International Trade Committee on Oct. 31st, 2023

[David Lee]

It's more of a regulatory rigour than a hurdle. We are required to make sure there is comity: Are their regulatory requirements and tests the same? We need to really make sure that we can trust that. It is a longer process. We get to know their scientific review teams.

It's worth saying, though, that the way we've made the proposal is that as soon as we are okay with the company, we can add it by an incorporation by reference. We don't have to make a regulatory change; we can just put it right on the list when we're ready.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Would this be part of trade agreements, then, with the U.K. free trade agreement hopefully in its final steps, and the CPTPP and the extension with that?

[Callie Stewart]

Not directly. When we negotiate trade agreements, we often have regulatory co-operation chapters that encourage regulators to work together. We look to encourage mutual recognition and this kind of streamlining because it helps to get Canadian products into other markets and needed products into the Canadian market.

However, because consumer safety is paramount, it is up to the regulators to tell us trade negotiators whether or not this is any good. We encourage co-operation, but we leave it to the regulators to ultimately make the decision on whether or not they will harmonize or recognize the standards.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Ms. Fortier, you have five minutes.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you, Madam Chair.

Good morning, everyone.

Thanks to the witnesses for being with us.

Ms. Lourenco, in my role as President of the Treasury Board for nearly two years now, I've had the privilege of learning about the regulatory processes involved. So I know that you and your colleagues work very hard. My questions will focus more on the process, not how you engage in it.

As I understand it, representatives of Canadian businesses participated in the consultations conducted before the proposed biocides regulations were published in Part 1 of the Canada Gazette.

Would you please tell us a little bit about the challenges and risks associated with the biocides market that industry representatives told you about during those consultations.

I'm trying to understand the pressures experienced by Canadian businesses, SMEs in particular, wishing to operate in this sector. What pressures do they experience?

[Dr. Celia Lourenco]

During consultations, we heard a significant amount of feedback from different sectors and stakeholders.

Definitely the areas of support were on the idea of combining the regulations under one framework, as we've already discussed, as well as providing support for that transition period that I talked about earlier.

Some areas of concern include wanting to bring in other products under this framework, perhaps sanitizers for air, water and other uses, other than hard- and soft-surface sanitizers. Some companies suggested that we should look at bringing in other products under the framework. Others wanted to see additional countries of reference listed, other than the United States. They wanted others to be considered, which we will do. Some of them raised the concern, as we've already discussed, of the use of a foreign decisions pathway.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Did they tell you which countries, in addition to the United States, should be on the countries of reference list, or was it more open to any country?

[Dr. Celia Lourenco]

Yes, there's an interest in European countries as a next step.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

So that confirms the information. I don't have much time left, but I'd like to talk to you about foreign markets.

Are these new regulations a good opportunity for Canadian businesses to access new markets and prosper?

Do you see any trends taking shape in that regard?

[Callie Stewart]

We didn't take that into consideration in connection with these regulations.

I'll continue in English, if I may, because I'll be more comfortable speaking.

When we're talking about basing our regulations on international standards and encouraging our trading partners to base their regulations on international standards, we always think about whether, as they regulate, it will be better for our exporters as well as for Canadians receiving the imports.

In this particular case, I cannot say we did a study thinking about whether or not there would be greater access or growth opportunities for biocides. However, in general, this is very much in keeping with what we believe to be useful for increasing trade.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

I don't know whether anybody knows this: Do we know how many jobs we're talking about in the biocides industry in Canada?

You said $200 million in scope, but is there an increase? Was the pandemic a driver of many opportunities for small businesses to decide to try that and innovate during COVID? Do you have that type of information on the market we're talking about?

[Dr. Celia Lourenco]

The estimates are that the current market employs about 10,000 in this space in Canada. We don't have the numbers, though, about how the market grew during COVID. We don't have those numbers, unless other colleagues do.

[The Chair, Liberal, Judy Sgro]

Thank you very much. Time has lapsed.

