FEDERAL REG

SOR/2016-305: Regulations Amending the Food and Drug Regulations (Nutrition Labelling, Other Labelling Provisions and Food Colours)

REGISTRATION OF FEDERAL REGULATION - VIA OIC DATABASE, PRIOR TO PART II OF THE GAZETTE

Registered
December 2, 2016


REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Executive summary Issues: The Government of Canada is revising and strengthening the nutrition and ingredient labelling sections of the Food and Drug Regulations (FDR, or the Regulations) in order to enable consumers to make informed food choices about the food they consume to help maintain or improve their heal... (Click for more)


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Published on December 2, 2016

Bill Summary

SOR/2016-305: Regulations Amending the Food and Drug Regulations (Nutrition Labelling, Other Labelling Provisions and Food Colours)

REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Executive summary Issues: The Government of Canada is revising and strengthening the nutrition and ingredient labelling sections of the Food and Drug Regulations (FDR, or the Regulations) in order to enable consumers to make informed food choices about the food they consume to help maintain or improve their health. The FDR set out requirements for the Nutrition Facts table (NFt), the list of ingredients on the labels of prepackaged products, the specifications for food colours, and the certification of synthetic food colours. However, some of the current nutritional information on labels of prepackaged products does not reflect the latest science, and the way the information is presented does not enable consumers to easily compare products at the point of sale. Moreover, despite scientific evidence of the health benefits associated with a reduced risk of heart disease resulting from the consumption of adequate quantities of fruits and vegetables, the current Regulations do not allow this health claim or any other nutrient content or health claim to be made on the label of fresh fruits and vegetables without triggering the requirement to provide the relevant nutrition information. Additionally, the current labelling Regulations provide food manufacturers with the choice of declaring added food colours by either their common name or simply as “colours,” which means consumers have difficulties avoiding food colours to which they may have sensitivities. Further, the current requirement that every lot (batch) of synthetic food colour be certified by Health Canada provides a level of regulatory oversight that is more stringent than that which is in place for other food additives and more stringent than the requirements in many other countries. Finally, many of the specifications for food colours contained in the FDR are out of date and do not allow for the application of more up-to-date, internationally accepted food-grade specifications that are, in practice, used by the industry. Description: These regulatory amendments will make the information on labels of prepackaged products (i) more useful and easier to read and (ii) based on the latest science, so that Canadians are better able to maintain or improve their health. The amendments also introduce changes that will help Health Canada achieve efficiencies as a regulator by removing the requirement for the certification of every lot of synthetic food colour, and will enable Health Canada to align with other jurisdictions by relying on internationally recognized food-grade specifications for food colours. Finally, the amendments will allow the claim that fruits and vegetables may help reduce the risk of heart disease, which will promote the health benefits of eating fresh fruits and vegetables to Canadian consumers. Cost-benefit statement: Costs were originally estimated based on the inclusion of all regulatory options that were presented during stakeholder consultations. Using a survey approach, respondents indicated that the cost would be approximately $778 million or $554.7 million net present value. This total cost estimate, which is based on a number of cost-reducing initiatives in the Regulations (i.e. the transitional coming-into-force period of 5 years), is understood to be a maximum industry cost burden. The one-time cost to industry based on the $554.7 million estimate represents 0.6% of the total annual revenues of approximately $88 billion that the food manufacturing industry generates in Canada. The quantified present value benefits are estimated to be $1.926 billion over 10 years, assuming a 1% reduction (compounded annually) in direct and indirect health costs in five chronic diseases (i.e. cardiovascular disease, malignant neoplasm, diabetes mellitus, musculoskeletal disease and nutritional deficiency). It is assumed that consumers, when given the necessary information to make healthy food choices, would experience reductions in negative health outcomes. The anticipated net benefit to Canadians is therefore anticipated to be $1.371 billion over 10 years. The transitional period of 5 years was chosen to minimize the cost of implementing the labelling amendments. The industry identified a life cycle for labels of between 6 months and a maximum of 5 years. “One-for-One” Rule and small business lens: The amendments will not add any new administrative burden to industry; the “One-for-One” Rule therefore does not apply. There are approximately 22 000 small- and medium-sized businesses within the food manufacturing and retail sector that will be impacted by the amendments. Given that the cost impact is greater than $1 million, the small business lens applies. Three provisions are anticipated to reduce the cost burden on both small- and medium-sized business: a longer transitional period (5 years) to allow for associated label changes to be managed with internal company resources and to deplete current label stock; maintaining the exemption for products sold at local markets or farms; and the decision to not require bullets between items on the ingredient list. These three provisions are anticipated to avoid approximately $754,935,000 in costs for small businesses. Domestic and international coordination and cooperation: Food labels on prepackaged products in Canada will always differ from those used in the United States (U.S.) because of Canada’s dual language requirements. Despite these differences, the health objective in both countries remains essentially the same, and many elements of the revised Canadian and U.S. labels are aligned, including updated Daily Values based on current science, the new mandatory declaration of potassium, increased prominence of calories, serving size amounts determined on the basis of regulated reference amounts, and the approach to food colour labelling. Background Nutrition labelling In 2003, the Government of Canada made regulatory amendments to the FDR related to the labelling of food, with the goal of providing information to help Canadians make informed food choices and to help improve their health. These Regulations made it mandatory for an NFt to appear on the label of most prepackaged foods. These Regulations detailed what information had to be included in the NFt and prescribed the format of the table. Regulations for nutrient content claims were also expanded and clarified, and new provisions related to diet-related health claims were introduced. The regulatory amendments came into force fully in late 2007. The introduction of a standardized NFt on prepackaged products in Canada was heralded as a highly successful measure. However, since 2003, advances in science, changing Canadian consumption patterns, the increasing incidence and economic burden of chronic diseases, changing consumer expectations, and recent international actions (i.e. updates to the Nutrition Facts label in the U.S.) have necessitated updates to the Canadian Regulations on nutrition labelling. The November 2015 Minister of Health mandate letter requested that public health be promoted by a number of measures including improving food labels to give more information on added sugars and artificial dyes in processed foods. This commitment builds on work already started by Health Canada on improving nutrition labels. In 2014, two rounds of consultations were held with consumers regarding nutrition labelling. This was in response to the 2013 Speech from the Throne, in which the Government of Canada made a commitment to consult with Canadian parents about how the nutrition information on food labels could be improved. Parents in particular and stakeholders, including health organizations, health professionals, consumer advocacy groups, scientific experts and academics, provincial and territorial governments (P/Ts) and industry, were asked to provide feedback by filling out online surveys, attending face-to-face consultation sessions and/or commenting on a series of technical documents posted on the Health Canada website. The first round of consultations led to the publication of a What We Heard report (http://www.hc-sc.gc.ca/fn-an/label-etiquet/modernize-report-moderniser-rapport-eng.php) that helped shape the scope and direction of proposals moving forward. The second round of consultations was intended to solicit comments on more specific proposals that were developed in response to the first round of consultations. The feedback received was then used to refine the proposals and, on June 13, 2015, proposed amendments to the FDR were prepublished in the Canada Gazette, Part I, for public consultation. Efficiency measures With the enactment of the Jobs, Growth and Long-term Prosperity Act, in 2012, the Food and Drugs Act (FDA) was amended to give the Minister of Health (the Minister) the authority to incorporate by reference public documents directly into the FDR. These amendments were intended to enable the Minister to act rapidly on certain science and safety decisions, and to improve efficiency in the food regulatory system, ultimately making it more responsive to emerging health and safety issues. Fruit and vegetable health claim The scientific evidence linking the consumption of sufficient quantities of fruits and vegetables to a decreased incidence of heart disease is well-established. Because heart disease is the second leading cause of death in Canada (approximately 69 000 deaths annually), efforts to further inform Canadians on the benefits of eating more fruits and vegetables could lead to a significant improvement in health outcomes. The FDR prohibits the use of a health claim related to a Schedule A condition (e.g. cancer, diabetes) unless it is specified in the Regulations. Prior to these amendments, the only health claim permitted for fruit and vegetables is the one linked to the reduced risk of cancer. Fresh fruit and vegetables are normally exempt from carrying an NFt given the difficulty in generating accurate nutrient values for these foods. Fresh fruit and vegetables are inherently highly variable in nutrient content due to differences associated with the specific variety, region of origin, growing season and soil conditions. However, up until now, the Regulations have required fresh fruit and vegetables to lose their exemption from displaying an NFt whenever they are the subject of any nutrition or health-related claim. Food colours In general, a food additive must be declared by its common name in the list of ingredients on food labels. Food colours, however, have been unique among food additives in that they could be declared by either their common name (e.g. Citrus Red No. 2) or simply as “colour.” The issue with the term “colour” is that it is a non-specific descriptor and does not provide sufficient information to those with sensitivities to certain food colours. Prior to these regulatory amendments, the FDR required the lot-by-lot certification of synthetic food colours, but not of natural or inorganic colours. Nor was certification required for any other type of food additive. The certification requirements for synthetic food colours were established more than 30 years ago and are no longer considered necessary from a food safety perspective. The requirement for lot-by-lot certification of synthetic food colours has been more burdensome than the requirements for other food additives. Issues These amendments address several issues including the following: The way in which the nutritional information is currently presented with respect to serving size does not allow consumers to easily compare different products at the point of purchase. The values used as the basis of the % Daily Values do not reflect the latest scientific knowledge. In addition, consumers have expressed difficulty in reading the list of ingredients because of the poor legibility of the information on many, if not most, food packages. Despite scientific evidence of the health benefits associated with a reduced risk of heart disease with the consumption of adequate quantities of fruits and vegetables, current Regulations do not allow this health claim to be made. Also, current Regulations do not allow for any nutrient content or health claim to be made on prepackaged fresh fruits and vegetables without triggering additional labelling requirements. Consumers have difficulties avoiding food colours to which they may have sensitivities because current labelling Regulations do not require specific naming of food colours in the ingredient list as there is an option to simply indicate “colour.” The requirement of lot-by-lot certification of synthetic food colours is not required from a food safety perspective. Additionally, food additives other than food colours are not required to be certified by Health Canada. The current requirement that every lot of synthetic food colour be certified by Health Canada therefore provides a level of regulatory oversight more stringent than that which is in place for other food additives and the requirements in many other countries. This places unnecessary burden on both industry and Health Canada. Many of the specifications for food colours contained in the FDR are out of date, and they do not allow for the application of up-to-date internationally accepted food-grade specifications which are, in practice, used by industry. Objectives The amendments to the FDR aim to modernize and improve food labelling to reflect the latest science (e.g. updates to the Daily Values (DV) for nutrients to be based on the most recent dietary recommendations); introduce new requirements such as a note at the bottom of the NFt explaining the % DV, serving sizes to always be based on the amount of food typically consumed in one sitting, and improved legibility of the list of ingredients to enable Canadians to make informed choices about their food in order to maintain or improve their health; provide information on the content of sugars and other sugars-based ingredients of prepackaged foods, with the goal of supporting the reduction in sugars intake, as excess sugars intake may lead to