangerous products like LSD gummies, should be an urgent focus of government.

To conclude, we are in favour of treating NRTs and their gum and inhaler equivalents just as other tobacco and nicotine products are treated. We agree there should be clear regulations applied to nicotine replacement therapies, including age restrictions, locating the product behind the counter and both marketing and flavour restrictions. However, far-reaching ministerial power that would allow for significant changes in the absence of evidence or input from government officials, experts and stakeholders is not the appropriate tool to regulate NRTs or other therapeutic products.

For that reason, CICC is requesting that the text outlined in clause 326 granting these precision regulation powers be deleted or that the ability to determine where the product is sold, something that is typically a provincial responsibility, be excluded from such regulatory powers.

I would be pleased to share our proposed amendment text in writing with the committee.

Thank you.