New regulatory practices to dietary supplements in Canada endanger U.S. brand suppliers

In Canada dietary supplements are known as Natural Health Products (NHPs). The NHP industry in Canada has gained a strong and reliable reputation worldwide. With nearly 71% of the Canadian population relying NHPs for their wellbeing, it is no wonder U.S. brands have tapped into this significant market to fulfill and capitalize on consumer demand.

The NHP industry alone contributes $11.3 billion CAD ($8.5B USD) to Canada’s total GDP. This success can be attributed to the country’s innovative regulatory practices that have had a positive effect on the industry’s reputation, building consumer trust around safety and efficacy, while also allowing for regulatory practices that continue to bolster and stimulate the market.

Despite these achievements, recent government regulatory initiatives – which lack meaningful consultation with stakeholders – are jeopardizing an industry that provides Canadians with tools to proactively manage their health, while further deterring prospective international sellers from entering the market.

One such initiative involves amending labelling requirements supposedly to improve legibility for consumers. Despite evidence-based concerns raised by industry, no effort has been made to leverage modern digital labeling. These required changes are now compelling permanent and grotesque increases to the size of labels and packaging.

For U.S. brand suppliers looking to enter or stay in the Canadian market, the costs don’t add up.

In a recent survey* on the impact of these labelling changes, 75% of businesses reported a high likelihood of products being removed from the market, while 1 out of 5 brands say they are seriously considering leaving the Canadian market due to increased regulatory complexity and financial burdens. 

Adding salt to the wound, Health Canada has now proposed the addition of cost recovery fees for the industry, which is scheduled to come into effect the same time as labelling changes.  These proposed changes come ahead of the commitment to improve operating efficiencies, instead passing the buck to have the industry pay for the disorganization of the government. With fees in this proposal that do not match the size or scope of the industry, the number of brands and products at risk of leaving Canada has likely grown exponentially while the cost of enter the Canadian market risks being highly unattainable.

The Canadian Health Food Association (CHFA) has been advocating tirelessly against these measures by confronting these regulatory infringements head on. Back to back meetings with politicians were conducted, media outreach campaigns were launched​, ongoing discussions with major trade associations are well underway and over 60,000 letters​ were sent to legislators.

But that still is not enough. If the proposed fees to import, manufacture and sell NHPs along side unsubstantiated labeling regulation are imposed to remain compliant in this market, this vital industry undoubtedly take a hit, hurting domestic GDP, international attractiveness, and consumer choice.

The sad reality is that as Health Canada adds regulatory burdens to Canadian NHP sector, they ultimately hurt the Canadian consumer by reducing choice. Consumer choice is not being protected. Consumers will not have access to products they need through regulated markets. Consumers will face in-demand U.S. products pulled from shelves due to hiking costs. While the industry – and its consumers – will be subjected to unfounded measures without consultation imposed under the guise of ensuring user safety. 

*Source: Economic Contribution of Canada’s Natural Product Sector. May 2023.