overconsumption of calories, and thus to obesity and associated chronic diseases; expand the use of health claims on fruits and vegetables to allow a disease risk reduction health claim linking their consumption to a reduced risk of heart disease; allow for permitted nutrient content and health claims to be made for fresh fruits and vegetables without triggering additional labelling requirements; align food colour labelling requirements with those of other food additives by mandating that food colours be identified using their individual common names in the ingredient list; remove the requirement for certification prior to the sale of each individual lot of synthetic food colours; and allow for the application of internationally accepted food-grade specifications for food colours. Description Nutrition labelling Health Canada is making improvements to the label to focus on nutrients of public health concern; align with existing federal dietary guidance and education campaigns; address the needs of Canadians as heard through stakeholder feedback; reduce the burden on industry; improve international alignment in areas such as DVs; reflect the latest science and Canadians’ eating patterns; and use the new “incorporation by reference” authority to ensure that future updates can be made more efficiently. Serving size Currently, the serving of stated size (“serving size” or “stated serving”) used as the basis for the nutrient content information within the NFt of multi-serving prepackaged products is not mandated in regulation, and its determination is at the discretion of the manufacturer, so the values can vary for similar foods. For example, one bag of crackers might have a serving size of 10 medium-sized crackers (30 g), while another could have a serving size of 8 small crackers (15 g). When serving sizes of similar foods are based on different amounts, it is difficult for consumers to compare and choose between products. Providing the means to compare products at the point of purchase is important in supporting consumers in their efforts to make appropriate food choices, such as when trying to reduce sodium intake. In addition, serving sizes may not always reflect amounts typically consumed in one sitting. These amendments improve the usefulness of the serving size declaration for foods sold in multiple-serving prepackaged products by making the stated serving more realistic. This is being achieved by aligning the serving size more closely with the regulated reference amounts (i.e. the amount that is typically consumed in one sitting). Using the cracker example, the serving size will need to be the number of crackers that is closest to the regulated reference amount of 20 g. The stated serving will be the number of crackers closest to 20 g along with the actual corresponding weight (in grams). Reference amounts for foods have been updated to reflect current consumption patterns (e.g. the consumption of 175 g or three quarters of a cup of yogurt) and marketing trends (e.g. larger “super-sized” prepackaged products). As a result, on-label serving size information will more closely align with what Canadians actually eat, making it easier for consumers to use the NFt in making appropriate foods choices. Nutrients and Daily Values The actual information shown in the NFt will be updated so that Canadians are better able to make food choices based on the most recent scientific knowledge. A number of adjustments have been made based on current recommendations from internationally recognized bodies such as the U.S. Institute of Medicine (IOM) and surveillance data from Canadian sources such as the Canadian Community Health Survey. Specifically, the list of nutrients that must be declared in the NFt (i.e. the core nutrients) has been revised to remove the requirement for the display of information on vitamins A and C, and to add a new requirement for the display of information on potassium. In addition, the DVs for both core and non-core nutrients have been updated to bring them in line with the latest dietary recommendations. To address consumers’ desire to have information for vitamins and mineral nutrients not only on the basis of % DVs, but also in absolute amounts to help comparisons with the levels found in supplements, the Regulations have been adjusted to require their declaration in both ways. These amendments also account for the differences in nutritional needs of infants (those older than six months but less than one year of age) and children (one year or older but less than four years of age). Thus, the % DVs in the NFt on food sold specifically for these infants and children will be derived from the DVs established for their respective age groups. A rule of thumb footnote has been added to the bottom of the NFt to help educate consumers about the meaning of the % DV and how to use this information to make dietary choices. The % DV is provided in the NFt to help consumers assess the relative contribution of that food to a daily amount of the various nutrients. The text reads as follows: “*5% or less is a little, 15% or more is a lot.” The % DV has been at the core of the Nutrition Facts Education Campaign since 2010. Although many consumers have learned how to use the % DVs, others still struggle with the concept behind the % DV. The educational message on how to use the % DV is intended to increase consumers’ awareness and understanding of this concept, ultimately helping Canadians make healthier choices. Sugars labelling In recent years, there has been growing concern over the amount of sugars consumed by North Americans, with some findings linking excessive sugars intake to an overconsumption of calories, which in turn could lead to obesity and associated chronic diseases. These amendments introduce provisions aimed at providing information and educating consumers on the content of sugars and other sugars-based ingredients (i.e. ingredients containing mostly sugars as a nutrient) in the foods they consume, with the intention of supporting the reduction in sugars intake in a manner consistent with the recommendations of Canada’s Food Guide. These amendments include two elements aimed at enhancing sugars labelling: establishing a DV for total sugars and grouping sugars-based ingredients in the list of ingredients. A DV of 100 g has been set for total sugars and the declaration of the % DV for sugars in the NFt will be mandated for all foods. Consumers will be able to use the % DV to determine whether a food contains a lot or a little sugar (as indicated by the rule of thumb footnote), and as a result adjust or limit their sugars intake. Further, the requirement to group all sugars-based ingredients in the list of ingredients following the term “Sugars” is intended to provide greater transparency regarding the various sugars sources that are added to foods. Ingredients with common names such as agave syrup, barley malt syrup, isomaltulose and pear juice concentrate may not be recognized by most Canadians as sugars-based ingredients. Thus, the new grouping approach will help consumers identify unfamiliar sources of sugars in their foods. In cases where a product contains a large proportion of sugars, the grouping will also move the sugars-based ingredients closer to the beginning of the list of ingredients, indicating more clearly the relative proportion of sugars-based ingredients in the product. To address the potential redundancy that could otherwise occur when there is only one sugars-based ingredient in a food and which already contains the word “sugar” as part of its common name (e.g. brown sugar), the amendments include an exemption from the requirement to be labelled in parentheses following the term “Sugars” for these particular ingredients. An additional exemption from this grouping requirement is also provided for human milk substitutes and formulated liquid diets as these foods are strictly regulated and should not be discouraged for consumption on the basis of sources of added sugars by the specific vulnerable groups to which they are targeted. List of ingredients Currently, most prepackaged product labels include a list of ingredients that consumers have indicated is challenging to read. This has been attributed to uppercase print and poor colour contrast. These amendments will improve legibility as follows: require the use of uppercase and lowercase letters; institute minimum type height requirements for ingredients; require good contrast of colour (black text or equivalent dark shade of another colour on a white or other uniform, neutral colour background), with a border around the list or one or more lines above, below or at the sides of the list; explicitly prohibit the practice of horizontal scaling of text (i.e. condensing the width of letters so they take up less space horizontally) in order to improve readability of the information; and mandate bolding of titles such as “Ingredients” and, when used, “Contains” and “May Contain.” Collectively, these changes will give the ingredient list a standard look and feel so consumers will be able to find and read it on food packages more easily. Smaller packages These amendments address concerns raised by industry about the challenges associated with printing the NFt and list of ingredients on smaller packages. Currently, in most cases, no NFt is required when the product has less than 100 cm 2 of available display surface on the label (e.g. gum, breath mints). However, the use of intense sweeteners (e.g. aspartame), the addition of vitamins and/or mineral nutrients and/or nutrient content claims (e.g. sugar-free claims) triggers the requirement for an NFt. Manufacturers of products in smaller packages have indicated that even the smallest of the permitted NFts will not fit on their packages, particularly in light of the new requirements for improving the legibility of the list of ingredients. New measures have therefore been included for smaller packages to help lessen the space impact of the updated legibility requirements. Specifically, sugar-free products sold in packages less than 100 cm 2 will not lose their ability to include a toll-free telephone number or postal address in place of an NFt even when they contain added intense sweeteners. However, a declaration of the number of calories and the amount of sugar alcohols per stated serving will be required immediately following the list of ingredients. An indication that the product is sugar-free must also be legibly displayed on the principle display panel, either by way of a “sugar-free” claim or appropriate display of the common name encompassing the term “sugar-free.” It was also recognized that single-serving prepackaged products which may not necessarily meet the small package cut-off of 100 cm 2 also face challenges in applying the updated labelling requirements due to the increased space that may be required for the list of ingredients. New NFt formats, which are similar to the existing simplified formats for foods with little nutritional value but which may omit certain additional nutrients and the “Not a significant source of…” statement, will therefore now be available for use on all single serving prepackaged products. The amendments also provide an exemption from the requirement to include an NFt for all products with an available display surface of less than 15 cm 2 on the label, such as one-bite confections and very small packages of gum containing two to four small pieces. Allergen labelling Consumers with food allergies or sensitivities rely heavily on information provided on the labels of foods to know whether they are safe to consume. Food allergens, gluten sources and added sulphites must always be identified on the label of prepackaged foods, either in the list of ingredients or in a separate statement with the title “Contains.” When a “Contains” statement is used, it must appear right after the list of ingredients. These amendments introduce a new requirement stating that when a “Contains” statement is used, it must follow the same legibility requirements as those for the list of ingredients. Additionally, if the list of ingredients is bound by a border or lines, the “Contains” statement must also be inside the border or lines. Although the existing Regulations do not require the declaration of potential food allergens or potential sources of gluten that result from cross-contamination, manufacturers may identify the need to use a precautionary declaration (as is often done under the existing Regulations using “May Contain” declarations). Under these amendments, any precautionary declarations will also have to appear immediately after the “Contains” statement or, in cases where there is no “Contains” statement, the precautionary declaration will have to appear right after the list of ingredients. Additionally, any precautionary declaration will need to appear in the same font size as the ingredients in the list. This will ensure that the information consumers require to avoid these specific ingredients due to food allergies or sensitivities is always grouped together in the same place on the label. Efficiency measures In keeping with the legislative authorities of the Jobs, Growth and Long-term Prosperity Act of 2012, and to achieve efficiency gains, more timely updates to scientific information will be achieved by moving information from the Regulations into documents that are incorporated by reference and may be updated administratively by the Minister. These include tables of information that set rules for labelling requirements (DVs and reference amounts) and a directory that includes figures (graphics and descriptions) that represent all possible acceptable formats of the NFt. These amendments move these tables and figures into documents that are incorporated by reference in order to allow for updates and additions to the tabulated information. The three documents to be incorporated by reference are Nutrition Labelling – Table of Reference Amounts for Food (formerly Schedule M to the FDR); Nutrition Labelling – Table of Daily Values (this is a new document replacing the reference standards in the Table to Section B.01.001.1 and the recommended daily intakes found in Table I to Division 1 and Table I to Division 2 of Part D of the FDR); and Nutrition Labelling – Directory of Nutrition Facts Table Formats (formerly Schedule L to the FDR). These documents are available to all stakeholders through the Government of Canada website. Health Canada will keep stakeholders advised of potential changes to these incorporated documents through consultation and notification processes. Fruit and vegetable health claim These amendments introduce measures that will make it easier to let Canadians know the health benefits of eating fruits and vegetables. The claim “A healthy diet rich in a variety of vegetables and fruit may help reduce the risk of heart disease” will now be allowed on fruits and vegetables as specified in the Regulations. The current