I want to thank the witnesses for their valuable information today.

We will suspend briefly to bring in our upcoming witnesses.

Thank you.

[The Chair, Liberal, Judy Sgro]

I bring the meeting back to order.

Welcome back.

For the second hour of today's meeting, we have by video conference, from Association pour le développement et l'innovation en chimie au Québec, Mr. André Côté, member of the board of directors. We also have Stéphane Lévesque, general manager at GPIM. From the Canadian Consumer Specialty Products Association, we have Ms. Shannon Coombs, president.

I welcome you all to this important study today.

I will ask you to make opening remarks.

I will turn it over to Mr. Côté and Mr. Lévesque for opening remarks of up to five minutes.

[André Côté, Member, Board of Directors, Association pour le développement et l'innovation en chimie au Québec]

Thank you, Madam Chair.

Good afternoon. My name is André Côté. I'm here as an expert and member of the board of the Association pour le développement et l'innovation en chimie au Québec, or ADICQ. I work in the field of product approval by Canadian authorities—

[The Chair, Liberal, Judy Sgro]

Monsieur Côté, can you hold on for one minute, please? We have a translation issue.

There's an issue with the sound. I'm going to go to Ms. Coombs first. Then we will go back to you, and hopefully we will have been able to correct the challenges with the sound.

Ms. Coombs, would you like to start off, please?

[Shannon Coombs, President, Canadian Consumer Specialty Products Association]

Good day, Madam Chair and members of the committee. It is a pleasure to be here to provide our input on the committee's study of the biocides regulations.

My name is Shannon Coombs. I am the president of the CCSPA. For 25 years, I have proudly represented the many accomplishments of this proactive and responsible industry.

The last three years have been very challenging but rewarding for both industry and government, as we collectively worked together to address product shortages and supply chain barriers as a result of the pandemic.

In addition to supporting increased supply of disinfectants, CCSPA is a founding member of the Canadian hand sanitizer exchange, which supported companies in sourcing materials, ingredients and packaging to manufacture hand sanitizers during the pandemic. Along with our submission, I have provided the clerk with our one-pager, “Imagine Life without Us?”, which illustrates the types of products CCSPA represents.

Who is CCSPA? We are a national trade association. We represent 40 member companies: collectively, a $20-billion industry. We employ 12,000 people in over 82 facilities across the country. Our members are Canadian companies, including SMEs, Quebec manufacturers and global companies with Canadian facilities.

In my five minutes, I will outline why the regulation is important to Canada.

What are biocides and how are they regulated? Biocides include disinfectants, sanitizers and food-contact sanitizer products. They are used in our homes, hospitals, schools, workplaces, food establishments and long-term care facilities. They prevent disease in humans and animals.

Currently, the disinfectants and sanitizers are regulated under two federal acts: the Food and Drugs Act and the Pest Control Products Act. While disinfectants and sanitizers are similar, their regulation under the separate frameworks creates duplication of review and two separate sets of user fees.

Why are the regulations important?

To address these ongoing challenges over the past 20 years, and specifically as an outcome of the pandemic, CCSPA has advocated a single risk-based framework for disinfectants under the Food and Drugs Act.

The biocides regulations directly respond to this need by establishing a single framework for the review of these products at Health Canada. The framework includes tailored biocide regulatory requirements, a modern licensing model and new registration pathways, including an authorization pathway that recognizes decisions from comparable foreign jurisdictions.

The timing of these regulations could not be more crucial as we work to directly respond to the lasting economic challenges and Canadians' increased focus on infection prevention and control in a post COVID-19 environment.

While I could speak about the importance of all the components of the regulation, I did want to speak directly to the committee's study on the potential impacts of the use of a foreign decision pathway on Canadian manufacturing.

What is the use of foreign decision and what does it do? It is an additional Health Canada review stream that will allow a company to leverage a trusted foreign regulatory authority's decision to approve a product when applying for marketing a new product in Canada. The pathway will have a condensed review, and registration fees will be commensurate with the review time.

