Thank you.
Good afternoon, Chair and committee members. Thank you for having me for this important conversation.
My name is Jules Gorham. I am the director of regulatory affairs and policy at the Canadian Health Food Association.
The CHFA is Canada's largest trade association dedicated to natural, organic and wellness products. The natural health product, or NHP, industry is a vital component of Canada's economy. NHP businesses contribute $5.5 billion to the Canadian economy and $2.8 billion in taxable revenue.
I am here today as one voice among the many who are deeply concerned about Health Canada's proposed changes to the NHP industry. In particular, I'd like to talk about the impact of these changes on women living in Canada.
Right now, 82% of Canadians use NHPs. If you have brushed your teeth, worn sunscreen, applied deodorant or taken a vitamin, then you too use NHPs. According to Stats Canada, women are much more likely to purchase NHPs to manage their health and wellness.
It is critical to understand that every time a consumer chooses a natural product, they are already paying more. NHPs are not covered by health insurance programs and are subject to provincial and federal taxes. These tax dollars are estimated to amount to over $500 million a year.
Health Canada's proposed changes will increase the cost of NHPs in Canada even further, unnecessarily burdening Canadians and disproportionately impacting women and women-owned businesses during a cost-of-living crisis. These changes will force businesses across the country to close. One in five are contemplating shutting down, with many micro, small and medium-sized businesses already leaving Canada.
The barrier to entry is high too, with a backlogged licensing system and heavy pre-market processes. Profits are much less than what one would expect, as there is no patent protection for NHPs, minimizing research funding and making it difficult to attract investors, something that 51% of women entrepreneurs are already challenged by. To bring an innovative product to market is already a costly undertaking. Health Canada's proposal adds another $58,000 price tag to the cost of every single novel product application.
Over 80% of businesses in this sector are micro, small or medium-sized; 51% are Canadian owned and 28% are family owned. Although the exact number of women-founded or women-led NHP companies is unknown, a recent Women in Nutraceuticals report indicates that 50% of small businesses in the sector do have a female CEO. As well, 17% of companies attending CHFA's upcoming trade show are owned by women.
Unfortunately, it's a well-known fact that women have been historically neglected in research. There is a scarcity of data on women. Health Canada's latest regulatory reform on NHPs is yet another example. Prior to publishing its proposal on cost recovery fees, Health Canada did not conduct any analysis on the impacts to Canadians, including a gender-based analysis. They left it to business owners to do the math and decide if they can afford to stay in business.
We are deeply concerned about the impact of Health Canada's changes on the health of Canadians, particularly for the many women who rely on NHPs to maintain their health and wellness. While women-owned NHP businesses are responding to women's health needs, these micro and small-sized businesses can't afford to absorb the cost of the changes. Even the largest companies will be forced to reduce product selection by an estimated 20%, leaving far fewer options and almost nothing new on Canadian shelves.
What has been falsely promoted by Health Canada as regulations to keep Canadians safe will actually send more and more Canadians to the Internet, where unapproved and unsafe products can be shipped right to their doorstep.
As someone who speaks to members of the NHP industry every day, it is abundantly clear to me that recklessly pushing through regulations will decimate the NHP industry, innovation, research and our much-needed Canadian brands. It is my pleasure to try to peel back the numerous complex issues these regulatory changes will magnify and create for women across our country. The impacts to women need to be recognized by the Minister of Health before it's too late.
I am but one voice, but I thank you for this opportunity to represent the women leading NHP businesses and the women and moms, like me, who choose natural to care for themselves and their families.
Thank you.