Regulations require that prepackaged products carry an NFt on the label whenever a health claim is made for that food, unless the product is a one-bite confectionery product, milk in glass bottles, or a prepackaged individual portion of food that is solely intended to be served by a restaurant with meals or snacks. Nutrition and health claims made for non-prepackaged fruit and vegetables, or such claims made specifically by third parties for prepackaged fruit and vegetables, currently trigger the energy value or the amount of the nutrient that is the subject of the claim to be included on the label or in the advertisement in which the claim is made. These amendments will allow nutrient content and health claims to be made for all fresh fruits and vegetables without triggering any accompanying nutrition information. Food colours The amendments will require that manufacturers list all food colours by their common name (as specified in the Regulations) within the list of ingredients on the food label. This will enable consumers who have sensitivities to specific food colours to avoid those ingredients when shopping for food. It will also align the labelling requirements for food colours with those of other food additives. The standards for food colours in the FDR that are outdated, will be removed and replaced by internationally recognized food-grade quality specifications to reflect current scientific standards where they are available. Companies will therefore not have to meet the current FDR requirements for these food colour specifications. These amendments eliminate the current lot-by-lot certification of synthetic colours, which is no longer considered necessary from a food safety perspective. This approach aligns the oversight for food colours with the regulatory requirements for other food additives, and with many other jurisdictions, in addition to reducing burden on both industry and Health Canada. Coming into force and transitional provision Health Canada engaged various stakeholders from the food industry during the development of these amendments and has tried to minimize burden, especially to small businesses, wherever possible. While the Regulations come into force immediately, industry will have five years to update their labels in line with the amendments to the nutrition and ingredient labelling provisions. This will allow sufficient time for industry to make the necessary changes to their labels and also to use up any existing stocks of labels already printed to comply with current requirements. However, if any labelling changes are made in accordance with the new requirements within the five-year transitional period, this will trigger the immediate application of all new labelling requirements. Amendments specifically for the replacement of current outdated specifications for food colours with those that are internationally recognized, as well as removal of requirements for lot-by-lot certification of synthetic colours come into force immediately. Regulatory and non-regulatory options considered Option 1: Status quo The status quo is not viewed as a viable option since current nutritional and ingredient labelling is confusing for Canadians for several reasons: (i) they cannot compare products easily as serving sizes are not standardized; (ii) labels need to be updated to reflect current scientific knowledge; (iii) labels do not currently provide sufficient information on sugars, to help assess whether there is a little or a lot of sugars in prepackaged food; and (iv) they find it difficult to read the list of ingredients on some prepackaged products, which is of particular concern to those who have allergies, food colour sensitivities or other concerns about ingredients. Additionally, a claim to inform Canadians about the health benefits of eating fruits or vegetables to help reduce the risk of heart disease is currently not allowed even though current scientific data supports its use. Finally, the current Regulations contain outdated specifications for various food colours and certification requirements for synthetic food colours that are not in line with Health Canada’s approach to other food additives. Option 2: Voluntary approach Health Canada considered maintaining a voluntary approach to setting serving sizes, but it was determined that this information needs to be standardized in order to alleviate confusion and maximize usefulness for consumers. Since the existing Regulations already set out requirements for the list of ingredients and labelling of sugars, a voluntary approach for improvements around these aspects was not deemed to be a viable option. Allowing the health claim for fruits and vegetables and reduced risk of heart disease through a voluntary mechanism is not possible as the Regulations currently prohibit its use. Similarly, a voluntary approach for the certification of synthetic colours and standards for various food colours was not considered as the Regulations need to be amended in order to modernize the requirements. Option 3: Full alignment with the U.S. With respect to labelling, full alignment with the U.S. is not possible due to Canada’s bilingual requirements, which necessitate a Canadian-specific label. A number of amendments being made, however, align with updated labelling requirements published by the U.S. Food and Drug Administration as a final rule in May 2016. For example, DVs have been updated in both countries to be in line with current Dietary Reference Intakes published by the Institute of Medicine (IOM). Similarly, the amounts of vitamins A and C are no longer required to be displayed on the NFt in either country, while potassium is now a core nutrient. In addition, the new health claim in Canada for fruits, vegetables and reduced risk of heart disease is also permitted in the U.S. Furthermore, the Canadian amendments now reference internationally accepted standards for food colours that are in line with the standards currently used by industry in the U.S. While the U.S. will require vitamin D to always be declared, vitamin D will be voluntary in Canada unless it is added to a food (e.g. such as in the case of mandatory fortification of milk, margarine, etc.) or when it is the subject of a claim, at which time its declaration becomes mandatory in the NFt. As vitamin D occurs naturally in so few foods, this approach will avoid declarations of “zero” in the vast majority of foods, while also limiting costs to industry. The new rules in the U.S. will now mandate a declaration of the amount of added sugars (expressed in grams and as a % DV) in a line just below the existing gram amount for total sugars. This is different from the new approach in Canada for improving information on the sugars content of foods, which now includes a % DV for total sugars (in addition to the existing gram amount), as well as a requirement to group sugars-based ingredients together within the list of ingredients. Although Canada and the U.S. are implementing different approaches for labelling the sugars content of foods, the changes to sugars labelling in the U.S. and Canada have the same overall objective (i.e. to provide consumers with information they need to help enable them to lower their sugars intake, if they so choose). While consultations during 2014 presented Canadian consumers with proposals for consideration of the % DV approach for total sugars as well as the added sugars approach displaying the amount in grams, the feedback results indicated that Canadians found the % DV approach for total sugars easier to understand and more useful than the added sugars approach also being considered at the time by the U.S. Although full alignment with the U.S. was not possible, differences between the two countries’ requirements are not expected to cause significant burden to industry. Option 4: Proposed regulatory approach (recommended option) These amendments represent significant improvements in the quality of information provided in nutritional labelling. For example, the updated requirements will make it easier for Canadians to read labels and make comparisons between prepackaged foods. Furthermore, the new % DV for total sugars will help Canadians make food choices aligned with Canada’s Food Guide. In addition, the outdated standards for food colours will be replaced by internationally recognized specifications that reflect current scientific standards where they are available. Furthermore, the requirement for the certification of synthetic food colours will be removed so that regulatory oversight will be in line with that applied to other food additives. Finally, these amendments will allow the use of the health claim relating to consumption of fruits and vegetables and reduced risk of heart disease, thereby allowing Canadians to be better informed of the health benefits of eating fresh fruits and vegetables. In the spirit of regulatory cooperation, changes are aligned with the U.S. final rule published in May 2016 to the extent possible (updates to DVs, serving sizes, increased visibility of calories). Differences between the proposals are not expected to cause significant burden to industry. Benefits and costs The cost-benefit analysis (CBA) sought to quantify the proposed benefits and costs of making amendments to the FDR with respect to the content of nutrition labels on prepackaged foods sold in Canada. The amendments include changes to the presentation and content of the NFt, the listing and format of the ingredients list, the listing of food colours by their common name, and the use of claims on prepackaged fruits and vegetables. The analysis identified two groups that would be directly impacted by the amendments: Canadian consumers and the Canadian food manufacturing and retail industry. Nutrition is an important component of health, which in turn has a direct impact on the Canadian economy. For example, employees with poor nutritional health were found to take an estimated 21% more sick days and were 11% less productive than their counterparts who ate a healthy diet. Sick days and lost productivity due to ill health represent indirect health costs, leading to lost economic production. Furthermore, the health of the population is of importance to policy makers, since health care spending in Canada, when federal health transfers and respective provincial/territorial (P/T) health budgets are considered, is one of the largest expenditures by governments. A report by the Canadian Institute for Health Information (CIHI) projected that direct health care costs alone were close to $215 billion in 2014; this represents approximately 11% of the Canadian gross domestic product (GDP) in 2014. Direct costs in this case would not only include coverage for health services in P/T jurisdictions (i.e. hospital and health practitioner care, drug formulary), but also costs for insurers, such as drug benefits schemes and out-of-pocket expenses for services not covered through public or private insurance. There are approximately 7 000 food manufacturing firms operating in Canada directly affected by these amendments, representing close to $88 billion in yearly revenues and injecting approximately $21 billion into the Canadian economy. When the entire Canadian food manufacturing and retail supply chain is considered, there are approximately 26 000 small and medium enterprises (SMEs) representing non-alcoholic beverage manufacturers; eggs, poultry and meat processing; retail and grocery products that are produced in-house or through private label; raw dairy or refined products; importers and exporters of food products (for example cake icing manufacturing and distribution, confectionery produced abroad and imported into Canada); the baking and milling industry; and large manufacturers of processed foods. Approximately 80 000 products, measured as stock-keeping units (SKUs), should be impacted by these amendments. The CBA examined whether health outcomes, and therefore health spending, could be reduced for five different chronic diseases that were most linked to diet and nutrition. The selected diseases were cardiovascular disease, malignant neoplasms, diabetes mellitus, nutritional deficiency and musculoskeletal disease. These five diseases accounted for approximately $26 billion annually in both direct and indirect health expenses. These amendments are based on the assertion that by enabling Canadians to compare products more easily and make more informed choices of the foods they consume, their overall health would improve. A conservative approach of a small (1%) improvement in health outcomes was applied to estimate the anticipated benefits for the five chronic diseases; the approach taken in the U.S. used a 3% benefit measure. The improvement in health outcomes was compounded annually over 10 years. Anticipated savings were calculated to be approximately $275.3 million annually over a 10-year period. It is anticipated that total benefits would amount to $2.75 billion or $1.96 billion net present value. Canadian industry provided costing input through a consultation and survey process coordinated by the respective industry groups. Industry groups were asked to provide all costs associated with changing the design of their product label. These estimates were based on input that the groups received from Health Canada during the July 2014 consultation period. In finalizing the amendments, a number of changes have been made to the proposals that were put forward in 2014, as regulatory elements have been refined to reflect the intended goals of the Regulations and the feasibility of undertaking particular policy directions. The industry estimates therefore take into account some amendments that were proposed at that time but are not being carried through as part of these final amendments. The removal of the proposed requirement to list vitamin D and added sugars in the NFt are two examples of where feasibility was reassessed; however, industry estimates take into consideration these two originally proposed elements as a means of maintaining a more conservative cost estimate. In order to remain conservative in the CBA estimates, industry was asked to provide estimates based upon the highest cost scenario; however, in most instances, estimates were provided for minor, medium and major label changes. A number of industry groups were uncomfortable with providing estimates without fully being aware of the final proposed amendments that were to be prepublished in the Canada Gazette, Part I. By allowing the option of providing the highest cost scenario, industry stakeholder groups were able to provide costing data, as one of their greatest concerns was an underestimation of costs in an area that would directly affect their membership. This approach also ensured that industry impacts would not be understated. A concerted effort was made to include all industry input. Due to the variability of figures provided and the need to include all industry input, an