To be clear, manufacturers and importers have many other registration pathways available to authorize their innovative biocide products, some of which have similar timelines and fees. As such, the use of foreign decision, or UFD, does not compromise the ability of Canadian manufacturers to compete in the Canadian marketplace.

How does the UFD pathway enhance and benefit the framework? It facilitates an increased supply of disinfectants and sanitizers to Canadians. It supports international trade and advances regulatory co-operation. It supports a competitive business environment, reduces red tape and aligns with our emergency preparedness objectives by codifying those temporary measures discussed earlier by Health Canada that were put in place during the pandemic. I think this regulation is a prime example of applying lessons learned during COVID to support regulatory agility in the face of a future global crisis.

How do the framework and UFD benefit Canadian SMEs? The answer is twofold. The UFD pathway offers an important option for Canadian businesses to register more novel and specialized technologies by enabling companies to sublicense. This facilitates Canadian-owned and Canadian-operated businesses to bring to market products that would otherwise be cost-prohibitive.

Canadian businesses are also supported by complementary policy measures, including the use of efficacy data generated by the National Research Council at no cost to these companies and the use of a monograph, which is another registration pathway in this regulation with reduced review times and fee mitigation for smaller businesses.

In closing, I would like to say that the biocide regulations support good public policy. There will be increased product availability. There will be innovation and a promotion of the competitive marketplace. It advances our collective objectives of regulatory modernization and agility and complements the government's objectives around drug shortages, supply chain disruption and lessons learned from COVID.

We support this regulation and we thank you for your interest in this important topic today. We believe the study and its recommendations will support and further strengthen this proposed regulation.

Given the importance of these regulations to our industry, we believe they should proceed to Canada Gazette part II without delay, accompanied, of course, by the appropriate resources at Health Canada for implementation.

I look forward to any questions the members may have.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Coombs.

It's on to Mr. Lévesque, please.

[Stéphane Lévesque, General manager, Groupement provincial de l'industrie du médicament (GPIM), Association pour le développement et l'innovation en chimie au Québec]

Good afternoon.

My name is Stéphane Lévesque, and I am the general manager of the Groupement provincial de l'industrie du médicament, which represents the SMEs working in Quebec in the production and commercialization of drugs and natural health products, including disinfectants and biocides.

I have scientific training and 29 years' experience in the pharmaceutical field. I am very familiar with the role of disinfectants, particularly in combating the C. difficile bacterium, which is a cause of infections in hospital facilities.

Health Canada's proposed regulations will not solve the problems detected and will even result in excess work for government officials in the coming years.

There are valid reasons to question the actual intent of this regulatory framework. Products approved in the United States will not be regulated as strictly as those manufactured in Canada, which will thus result in a double standard that will work to the detriment of Canadian SMEs. This framework will not improve the productivity of Health Canada's review team but rather will result in additional delays in the approval process for our manufacturers.

Health Canada's natural and non-prescription health products directorate has tried for years to meet its own approval standards for disinfectants. Only a portion of Canadian marketing licence applications would be approved on the first round, compared to those submitted for American disinfectants, which would be approved immediately.

There must be no increase in the size of the bureaucracy. Lastly, our opposition to these proposed regulations concludes with a call for a moratorium for the purpose of determining their impact on the Canadian industry.

If the proposed regulatory framework were adopted in its present form, Health Canada would favour American businesses over Canadian businesses, most of which are SMEs.

[The Chair, Liberal, Judy Sgro]

Mr. Lévesque, could you just hold on for one second?

Mr. Côté, could you restart your computer?

He's restarting his computer. We're trying to figure out some sound problems for Mr. Côté.

Please continue, Mr. Lévesque, and we apologize for the interruption.

[Stéphane Lévesque]

In recent years, Health Canada's natural and non-prescription health products directorate has asked representatives of the chemical industry to take part in confidential discussions on a regulatory framework for biocides.

