KAWARTHA LAKES-After four generations of manufacturing natural health products, Joel Thuna says this could be the last if the federal government follows through with new regulations.
“We will not survive, if this goes through you will see literally 90% of the industry wiped out,” said Thuna who is the General Manager/Owner of Global Botanical in Barrie. The company in its current form was founded in 1978 but was founded in New York in 1988 when Dr. Max Thuna opened his first herbal retail outlet. A Master Herbalist, Dr. Thuna emigrated from Austria and over time opened over 25 herbal stores across Canada. “This is the death blow,” said Joel Thuna.
The Federal Government recently announced new regulations for Natural Health Products  (NHPs) which include new labelling laws and significant fees to import and manufacture NHPs in Canada. And those costs will have to be passed on to the consumer meaning NHPs could go up by 50 to 75%.
Thuna says the new labelling laws alone will cost his small business over $200,000. The law would require a new label for every single product sold in Canada. According to Thuna the labels would have no new information but would require a formatting change for things such as font style, colour and size and a change to the layout of the information on the label.
“For example, my Oregano capsule is in a regular-sized capsule bottle with 60 capsules in it. It fills about 2/3 of the bottle. Our estimate is that that bottle will now have to be two and a half times the size just to fit the information and the formatting the way Health Canada wants it to be done,” said Thuna. “What it actually ends up doing is increasing the costs dramatically for packaging and for freight, it’s really bad for the environment and our industry was at the forefront for being environmental and on top of that when they put through this concept they didn’t think about the cost structure of redesigning labels.”
Thuna explains that to redesign a label he has to pay a designer to do it and to follow the regulations. Not only does the label have to comply with Canadian law the labels have to comply with organic and kosher labelling laws and it also has to be sent to those agencies for approval, which he also has to pay for.
“It is a complete and utter waste for no consumer benefit. This is one of those scenarios where you have a solution created to find a problem.”
The Canadian Health Food Association (CHFA) says the new regulations are an “existential threat to the entire industry.”
“It’s several issues that are all being rolled out at once and any one on its own would be challenging for the industry to incorporate but what we are seeing is a total lack of engagement and consultation with Health Canada and stakeholders. We are seeing an agenda being rolled out that in multiple areas will have an impact on the ability for Canadians to purchase safe and effective NHPs. said CHFA president and CEO Aaron Skelton.
Skelton says it will limit local choices for Canadians while allowing them to buy products online that are less regulated and potentially not safe.
“So the net impact of this is it leaves Canadian companies that won’t be able to sustain their business model it will reduce the number of products available in store and in the market, it will increase the costs of those that are remaining and will push people to an unregulated and unmonitored online market. To me, that is a big threat to an industry that plays a significant role in helping Canadians manage their health.”
Jennifer Briggs, Manager at Joanne’s Place Health Foods with locations in Peterborough and Lindsay says it will have a negative impact on businesses like Joanne’s.
“The concern is that consumers would lose the ability to choose in Canada and companies would pull out of Canada. Large companies have been buying up smaller companies and then they could be monopolizing everything. They may be able to financially afford to pay the labelling costs and things like that but then you will lose the ability to choose to support small independent companies in Canada because they can’t financially afford it.”
The second part of the new regulations announced involves a “cost recovery” program where an industry that benefits from regulations helps pay the costs. Thuna says he has no problem with cost recovery but the amount the government is looking for is not feasible and there was no consultation with the industry.
“This would cost my company $300,000 per year,” said Thuna. “It’s a money grab, that’s all it is.”
Thuna says the government commissioned a report looking at the compliance of the industry but the report viewed the industry as a whole rather than looking at the few companies who don’t comply with current regulations.
“You have companies out there like ours, small companies who comply, we bought into the regulations and we comply. Health Canada may have a beef with a word on one of our labels but that’s pretty much all you are going to get. The report didn’t separate companies out for compliant versus non-compliant. I have no problem with Health Canada having a heavy hand with companies that break the rules. We embraced the regulations because we want consumer confidence.”
Skelton says the 2022 Auditor General Report is used as a rationale for the move.
“In general terms, they tend to reference an auditor general report back in 2022 that did highlight some compliance issues in the market around marketing materials and claims and use that as a rationale. What is not discussed though is there was no delineation between regulated and non-regulated products. It captured a lot of compliance issues in the unregulated industry that we agree needs to be addressed but all the steps taken don’t address the unregulated market.”
Thuna says the government needs to focus on ensuring companies comply with the regulations already in place.
“I want Health Canada to do things properly and actually do their job which they haven’t done and go after non-compliant companies.” explains Thuna.” Everyone knows who they are and where they are but Health Canada has done nothing for 20 years and it’s not due to lack of funding. It’s due to not doing their job. And now they are trying to penalize us for not doing their job.”
The industry is already highly regulated according to Briggs.
“They say things like oh they’re not regulated but that’s not accurate, we are actually heavily regulated. Every product on the shelf has an NP number and it takes up to 200 days for them to get approved. The labelling laws are already so strict, cautious and regulated.”
“We have a world-class leading regulatory framework for natural health products that’s been in place since 2004 that has been seen internationally as a gold standard,” adds Skelton. Â “Countries like New Zealand are voting this week to have a structure like ours because it is market-leading. What we don’t have is market-leading implementation of what we’ve got. We continue to sit at the table and have discussions with them to try to implore them to see the faults in their proposal, but we have seen very little willingness to incorporate any of that feedback.”
The changes will come into force over the next two years.
“One in five brands say they are seriously considering leaving the Canadian market due to increased regulatory complexity and financial burden,” says Skelton. “With Health Canada’s recent announcement of a cost recovery program, we can expect this number to grow significantly.”
The consultation for these programs closes today according to the government but the industry will continue to lobby for changes.
Thuna says the only way changes will be made is if Canadians speak out.
“Contact your MPs and explain specifically you want to have access to products we have today and prices you can afford.
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