adjusted weighted figure was used to account for all estimates. The adjusted weighted figure applies more weight to the average (or mean) of the sum of each cost-per-SKU value, while applying a reduced weight to estimate outliers (i.e. a number that is outside the normal range). Using a cost-per-SKU estimate that applies an adjusted weight, the cost per SKU would be $9,725 or $554.7 million in net present value (NPV) as a one-time compliance cost to industry. If the median (which represents where the majority of cost per SKU values fall) is used, the one-time cost to industry decreases to $8,000/SKU or $456.3 million in NPV. Using a one-time compliance cost that applies a weight-adjusted average cost per SKU provides the most accurate estimate of total industry costs based upon all input received by industry, while a median figure provides the most common cost per SKU figure provided by industry. If the weight-adjusted and median estimates are extrapolated to a cost per company, estimates are between $22,820 and $27,746 (including manufacturers and impacted retailers). Table 1: Cost-benefit analysis, weight-adjusted average This table shows the cost-benefit analysis. A. Quantified impacts ($) A. Quantified impacts ($) A. Quantified impacts ($) A. Quantified impacts ($) A. Quantified impacts ($) Base Year Year 1 Final Year Year 10 Total (PV) Annual Average Benefits Indirect cost savings Cardiovascular disease Malignant neoplasms Diabetes mellitus Nutritional deficiency Musculoskeletal disease Total indirect savings $3.62M $5.86M $1.45M $0.003M $14.0M $24.9M $3.96M $6.41M $1.59M $0.003M $15.3M $27.3M $26.5M $42.8M $10.6M $2.11M $102.2M $184.2M $3.79M $6.13M $1.52M $3,100 $14.6M $26.1M Direct cost savings: hospital and pharmaceutical costs Total benefits $238.3M $263.2M $260.8M $288.1M $1.742B $1.926B $249.2M $275.3M Cost (see footnote 1*) Industry — one-time compliance Minor Medium Major $150.7M $412.6M $674.5M $0 $0 $0 $150.7M $412.6M $674.5M Total cost $9,725/SKU $554.7M $0 $554.7M Net benefit –$291.5M $288.1M $1.371B B. Qualitative impacts Increased potential for product reformulation with improved nutrient profiles. Reduced loss of productivity due to morbidity resulting from unhealthy eating patterns. Trickle-down effects of healthy family eating habits into healthy adult eating habits. Positive vital health indicators. Increases in labelling costs may have to be absorbed by Canadian consumers due to increases in food prices to recover costs. B. Qualitative impacts Increased potential for product reformulation with improved nutrient profiles. Reduced loss of productivity due to morbidity resulting from unhealthy eating patterns. Trickle-down effects of healthy family eating habits into healthy adult eating habits. Positive vital health indicators. Increases in labelling costs may have to be absorbed by Canadian consumers due to increases in food prices to recover costs. B. Qualitative impacts Increased potential for product reformulation with improved nutrient profiles. Reduced loss of productivity due to morbidity resulting from unhealthy eating patterns. Trickle-down effects of healthy family eating habits into healthy adult eating habits. Positive vital health indicators. Increases in labelling costs may have to be absorbed by Canadian consumers due to increases in food prices to recover costs. B. Qualitative impacts Increased potential for product reformulation with improved nutrient profiles. Reduced loss of productivity due to morbidity resulting from unhealthy eating patterns. Trickle-down effects of healthy family eating habits into healthy adult eating habits. Positive vital health indicators. Increases in labelling costs may have to be absorbed by Canadian consumers due to increases in food prices to recover costs. B. Qualitative impacts Increased potential for product reformulation with improved nutrient profiles. Reduced loss of productivity due to morbidity resulting from unhealthy eating patterns. Trickle-down effects of healthy family eating habits into healthy adult eating habits. Positive vital health indicators. Increases in labelling costs may have to be absorbed by Canadian consumers due to increases in food prices to recover costs. The estimated costs and benefits of these amendments are shown in Table 1 (above), with a net health benefit of $1.371 billion over a 10-year period. Estimated costs to industry amount to a present value of $554.7 million, while total estimated benefits amount to $1.926 billion. While the costs to industry are high, the anticipated benefits to consumers are nearly four times greater. Costs With an estimated total of 80 000 prepackaged food products, almost all of which will require changes to their product labels due to the new amendments, the costs to industry are anticipated to be significant. Costing estimates were provided by industry organizations, and relied heavily on the cost-benefit analysis undertaken by the U.S. Food and Drug Administration (U.S. FDA) on their proposed nutrition labelling regulation amendments, as well as case studies from an extensive literature review. Canadian industry groups provided estimates from the following sectors: non-alcoholic beverages; eggs, poultry and meat processing; retail and grocery products that are produced in-house or under a private label; dairy; importers and exporters of food products; baking and milling; and large manufacturing corporations of processed foods. Within the cost estimates, which are presented as costs per SKU ($/SKU), industry stakeholder organizations identified the following two factors as implications on costs due to the amendments: 1. Adjusting serving sizes and nutrient analysis These amendments will require serving sizes to better reflect the amount of a food typically consumed in a single sitting. An adjustment to the stated serving size will require industry to generate updated nutrient values to be displayed in the NFt of their products. In some instances these changes will mean that health and nutrient content claims made on the front of the package may no longer be permitted on certain products that currently carry them. Conversely, these adjustments could also increase the declared amount of specific nutrients per stated serving, such as fibre, which could be sufficient to enable a claim. Costing figures were not provided for adjustments being made to serving sizes; however, it was assumed that these costs would be included in the cost of label printing and nutrient analysis. Changes are being made to the list of core nutrients. These amendments will remove the mandatory inclusion of vitamin A and vitamin C and specify that potassium must now be listed. Estimated costs to conduct any necessary nutritional analysis due to changes to the required declaration of nutrients were provided by industry; these range from $750/SKU to $3,200/SKU, the majority of estimates fell close to $1,700/SKU. Based on the cost estimates and survey responses provided by Canadian industry, it is assumed that the majority of nutrient content analysis will be carried out through product analysis and not from calculations based on recipes. 2. Design and printing of new packaging The reformatting of the NFt is the highest cost faced by industry. In the Regulatory Impact Analysis done by the U.S. FDA, it was determined that, across product categories, the cost of changing product labels ranged from $1,100 to $2,600 (in 2003 U.S. dollars) per SKU. Results provided by Canadian industry were significantly higher and detailed responses were provided to Health Canada as a means of explaining the variability. In order for new labels to be created, new graphic designs would have to be developed. Costs are most dependent on whether or not the design is being done internally or externally. A number of respondents indicated that a longer coming-into-force period could significantly reduce these costs. Design costs ranged from $700/SKU to $12,000/SKU; the majority of costs were close to $4,000/SKU. There are multitudes of ways in which a label can be printed. Regardless of which method is used, the creation of a new printing plate is required. Industry did raise some concerns regarding the label size. However, the current regulatory provision stating that the NFt does not have to exceed 15% of the available label display surface of the product is not changing and industry will have many different formats to choose from. The estimated costs of the creation of new printing plates ranged from as low as $2,000/SKU to as high as $8,000/SKU; the majority of costs were estimated to be $3,000/SKU. The physical label cost, as well as the packaging that it must be printed on, was highly variable. Industry estimates ranged from $700/SKU to $10,000/SKU; the higher end of the estimate would represent a label with many colours and unique printing requirements. Labour As labour costs will be associated with all aspects of the label design, many respondents found this category of questions difficult to answer. As a means of avoiding any risk of double counting, respondents were encouraged to consider their compliance burden. Labour in this instance is assumed to be human capital costs due to the regulatory amendments. Some examples of tasks could be product focus groups to test package usability, coordination with regulatory authorities, or in-house or external staffing required to comply with new regulatory changes, such as updates to the product website. These costs ranged from $400/SKU to $2,500/SKU. It should be noted that this CBA assumes that the calculated labour costs only include incremental one-time costs to meet the requirements of the amendments. Therefore, it is assumed that no new administrative burden will be placed on industry in regard to reporting and compliance. Transition period The length of the transition period has been identified by the food manufacturing industry as a major determinant of cost. In consultations with the food manufacturer stakeholder groups, it was noted that a longer transition period would allow manufacturers to sell existing product stock and exhaust their older labels, thereby reducing product and label waste. Some survey respondents indicated that internal labour costs and the amounts of waste associated with paper stock would be extremely high with an 18-month to 3-year transition period; one respondent indicated that estimated costs to industry could double if the transition was less than 5 years. The Regulations provide a transitional period where manufacturers will be eligible to use the new labels within a five-year time frame. This transitional period does not change the cost per SKU amount; however, it allows manufacturers and retailers to absorb the label change costs at an earlier date. An adjustment has been made in the calculation of the discounting to reflect the transitional period. The discounting amount begins within the five-year period, as opposed to beginning in year one of the new amendments. Using the applied discounting adjustment, the total cost to industry calculated at year one has a net present value of $554.7 million. Cost to consumers The analysis acknowledges that Canadian consumers may be faced with increased food costs as manufacturers and retailers recover their compliance costs associated with the amendments. Sample of label costs Based on input from industry, calculations were done for three different scenarios: a minor, medium, and major label change. In the majority of instances, industry groups were able to provide a sample of anticipated costs based on estimates of the cost components of a label change (i.e. the ingredient list and NFt). An outline of these costs is provided in Table 2. Each type of label change was calculated by taking the average of each cost component where identified at each label change level (i.e. minor, medium or major). Table 2: Sample of label costs This table shows samples of label costs. Level of Change Cost of Label Production (per SKU) Total Minor $2,500 $200,000,000 Medium $7,500 $600,000,000 Major $10,500 $840,000,000 The majority of cost-per-SKU estimates were close to $8,000; this figure represented the median of all provided estimates during the consultation and survey period. It should be noted that industry was encouraged to provide their highest cost or “worst-case scenario” estimates as a means of facilitating the gathering of comprehensive label cost estimates. It was determined that the best method to account for all costs was to perform an adjusted-weight average calculation, which accounts for all provided cost-per-SKU estimates; this method also allowed for the inclusion of outliers. Using an adjusted-weight cost estimate, it was determined that the average cost-per-SKU would be $9,725 or a total one-time compliance cost of $778 million ($554.1 million NPV) for 80 000 SKUs. Comparison to international jurisdictions As a means of testing the validity of the estimates provided by Canadian industry, a comparison was performed to the analysis provided by the U.S. FDA and by the European Commission (EC). The U.S. FDA reported a one-time cost to industry of $2 billion with a three-year coming-into-force period; when this is adjusted for the Canadian market (i.e. the number of SKU in Canada), the costs are estimated to be approximately $232 million or $2,900/SKU. The EC estimates were close to $1.6 billion (in Canadian dollars), and the figure included a coming-into-force period of three and five years that yielded identical costs. The adjusted EC total cost per SKU in Canada would be approximately $7,000, or $560 million. The U.S. FDA and EC cost estimates would place Canada closer to the minor and medium cost estimates provided by industry in reference to Table 2. Differences in cost estimates between Canada, the U.S. FDA and the EC illustrate how larger economies of scale can greatly reduce the nutrition label compliance burden on industry. Therefore, any alignment opportunities could help to reduce some of the burden for Canada’s food manufacturing and retail industry. The estimated one-time compliance cost to Canadian industry would range from $200,000,000 to $840,000,000. The average cost per SKU, using an adjusted weighted average, would be $9,725, which would lead to a total one-time cost of $778 million, or $554.7 million in net present value dollars. This estimated one-time cost would represent 0.6% of the total $88 billion in revenues for the Canadian food manufacturing industry. Reformulation A number of industry groups identified reformulation as being a major cost implication. Reformulation occurs when the product ingredients or the amount of certain nutrients are changed in order to comply with regulatory changes, to address public health concerns (e.g. trans fat, sodium and sugars), and to address consumer concerns or for cost-effective purposes. However, while these amendments could instigate a change in the consumer preference of certain foods, they do not require