ADICQ is a non-profit organization, an NPO, that pursues the following objectives: to promote, develop and encourage the chemical industry in Quebec by paying particular attention to SMEs; to bring together businesses in the industrial chemical sector, manufacturers and formulators, in particular, in order to represent their common interests, promote foreign market development, trade and strategic and technological alliances; and, lastly, to ensure regulatory oversight and to inform members on all issues pertaining to their industrial activities.

Despite ADICQ's representations, Health Canada turns a deaf ear to our requests for political reasons and continues to threaten the Canadian chemical industry, especially its SMEs, and particularly in Quebec. In our view, the recognition of foreign approvals of disinfectants and biocides will harm Canadian manufacturers. Health Canada's proposed biocides regulations provide for the exclusive recognition of American approvals in Canada, which would amount to the equivalent of a form of American protectionism imposed on Canadian businesses by the Canadian government. The proposed regulations also provide for reduced fees and shorter approval timelines for foreign products, which would benefit American multinationals, and that could in turn preempt Canadian manufacturers.

Furthermore, by streamlining review during the approval process, Health Canada cannot ensure the public's protection or guarantee product quality. The proposed regulations provide for less content to be supplied in applications for American products. As a result, Canadian products would have to meet a greater burden in order to be approved as the proposed regulations do not set forth the same criteria as for American products. Health Canada has to date refused to define how public safety from foreign products will be assured.

The creation of a new category of regulated products will clog the file review process, particularly for food-contact surface sanitizers. In 2004, Health Canada began implementing the Natural Health Products Regulations, a process that took seven years. Implementation of the Safe Food for Canadians Regulations is still unfinished in 2023, five years after the process was announced in 2018. Experience therefore shows that the proposed regulations will generate red tape that will take up at least two years and involve costs estimated at some $20,000 per product for Canadian manufacturers.

In the meantime, foreign products could be recognized and approved without review, more quickly and at lower cost. Health Canada claims that the proposed regulations are part of an equity- and transparency-based process, but, contrary to Health Canada's allegations, there is no consensus in the Canadian industry.

Since 2018, ADICQ has attended all meetings and expressed its opposition to the proposed regulations on behalf of Quebec businesses. We have even sought a moratorium. The Canadian government must remind Health Canada that we can't rob Peter to pay Paul. SMEs in the Canadian industry, and the Quebec industry in particular, would be subject to a frontal attack that would benefit the American industry. There can be no double standards in an international free trade context.

ADICQ in no way disagrees with free trade policies, particularly with the United States. The same is true of the Canadian Federation of Independent Business, an associative partner of ADICQ. We remain receptive to any regulatory framework designed to protect the health of Canadians and the economic health of Canadian businesses.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you for filling in for Mr. Côté, Mr. Lévesque. It's much appreciated.

We go now to Mr. Martel for six minutes, please.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you, Madam Chair.

Thanks to the witnesses for being with us.

Mr. Lévesque, I believe you weren't that keen on the idea of this regulatory change. What aspect of these new regulations do you consider most harmful? What do you fear most for your businesses?

[Stéphane Lévesque]

We actually aren't opposed to improving the system. There has to be a new framework, but two major aspects need to be taken into consideration.

First, you need to review the decision to approve American products on a priority basis and the current recognition of approvals in other countries, including the United States.

Second, you need to consider the fact that Health Canada will be swimming in applications. The number of new applications for disinfectants and food-contact surface sanitizers has been estimated at more than 800. Consequently, Health Canada's system won't be able to meet the demand. As a result, approvals of Canadian products will be increasingly delayed because American products will be immediately recognized. It's as simple as that.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

From what I understand, there's a lot of red tape in Canada. So the approval process, which can be long and costly, may discourage some SMEs. That's why it's important to streamline it.

What do you think of these regulations? Will they create more barriers than the present system?