that industry reformulate its products. Companies may choose to reformulate their foods, but this would be a business decision. Based on figures from the U.S. FDA, adjusted to Canada, the total industry-wide cost for industry to reformulate its products could range from $11.4 million to $106 million. Benefits These amendments are based on the assertion that equipping Canadians to compare products more easily and make more informed choices about the foods they consume will improve their overall health. An extensive literature review using peer-reviewed journal sources, academic position papers, government publications and stakeholder consultations yielded few articles that directly linked the use of a nutrition label to measurable outcomes outside of a laboratory setting. Consequently, a number of assumptions were made as a means to address this knowledge gap, while providing clear benefit estimates. The indicated use of the NFt ranges from approximately 44% to as high as 88%. This estimate is based upon a variety of demographic variables. The majority of studies found in the literature review indicated an NFt and list of ingredients usage rate of between 60% and 75%; these two percentages were used in the benefit calculations of the CBA. The literature indicated a number of common characteristics of individuals who would most likely use an NFt and ingredient list. Individuals who were female, university-educated, with a middle income or greater, the primary food purchaser, the primary food preparer, and a parent/guardian of younger children; people with specific dietary requirements (i.e. related to their health); and people who were aware of the diet-disease relationship were most likely to use on-pack nutrition information. However, a number of studies examined targeted nutrition labelling interventions, and regardless of socio-economic status, disease status or whether targeted education campaigns occurred, all members of Canadian society have an equal opportunity of benefiting from these amendments. The second assumption is related to what prompts individuals to behave in a manner that is either beneficial or detrimental to their health. The health belief model is a tool used to gauge the compliance of individuals with healthy behaviour and is based upon whether the individual perceives a threat to his or her health and whether this perceived threat is great enough to change behaviour. Building on past educational efforts and to complement changes being made to food labels as a result of these amendments, Health Canada is planning future educational campaigns relating to the NFt. Label use compliance is usually high during the beginning of educational campaigns among label users, then gradually decreases over time. The analysis for this CBA assumes that the NFt compliance rate is 50% for individuals who refer to the NFt and ingredient list and observe the daily recommendations. The benefit calculation in the CBA assumed that a modest 1% improvement in health outcomes for cardiovascular disease, diabetes mellitus, malignant neoplasms, musculoskeletal disease and nutritional deficiencies would amount to savings in indirect and direct costs based on nutrition label use. Therefore, the benefit calculation in the CBA only accounts for Canadians diagnosed with one of the five chronic diseases most linked to diet. The 1% improvement was applied to the economic burden of illness calculations by the Public Health Agency of Canada. These five diseases account for approximately $26.3 billion in yearly indirect and direct costs; this is described below in Table 3. Table 3: Cost of nutrition-linked diseases in Canada, 2008 (current dollars) This table shows the cost of nutrition-linked diseases in Canada, 2008 (current dollars). Illness Costs (2008 Dollars) Costs (2008 Dollars) Costs (2008 Dollars) Illness Direct Indirect Total Cardiovascular diseases $11,692,700,000 $362,000,000 $12,054,700,000 Malignant neoplasms $3,828,100,000 $586,100,000 $4,414,200,000 Diabetes mellitus $2,178,200,000 $145,200,000 $2,323,400,000 Nutritional deficiency $343,900,000 $300,000 $344,200,000 Musculoskeletal disease $5,780,800,000 $1,398,000,000 $7,178,800,000 Total $23,832,700,000 $2,491,600,000 $26,315,300,000 A sensitivity analysis using reductions in the economic burden of illness was calculated for 0.1%, 0.5%, 1% and 2%; figures are provided in Table 4 below. A 1% improvement in health due to label use would lead to an average annual reduction of $275.3 million in health care costs. Over a 10-year period, it is anticipated that total benefits would amount to $1.926 billion. It was determined that a 1% reduction in health burden for the five chronic diseases would be the most appropriate and conservative measure when calculating the benefits of the regulatory amendments. Table 4: Estimated benefits using economic burden of illness (EBIC) for 0.1%, 0.5%, 1% and 2% reduction compounded annually (see footnote 2) This table shows the estimated benefits using economic burden of illness (EBIC) for 0.1%, 0.5%, 1% and 2% reduction compounded annually. Percentage Benefit Percentage Benefit Percentage Benefit Percentage Benefit Percentage Benefit Year 0.1% 0.5% 1% 2% 1 $26,315,000 $131,577,000 $263,153,000 $526,306,000 2 $26,341,000 $132,235,000 $265,785,000 $536,832,000 3 $26,367,000 $132,896,000 $268,443,000 $547,569,000 4 $26,393,000 $133,561,000 $271,127,000 $558,520,000 5 $26,419,000 $134,229,000 $273,838,000 $569,690,000 6 $26,445,000 $134,900,000 $276,576,000 $581,084,000 7 $26,472,000 $135,575,000 $279,342,000 $592,706,000 8 $26,499,000 $136,253,000 $282,135,000 $604,560,000 9 $26,526,000 $136,934,000 $284,956,000 $616,651,000 10 $26,553,000 $137,619,000 $287,806,000 $628,984,000 Total over 10 years $264,330,000 $1,345,779,000 $2,753,161,000 $5,762,902,000 This assumption was tested for validity using two tests. Test 1 — Percentage reduction in cost due to label use, by disease It was found through the literature review that an improved diet could reduce coronary heart disease and stroke mortality by 20%, and cancer and diabetes mortality by at least 30%. A further calculation was made for reductions in morbidity for coronary heart disease and stroke by 10% and cancer and diabetes morbidity by 15%. A reduction in mortality and morbidity was not provided for nutritional deficiency or musculoskeletal disease. It was assumed that mortality would be least affected by diet while morbidity would be most affected; therefore, 10% mortality and 15% morbidity rates were used in the formula. Using the figures above, and assuming a label use of 60% and 75%, and a usage rate of 50%, these values were tested against the economic burden of illness calculations by disease group. The tests demonstrated similar results to the estimated 1% reduction in illness for both the 60% and 75% label use that were equivalent to a 0.8% and a 0.9% reduction in health costs. Test 2 — Estimate welfare gain from label use, Canadian population This test was adapted from the U.S. FDA and includes the entire Canadian population, not simply the population of Canadians diagnosed with one of the five diseases of focus. This assumption states that the years following the initial regulation of nutrition labels lead to a $0.07 to $0.11 welfare gain per day; this equates to a $25 to $40 gain annually. Given that the changes being put forward for nutrition labelling are in fact amendments to the current system, the full estimate of the welfare gain will most likely not be realized to the full extent. The revised calculation will reduce the benefits by 50%, with the underlying assumption being that the amendments will augment existing welfare gains through improved product disclosure. The standard label use figures of 60% and 75% were applied to account for Canadians who read the label. This test multiplies the anticipated welfare gain by the Canadian population, and then makes adjustments for label use and compliance. The results were similar to the initial 1% reduction in the economic burden of illness estimate used as the principal benefit calculation. A detailed summary of each test and the corresponding data are available in the CBA (the full CBA is available upon request). Over a 10-year period, it is anticipated that total benefits would amount to $1.926 billion in direct and indirect cost savings to the health system and, by further extension, to the Canadian economy. “One-for-One” Rule These amendments modify the existing Regulations under the FDA. While changes to labelling will be required, which may necessitate nutrient analysis of products, these changes would ordinarily occur over the product life cycle. Industry stakeholders have identified this cycle as being as low as six months to upwards of five years. A majority of those affected in the industry will have opportunities to change their label within the natural product life cycle due to the longer transitional provision of five years. It has been determined that the “One-for-One” Rule does not apply, as the amendments will not impose a new administrative burden on business. Small business lens The small business lens applies to regulatory proposals that affect small business and that would impose a nationwide cost over $1 million annually. The Treasury Board Secretariat defines a small business as any business, including its affiliates, that have fewer than 100 employees or between $30,000 and $5 million in annual gross revenues. There are approximately 26 205 small enterprises in Canada that could be affected by these amendments, representing close to 96% of all food manufacturers and retailers in Canada: 23% are food manufacturers (including retail and commercial bakeries); 2% are soft-drink manufacturers; 29% are food and beverage wholesaler-distributors; and 46% are retail stores. Due to the often restricted access to capital that small businesses have, three provisions have been specifically designed to lessen the impact on small businesses. This table shows the number of enterprises by industry sectors. NAICS (see footnote 2*) Industry Sector Small All Enterprises % Micro and Small 311 Food manufacturing 6 086 6 422 94.7% 312 Beverage and tobacco product manufacturing 295 305 96.7% 413 Food, beverage and tobacco wholesaler-distributor 7 631 7 714 98.9% 445 Food and beverage stores 12 181 12 702 95.9% 452 General merchandise store 12 13 92.3% 1. Transitional provision In consultations with industry, a longer period to transition labels to be in line with updated requirements was identified as having the largest impact on reducing label costs. Due to the longer product turnover and the longer life cycle of labels produced by the majority of small businesses, a transitional period of five years is being provided for all labelling-related provisions. A five-year transitional period will allow small businesses to use up existing label stocks, plan and gather capital for the label change, and allow them to use in-house resources rather than having to hire external people to design new labels, if necessary. Many industry groups highlighted the latter as a large financial burden, although they did not quantify the exact burden. 2. Exemption for micro firms processing and selling Products that are sold by the same person(s) that produced them and are sold at places such as farmers’ markets, craft shows, roadside stands, sugar bushes, and flea markets are currently exempt from the requirement to carry an NFt under the Regulations. While it is difficult to identify precisely the number of such firms operating in any given year, as these enterprises tend to come in and out of operation, it is possible to estimate the size of the exemption using the proxy of farmers’ markets. There are 508 identified farmers’ markets in Canada, according to a national study conducted in 2009. (see footnote 3) The average market has 25 vendors, and each vendor in turn averages 1–5 employees. Total annual sales from vendors at these markets are estimated to be $1.03 billion. The proposed amendments would maintain this exemption for these 12 700 firms. 3. Exemption for retail from using bullets in the list of ingredients In order to improve the legibility of the list of ingredients, the proposed amendments would have required the use of a bulleted list of ingredients instead of commas, which are used under the current practice to separate ingredients. Businesses that use retail or scale labels, particularly small businesses, indicated a requirement for bullets would create a substantial cost, as the existing machines are incapable of printing a bulleted list of ingredients. Retail and grocery stores in general indicated that the cost of replacement for each store could reach well over $10,000. The cost of even a simple retail scale that produces labels would be in excess of $2,000. It would be safe to assume a cost of $5,000 per retail store to replace the existing scales, imposing a cost of over $60 million on the 12 193 retail stores that may produce products that would fall under the proposed amendments. The allowance of the use of commas represents a significant amount of cost avoidance. In order to protect small business from undue hardship, this exemption will now extend to all labels regardless of business sizes. Flexibility analysis This table shows the fexibility analysis. Initial Option Initial Option Chosen Option Chosen Option Coming into force 3-Year CIF 3-Year CIF 5-Year CIF 5-Year CIF Number of firms 26 205 26 205 26 205 26 205 Annualized average Present value Annualized average Present value Compliance cost $149,376,000 $1,396,037,383 $74,688,000 $698,018,692 Administrative cost $0 $0 $0 $0 Total costs $149,376,000 $1,396,037,383 $74,688,000 $698,018,692 Farmers’ market exemption Remove Exemption Remove Exemption Maintain Exemption Maintain Exemption Number of firms 12 700 12 700 12 700 12 700 Annualized average Present value Annualized average Present value Compliance cost Unknown Unknown Unknown Unknown Administrative cost $0 $0 $0 $0 Total costs Unknown Unknown Unknown Unknown Ingredient list format Bulleted Ingredients Bulleted Ingredients Allow Commas Allow Commas Number of firms 12 193 12 193 12 193 12 193 Annualized average Present value Annualized average Present value Compliance cost $6,090,000 $56,915,888 $0 $0 Administrative cost $0 $0 $0 $0 Total costs $6,090,000 $56,915,888 $0 $0 Total costs of all options $155,466,000 $1,452,953,271 $74,688,000 $698,018,692 Using the flexible option, it is anticipated that $754,935,000 in costs could be avoided for small businesses. This figure is based on the $778 million industry one-time cost estimate and on the assumption that a shorter transitional period of less than five years would double all costs. Consultation Nutrition labelling The following stakeholders participated in the consultation processes undertaken in the development of these amendments: Canadian consumers, consumer advocacy groups, food industry, retailers, health organizations, health professionals, scientific experts and academics, and provincial and territorial governments. Consultations associated with the nutrition labelling review began in 2014 when a two-pronged consultation campaign was conducted from January to April of that year. That process consisted of in-person round table discussions with parents and an online consultation to solicit feedback from other interested consumers. In June 2014, Health Canada published the What We Heard report (http://www.hc-sc.gc.ca/fn-an/label-etiquet/modernize-report-moderniser-rapport-eng.php) to provide an overview of the feedback. Through their input, Canadians confirmed that they find the current food labels helpful for making healthier choices and suggested ways to improve the labels to maximize consumer usability. In July 2014, Health Canada launched a second phase of nutrition labelling consultations. Themed technical documents, which incorporated advances in science and the feedback obtained from the first round of consultations, were posted on Health Canada’s website for stakeholder input. To complement the technical input, a consumer-friendly online questionnaire was launched at the same time, and consumer engagement workshops were also conducted in various Canadian cities in September of that year. In response to those consultations, there was overall support for updating the nutrition label. Proposed changes to serving sizes, sugars information, and the legibility of the list of ingredients addressed major consumer concerns expressed in a What We Heard report and were supported by stakeholders such as health professionals and NGOs. Industry stakeholders were supportive of the updates to scientific information, but were concerned with some of the proposed changes, particularly those related to sugars labelling and format changes that would have an impact on label space requirements. The feedback from that round of consultations helped refine and fill in the details for the proposed amendments, and included the following: Consumers and all other stakeholders, including industry, were in favour of making serving sizes more consistent among similar foods. Some industry stakeholders preferred to keep how serving sizes are determined at the voluntary guideline level while other stakeholders such as health professionals, NGOs and academic experts called for a regulatory approach to ensure the use of consistent serving sizes. Feedback on sugars-related proposals (added sugars declaration, % DV declaration and grouping of sugars-based ingredients in the list of ingredients) was mixed. The proposal to declare the amount of added sugars in the NFt was popular among consumers and health stakeholders (including health professionals, NGOs and P/Ts). However, industry stakeholders questioned the scientific basis of requiring the declaration of added sugars in the NFt given that the body metabolizes naturally occurring and added sugars in the same way. Similarly, the inability of analytical methods to distinguish between naturally occurring and added sugars would contribute to significant compliance and enforcement challenges. In addition, industry indicated that research done in the U.S. concluded that consumers have a limited understanding of the “added sugars” declaration in the NFt. Consumers were in favour of DVs for sugars, but industry questioned their basis and health stakeholders were concerned that it might discourage the consumption of healthy sources of sugars, such as whole fruits and vegetables and plain dairy products. Most consumers and health stakeholders believed that the grouping of sources of sugars in the list of ingredients would be useful for consumers, whereas industry was concerned that it would disrupt the conventional practice of listing the ingredients in decreasing order of their weight. Consumers and stakeholders provided mixed feedback on the proposal to change the order of nutrients in the NFt in order to reflect what Canadians should aim to limit and what they should get sufficient amounts of. The % DV footnote (i.e. 5% or less is a little, 15% or more is a lot) was well received by consumers and health stakeholders. Most industry stakeholders expressed reservations about this proposal, particularly about the effect it would have on the size of the NFt. Consumers and stakeholders (such as provincial and territorial governments, health organizations, health professionals, and consumer advocacy groups) were in support of the proposal to the format of the list of ingredients (i.e. the use of uppercase and lowercase letters, good contrast of colour, and use of bullets). Comments from industry expressed concerns about the space requirements for the proposed legibility requirements. Consumers and all other stakeholders, including industry, provided mixed feedback regarding proposed changes to the list of nutrients that must appear in the NFt. There was general support to include potassium and remove vitamin A and vitamin C from the list, although consumers questioned the reason behind removing these two vitamins. There was less support for the proposal to declare vitamin D, specifically among some health professionals and academic experts, mainly because this vitamin occurs naturally in very few foods, such as fatty fish, and that a “0” declaration may give the impression that a food is not nutritious. Fruit and vegetable health claim To make it easier for industry to promote the health benefits of eating fruits and vegetables and in recognizing the link with reducing the risk of heart disease, proposals had been in the works to add a new health claim to that effect. Prior to the publication of the proposed regulatory amendments, stakeholders expressed their support for such a measure as the inability to make this health claim on prepackaged fruits and vegetables has been an irritant to them. Food colours A consultation document (http://www.hc-sc.gc.ca/fn-an/consult/_feb2010-food-aliments-col/index-eng.php) was posted online in 2010 outlining Health Canada’s proposed approach to improving food colour labelling requirements, with direct notification of the consultation sent to select stakeholders including members of the food industry, food associations and specific citizen groups. Most of the comments received during this process were in support of Health Canada’s initiatives (http://www.hc-sc.gc.ca/fn-an/consult/_feb2010-food-aliments-col/food-aliments-col-summary-sommaire-eng.php). Some industry stakeholders expressed concern about space on the label for prepackaged products whose ingredients lists might need to declare more than one added food colour. However, the industry stakeholders also expressed their preference that food colour labelling amendments align with those in the U.S. Further, in September 2014, Health Canada engaged in targeted consultations with specific stakeholders on food colour specifications. The information received through those consultations served as the basis for the changes proposed in the Canada Gazette, Part I. Cost-benefit analysis Industry was surveyed from late 2014 through early 2015 to gather information to support the CBA for the proposed amendments. Health Canada was able to learn more about some of the activities that would be necessary to comply with the proposed changes such as the redesigning and printing of new labels (and possibly discarding old stock if the coming-into-force period was too short), and nutrient analysis for newly designated core nutrients in the NFt. Compliance costs were provided for three- and five-year CIF periods. Prepublication in the Canada Gazette, Part I, and summary of changes The proposed Regulations Amending the Food and Drug Regulations — Nutrition Labelling, Other Labelling Provisions and Food Colours were prepublished in the Canada Gazette, Part I, on June 13, 2015. The proposed Regulations were open for comment for a 75-day period. Approximately 250 sets of comments were received from stakeholders. There was overall support from stakeholders for the proposed changes to update nutrition labelling in line with current science and to make the information easier for Canadians to use and understand; to improve the legibility of the list of ingredients and of any “Contains” statement(s) or precautionary declaration(s) for the presence of food allergens, gluten sources and, where applicable, added sulphites; to require more transparent labelling with the specific common name of any food colour that is added to a food; to eliminate the certification requirements for synthetic food colours; and to update certain outdated food colour standards with internationally recognized specifications. Industry stakeholders were supportive of the updates to scientific information, but were concerned with some of the proposed changes, particularly those related to sugars labelling and format changes that would have an impact on label space. In response to comments and concerns raised by stakeholders during this latest consultation on the proposed amendments, a number of adjustments to the proposed amendments have been made. The comments received along with Health Canada’s response to them are summarized below. Serving size Support was mixed among stakeholders for standardizing serving sizes for multiple serving prepackaged products in line with regulated reference amounts which reflect quantities of food typically consumed in one sitting. Supporters of this approach like the idea that consumers will be better informed with more realistic amounts declared in the NFt, while others expressed concern that basing the information on an amount that is typically consumed rather than a recommended amount may promote overconsumption. Standardizing serving sizes will help consumers compare similar products more easily, thereby providing them the means to make healthier food choices. Using the regulated reference amounts as the basis for setting standard serving sizes will make it easier for consumers to know how many calories and nutrients they are consuming, as they reflect amounts typically consumed and will therefore make it less likely for consumers to need to make calculations. It is recognized that public education around the serving size information will be important for supporting Canadians’ use of this information in making dietary choices. Some stakeholders questioned the proposal to increase the package size threshold for determining what constitutes a single-serving prepackaged product. Whereas the existing Regulations stipulate that a product is to be labelled on the basis of the entire contents of the package when it contains up to 150% of the regulated reference amount for the food, these amendments have increased that threshold to 200% of the reference amount. Some stakeholders expressed concerns that this increase could promote overconsumption of some foods. Increasing the threshold for the basis of determining when a package is to be labelled as a single-serving prepackaged product has been retained at 200%, which is in line with the revised approach in the U.S., and will support consumer preferences to have the information presented for the entire container when it is an amount they are likely to consume. Nutrients, other information and Daily Values While the proposed amendments did not include removal of cholesterol from the core list of nutrients, some stakeholders recommended this. Those from industry stated that this would save space on the label, and others from the health and academic sectors noted that dietary recommendations no longer focus on dietary cholesterol. It has been decided to maintain cholesterol as a core nutrient for the time being until proper assessment and consultations can be undertaken. This approach also aligns with the direction in the U.S. Stakeholders were not in favour of the proposal to remove the currently mandatory % DV declaration for fibre from the NFt, stating that this piece of information is useful in helping consumers to assess the relative fibre content of their food, with many citing multiple benefits of fibre and the low intakes of Canadians. While not all fibres are associated with reducing the risk of cardiovascular disease, which is the basis for the Institute of Medicine’s intake recommendations, all contribute to normal gastrointestinal function. Also, with appropriate messaging, guiding consumers to choose foods higher in fibre can promote a healthier diet, overall. Thus, the usefulness for consumers of a % DV for fibre was acknowledged and a decision was made to retain this piece of information in the NFt. The DV has been updated to 28 g to align with the latest fibre intake recommendations of the Institute of Medicine and many other jurisdictions’ recommendations, and it also aligns with changes recently made to the DV for fibre in the U.S. No change to the approach for expressing saturated and trans fats with a joint % DV was proposed; however, a few stakeholders suggested that having separate % DVs for saturated fat and trans fat should be considered, with some specifically asking that a %DV for trans fat only be required if the food contains partially hydrogenated oils. Based on current evidence of the health effects of saturated and trans fat, the NFt will continue to require a combined % DV declaration for saturated and trans fats. While consumers and health stakeholders were overwhelmingly in favour of the proposal to include a footnote at the bottom of the NFt setting out the rule of thumb for the meaning behind % DVs (i.e. “*5% or less is a little, 15% or more is a lot”), industry expressed concerns over the impact that this new piece of information would have on the width of the NFt. In recognizing the usefulness of the explanatory footnote in helping put the % DVs into context, it has been decided to move forward with this requirement. However, to help alleviate some concerns over the space required for the footnote, these amendments will allow for it to be printed in condensed font. Sugars labelling Feedback received on the two proposed approaches for improving the labelling of sugars was mixed. Industry expressed concerns over the proposed measures, namely suggesting that the link with dietary recommendations related to expression of total sugars as a % DV is not clear, and that grouping sugars in the list of ingredients is inconsistent with how other nutrients are treated and may deter parents and consumers from making sound dietary decisions in the case of foods for special dietary use (e.g. infant formula), which are formulated in accordance with strictly regulated compositional requirements. While consumers and health stakeholders were overwhelmingly supportive of grouping sugars in the list of ingredients, a large proportion from the health sector has concerns that the % DV approach may not serve well for certain healthy foods like fruit and unsweetened dairy products, which in certain cases may unfavourably exceed the 15% threshold. Consumers were disappointed that the proposed amendments did not consider a declaration for added sugars. Unlike an added sugars declaration as requested by some, the % DV declaration for total sugars will include fruit juice, which is high in free sugars and is among the top contributors of Canadians’ overall intake of sugars. Health Canada believes that having information on sugars presented as a % DV will provide consumers with a benchmark to help limit the intake of sugars including free sugars, which is aligned with recommendations of the World Health Organization to limit intake of free sugars. Concerns raised by industry regarding the risk that grouping of sugars in the list of ingredients of sole source nutrition products could unintentionally deter vulnerable population groups away from the products targeted to them are valid. As a result, the amendments will exempt human milk substitutes and formulated liquid diets from the grouping of sugars requirement. Format Stakeholders were generally supportive of the proposed re-ordering of the nutrients presented in the Nutrition Facts table. Certain public health stakeholders did recommend moving sodium below the thick line (above potassium), as this could help facilitate education on the roles of sodium and potassium in hypertension. The intent behind separating sodium and potassium by a thick line in the NFt is to highlight the opposite roles sodium and potassium play in regulating blood pressure. The thick line below sodium information directs the reader’s eye and separates it from the information below it, thus making it easier for consumers to process and remember the information. Moving sodium down below the thick line would defeat this purpose. As a result, it has been decided to maintain the proposed format with sodium above the thick line and potassium below it. With respect to the proposed increase in the size and prominence of calories, stakeholder reaction was mixed. While there was acknowledgement that increasing the size of this information would support visibility and readability, there were some concerns that this could overemphasize the importance of calories when making healthy food choices, which is inconsistent with dietary advice provided by Canada’s Food Guide. In order to balance these concerns, the amendments require calories to be bolded and in a slightly larger type size, but not to the extent required in the U.S. This should help draw attention to calories without diminishing the relative importance of the other information shown in the NFt. List of ingredients There was strong support among consumers and public health and provincial/territorial stakeholders for the proposed formatting requirements to improve the legibility of the list of ingredients (LOI). While industry stakeholders supported the intent of improving the legibility of the LOI, some did raise concerns that the proposed requirements would increase the space occupied by the LOI on packages and consequently present technical challenges for both small- (available display surface of less than 100 cm 2 ) and irregular-shaped packaging, particularly when factoring in the proposed changes to the format of the NFt. One of the main concerns expressed by industry stakeholders was that the proposed use of bullets, rather than commas, to separate ingredients would be difficult to implement due to increased space requirements, technical challenges, and limited capacity of some printing technologies to print bullets. In response to these concerns, on April 22, 2016, Health Canada officials convened a food labelling technical workshop with experts in design, labelling, packaging and legibility to discuss the technical issues noted by industry stakeholders and obtain their expert advice and recommendations on how to best address them. Pursuant to this workshop, the type size requirements for the declaration of ingredients have been adjusted slightly to account for the challenges associated with certain packaging materials, irregular-shaped packages, and printing processes. While it was originally proposed that the type size of the ingredients be consistent with those required for the nutrients in the NFt, it has been decided that type height (based on the lowercase “x”) instead of the type size (based on the PostScript point) be the unit of measure. This will ensure a consistent height regardless of the font type used. The required minimum type height is equivalent to 6-point type in sans serif fonts, except that when the label carries an NFt with nutrients shown in 8-point type, the required minimum type height is equivalent to 8-point type in sans serif fonts. The amendments also remove the proposed requirement for bullets in favour of either bullets or commas to separate ingredients and to also allow that the type size of the title “Ingredients” or “Ingredients:” and any “Contains” statement be the same as for the ingredients in the LOI (as opposed to 2 points larger as originally proposed in the Canada Gazette, Part I). The use of commas in combination with the other formatting changes is sufficient to achieve the intent of improving the legibility of the LOI. Furthermore, technical experts have confirmed that the changes to the title “Ingredients” and any “Contains” statement will not sacrifice legibility, as the required bold type is adequate to highlight their presence in the LOI. Finally, additional flexibility is being provided for small packages under 100 cm 2 , by exempting the requirement that the English and French versions of the list of ingredients begin on a separate line. Declaration of sugars-based ingredients Industry stakeholders pointed out the redundancy of requiring the grouping of sugars-based ingredients after the term “Sugars” when the prepackaged product contains only one sugars-based ingredient which contains the word “sugar” in the common name. By removing this requirement, Health Canada is removing this unnecessary redundancy with the added benefit of potential space savings on the label. Allergen labelling There was general support for improving the legibility of allergen-related statements on labels. However, some concerns about space, especially for small packages, were raised. The proposed requirement for precautionary declarations to start on a new line was noted as being inconsistent with the requirement for the “Contains” statement. These concerns were discussed during the food labelling technical workshop that was held on April 22, 2016. As a result of the feedback received, the regulatory amendments have been adjusted to allow precautionary declarations, when used, to continue on the same line or to start on a new line. This will apply to all package sizes. Smaller packages Industry stakeholders pointed out challenges associated with label space for small packages, particularly for confectionery products. Although these products are quite small, many contain added non-nutritive sweeteners and/or “sugar-free” claims, thereby triggering the requirement to carry an NFt. Manufacturers have indicated that even the smallest versions of the NFt will not fit on their packages, particularly in light of new legibility requirements for the list of ingredients. To address the challenges noted by industry stakeholders, changes to the provisions for packages under 100 cm 2 are warranted. In this regard, adjustments have been made so that sugar-free products sold in small packages with an available display surface under 100 cm 2 will not lose their ability to include a toll-free telephone number or postal address in place of an NFt even when they contain added non-nutritive sweeteners (i.e. aspartame, acesulfame-potassium, neotame, sucralose). However, these products will be required to list the amounts of calories and sugar alcohols per serving of stated size following the list of ingredients. The “sugar-free” claim or the common name that includes the term “sugar-free” must be legibly set out on the principal display panel, i.e. it must be set out using mixed case lettering and appear in type size no less than that of the net quantity, and sufficient contrast between the text and the background. Similar concerns were also expressed by industry with respect to the difficulty in trying to accommodate the NFt and new format for the list of ingredients on single-serving prepackaged products. These are typically smaller packages, often with design challenges, but not usually meeting the 100 cm 2 cut-off for use of the toll-free telephone number or postal address in place of an NFt. To help address the space challenges faced by manufacturers in applying the updated NFt and list of ingredients to the labels of their single-serving prepackaged products, a new series of simplified NFt formats specifically for this category of products has been included as part of these amendments. The application of these new formats will follow a similar hierarchy as for the existing simplified formats described in section B.01.455 of the FDR. Fruit and vegetable health claim Although there was general support among stakeholders for the proposed Regulations allowing a new health claim for fruits, and vegetables and the reduced risk of heart disease, some questioned why certain foods such as corn and juice were excluded from eligibility to carry the claim. Further consideration has been given to the conditions associated with the new health claim in response to comments expressed by some stakeholders. Given that corn is often considered a vegetable and was also included in some important studies that were part of the evaluation looking into the appropriateness of the claim, the amendments have been adjusted so that corn will be eligible to carry this new claim. Similarly, while it was proposed that fruit and vegetable juices not be permitted to carry the claim, the exclusion specifically for vegetable juice and vegetable drink has been reconsidered given that the sugars content is much lower than that of fruit juice, and that they were not included in the definition of “free sugars” in recent recommendations of the WHO. The conditions will also clarify that the seeds of fruits otherwise known as drupes such as coconut, almond and cashews are not considered fruit for the purposes of this claim. Declaration of absolute amounts Consumers expressed interest in having the absolute amounts for all vitamins and mineral nutrients listed for their own health needs and for comparing with supplements. Health Canada determined that there is no additional burden to manufacturers in declaring the absolute amount and that this aligns more fully with the approach taken by the U.S. As a result, the table to section B.01.402 has been amended to require that the declaration of any vitamin and mineral nutrients listed in the NFt be provided as an absolute amount in addition to as a % DV. Food colours Many stakeholders supported the proposal to eliminate the current practice of including only the word “colour” in the list of ingredients and to require a declaration of the common name of the colour when added to a food. However, a key concern noted by industry stakeholders was the increased space that may be required for labelling this information in the list of ingredients. Some consumers and health stakeholders suggested that food colours should be included as part of a “Contains” statement on the label. The amendments will retain the requirements for a declaration of food colours as originally proposed, as this will be consistent with the current approach for the labelling of other food additives. In terms of the proposals for eliminating the requirement for certification of synthetic colours and to allow use of international specifications as a means of updating outdated standards for certain food colours, stakeholders expressed their overall support for such measures. Cost benefit analysis A number of manufacturing stakeholder groups felt that the estimated cost per SKU of $9,725 did not represent the true costs associated with a label change. It was determined that the use of a weight-adjusted average best represents low and high cost outliers while accurately demonstrating where the majority of label costs would fall within the range of received responses. The calculations of the anticipated benefits of the amendments were deemed to be too low by a number of health stakeholders. This figure was used as conservative estimated benefit and was supported by two methodologies used in two other jurisdictions. Stakeholders were given an additional opportunity to provide new label cost estimates following prepublication in the Canada Gazette, Part I; no new figures were provided to Health Canada to reflect the proposed regulatory amendments. Coming-into-force provision The coming-into-force clause has been amended to reflect a five-year transitional period, rather than a coming into force five years from the date of publication of the new Regulations in Part II of the Canada Gazette for the nutrition and ingredient labelling related provisions. At the same time, the coming-into-force clause has been amended so that the regulatory amendments specifically dealing with food additive specifications, including food colour specifications and with synthetic colour certification, come into force immediately upon publication of the final Regulations. Regulatory cooperation In the spirit of regulatory cooperation, the updates to the nutrition information on prepackaged food products in Canada are aligned with the U.S. rules to the extent possible. Both countries require an NFt on most prepackaged products and the NFt is considered to be the gold standard internationally. There are currently design and layout differences between the two countries’ NFts, including bilingual and metric requirements. However, the information in the table is essentially the same and can easily be transferred from one table to the other, converting the information based on the serving of stated size where necessary. The policy objectives for changes in both countries are very similar; however, in some cases, different approaches were taken to achieve similar health objectives. The similarities and differences between both countries are summarized below. Health Canada will continue to monitor developments in the U.S. and give consideration to any future changes. To facilitate compliance with design aspects for the NFt, Health Canada is developing a complete compendium with fillable versions of all formats of the NFt that manufacturers can use when designing their label(s). Key similarities: Basis of the % Daily Values Both Canada and the U.S. have introduced a harmonized set of Daily Values. For macronutrients, the same set of reference standards are being used, while for vitamins and minerals, both Health Canada and the U.S. FDA have adopted values based on a population-coverage approach using the Dietary Reference Intakes (DRI) which were developed for both Canada and the U.S. by the institutes of medicine. This harmonization to a single set of values for both countries will help alleviate a significant irritant commonly cited between the two countries. Key similarities: Serving of stated size Canada is moving to a system of declaring the serving of stated size in a manner harmonized with the U.S. for single-serving containers. Additionally, for multi-serving containers, the method of determining the serving of stated size will be more closely aligned. Key difference: Format Health Canada is slightly adjusting the order in which nutrients are listed in the NFt in order to group energy-providing nutrients together, followed by sodium. This format supports Health Canada’s messaging in its public education campaigns on nutrition. The revised U.S. label has a greater visual emphasis on the caloric content of the food. Health Canada is increasing the font size and bolding for calories, but not to the extent the U.S. requires in their final rule. Health Canada and Canadian health stakeholders are concerned that too great a focus on calories could detract from other important factors in choosing healthy foods. Key difference: Footnote at the bottom of the NFt While the U.S. proposed rule did not specify the exact wording of the footnote that would appear at the bottom of their Nutrition Facts label, and instead requested feedback from stakeholders, the final rule specifies that the wording of the footnote be “*The % Daily Value tells you how much a nutrient in a serving of food contributes to a daily diet. Two thousand calories a day is used for general nutrition advice.” The “5% or less is a little, 15% or more is a lot” footnote is part of a successful consumer education campaign on % DVs in Canada, and an easily remembered rule of thumb. Key difference: Vitamin D The U.S. is adding vitamin D to the list of core nutrients, but Health Canada is not. This is because vitamin D occurs naturally in so few foods that it would most often be a “0” declaration. This will also limit costs to industry (laboratory analysis for vitamin D can be very complicated and costly). However, if vitamin D is added to a product, it must be included in the Canadian NFt (e.g. milk, fortified plant-based beverages, margarine). Key difference: Declaration of sugars in the NFt While both the U.S. and Canadian revised labelling requirements regarding sugars have the same overall objective (to provide consumers with the information they need to lower their sugars intake, if they so choose), different methods of achieving this goal have been chosen. The Canadian amendments include two elements aimed at enhancing sugars labelling: establishing a DV for sugars in the NFt, and grouping sugars-based ingredients together in the list of ingredients (see below). The added sugars approach (in the U.S. proposed rule) and the % DV approach (in the Canadian proposed amendments) were both presented to Canadian consumers during the consultation in 2014. The feedback received indicated that, while both approaches were popular, Canadians found the information about carbohydrates and total sugars confusing when there were added sugars, and they found the % DV approach easy to understand and useful, particularly in association with the % DV footnote. It is important to note that most foods that exceed the 15% DV threshold for “a lot” are foods that contain added sugars. Key difference (ingredient list): Grouping of sugars-based ingredients The new requirement in Canada to have all sugars-based ingredients grouped together was not part of the U.S. updates. However, Canadian consumers showed strong support for the proposed amendments because they increase the transparency regarding the sources of sugars added to food and provide a better estimate of the proportion of added sugars compared to other ingredients in the food. Rationale These amendments are intended to improve food labels, making the information more useful and easier to understand, so Canadians are able to make informed choices about the food they consume in order to help maintain or improve their health. This objective will be met by (i) modernizing and enhancing the labelling of foods with respect to nutrition information; (ii) enabling a new health claim linking the consumption of fruits and vegetables to a reduced risk of heart disease; and (iii) identifying food colours by their specific name in the ingredient list. Health Canada has consulted widely with consumers, key partners and health stakeholders, who have expressed support for the approach. Several options were considered to reduce the cost and burden for industry, particularly small businesses. Options considered were (i) extending the coming-into-force period to minimize the cost of complying with new labelling requirements and allowing time to deplete current label stock; (ii) exempting products that are packaged and labelled at a retail establishment from the requirement to separate each ingredient with a bullet; and (iii) continuing to exempt products sold at a roadside stand, craft show, flea market, farmers’ market or sugar bush by the individual who processed the product from the requirement to display an NFt. Other options were considered, and analysis has determined that implementation of the amendments, while advancing alignment with the U.S. approach to the maximum extent possible, is the best way to proceed. Implementation, enforcement and service standards Implementation Ongoing public education efforts would accompany these regulatory amendments to help consumers understand how best to use the information on the labels to make informed food choices. These include a continuation of the education campaign on % DV, and one on NFt serving sizes. The five-year transitional period for provisions associated with the Nutrition Facts table and list of ingredients will allow sufficient time for industry to make the necessary changes to their labels and to use up any existing stocks of labels already printed to comply with existing requirements. Enforcement The Canadian Food Inspection Agency (CFIA) is responsible for the enforcement of the Food and Drugs Act, as it relates to food. While it is the responsibility of the industry to comply with regulatory requirements, compliance will be monitored as part of the ongoing domestic and import inspection programs, while respecting the resources that the CFIA has for enforcement and compliance verification. Appropriate enforcement action will be taken based on risk. Health Canada will provide guidance to the CFIA on health risk assessments and implementation of these regulatory amendments. A phased-in approach is important in order to give industry and Government time to adapt to the new requirements as well as provide the opportunity for the development of education and compliance tools. Health Canada and the CFIA will advise industry on a Government of Canada implementation plan that will describe how key activities will be managed, such as responding to inquiries, the delivery of information sessions, and updating of inspection and compliance promotion tools. Additionally, the CFIA will outline a phased-in approach to compliance and enforcement activities over the five-year transition period when manufacturers may apply either the former Regulations or the new Regulations. Performance measurement and evaluation Health Canada will implement the program evaluation requirements of the Treasury Board Policy on Evaluation with respect to nutrition labelling through the Food Safety and Nutrition Performance Measurement Strategy, the result-based management tool that measures, monitors and reports on expected results of the Food Safety and Nutrition Program. More specifically, during the five-year transition period, Health Canada will incorporate monitoring and data collection of these nutrition-labelling amendments as part of this strategy. Contact Bruno Rodrigue Policy, Planning and International Affairs Directorate Health Products and Food Branch Health Canada Holland Cross, Tower B, 5th Floor 1600 Scott Street Ottawa, Ontario K1A 0K9 Address locator: 3105A Email: [email protected] Small Business Lens Checklist 1. Name of the sponsoring regulatory organization: Department of Health 2. Title of the regulatory proposal: Regulations Amending the Food and Drug Regulations — Nutrition Labelling, Other Labelling Provisions and Food Colours 3. Is the checklist submitted with a RIAS for the Canada Gazette, Part I or Part II? ☐ Canada Gazette, Part I ☑ Canada Gazette, Part II A. Small business regulatory design This table presents the Small business regulatory design. I Communication and transparency Yes No N/A 1. Are the proposed Regulations or requirements easily understandable in everyday language? ☑ ☐ ☐ In 2003, the Government of Canada made regulatory amendments to the Food and Drug Regulations (FDR) related to the labelling of food. The proposed amendments are written in a language that is similar to what currently exists in the FDR. Manufacturers and importers are familiar with the language used in the Regulations. In 2003, the Government of Canada made regulatory amendments to the Food and Drug Regulations (FDR) related to the labelling of food. The proposed amendments are written in a language that is similar to what currently exists in the FDR. Manufacturers and importers are familiar with the language used in the Regulations. In 2003, the Government of Canada made regulatory amendments to the Food and Drug Regulations (FDR) related to the labelling of food. The proposed amendments are written in a language that is similar to what currently exists in the FDR. Manufacturers and importers are familiar with the language used in the Regulations. In 2003, the Government of Canada made regulatory amendments to the Food and Drug Regulations (FDR) related to the labelling of food. The proposed amendments are written in a language that is similar to what currently exists in the FDR. Manufacturers and importers are familiar with the language used in the Regulations. In 2003, the Government of Canada made regulatory amendments to the Food and Drug Regulations (FDR) related to the labelling of food. The proposed amendments are written in a language that is similar to what currently exists in the FDR. Manufacturers and importers are familiar with the language used in the Regulations. 2. Is there a clear connection between the requirements and the purpose (or intent) of the proposed Regulations? ☑ ☐ ☐ The proposed amendments would make changes to the presentation and format of the Nutrition Facts table (NFt) and list of ingredients. This would allow Canadian consumers to make healthier choices by improving the legibility, ease of use and content of the NFt and list of ingredients. The proposed amendments include updates to the recommended Daily Values and the suggested serving size, in accordance with the latest available science. The proposed amendments would make changes to the presentation and format of the Nutrition Facts table (NFt) and list of ingredients. This would allow Canadian consumers to make healthier choices by improving the legibility, ease of use and content of the NFt and list of ingredients. The proposed amendments include updates to the recommended Daily Values and the suggested serving size, in accordance with the latest available science. The proposed amendments would make changes to the presentation and format of the Nutrition Facts table (NFt) and list of ingredients. This would allow Canadian consumers to make healthier choices by improving the legibility, ease of use and content of the NFt and list of ingredients. The proposed amendments include updates to the recommended Daily Values and the suggested serving size, in accordance with the latest available science. The proposed amendments would make changes to the presentation and format of the Nutrition Facts table (NFt) and list of ingredients. This would allow Canadian consumers to make healthier choices by improving the legibility, ease of use and content of the NFt and list of ingredients. The proposed amendments include updates to the recommended Daily Values and the suggested serving size, in accordance with the latest available science. The proposed amendments would make changes to the presentation and format of the Nutrition Facts table (NFt) and list of ingredients. This would allow Canadian consumers to make healthier choices by improving the legibility, ease of use and content of the NFt and list of ingredients. The proposed amendments include updates to the recommended Daily Values and the suggested serving size, in accordance with the latest available science. 3. Will there be an implementation plan that includes communications and compliance promotion activities, that informs small business of a regulatory change and guides them on how to comply with it (e.g. information sessions, sample assessments, toolkits, websites)? ☑ ☐ ☐ Health Canada plans to send out implementation details as part of the stakeholder notice once the Regulations are published. Health Canada will host a series of webinars in early 2017 to outline the technical details of the Regulations and will respond to technical questions for the first 15 months, while CFIA works to update their compliance and enforcement tools. CFIA will be part of the webinars and they plan to outline their compliance and enforcement approach during this time. Health Canada plans to send out implementation details as part of the stakeholder notice once the Regulations are published. Health Canada will host a series of webinars in early 2017 to outline the technical details of the Regulations and will respond to technical questions for the first 15 months, while CFIA works to update their compliance and enforcement tools. CFIA will be part of the webinars and they plan to outline their compliance and enforcement approach during this time. Health Canada plans to send out implementation details as part of the stakeholder notice once the Regulations are published. Health Canada will host a series of webinars in early 2017 to outline the technical details of the Regulations and will respond to technical questions for the first 15 months, while CFIA works to update their compliance and enforcement tools. CFIA will be part of the webinars and they plan to outline their compliance and enforcement approach during this time. Health Canada plans to send out implementation details as part of the stakeholder notice once the Regulations are published. Health Canada will host a series of webinars in early 2017 to outline the technical details of the Regulations and will respond to technical questions for the first 15 months, while CFIA works to update their compliance and enforcement tools. CFIA will be part of the webinars and they plan to outline their compliance and enforcement approach during this time. Health Canada plans to send out implementation details as part of the stakeholder notice once the Regulations are published. Health Canada will host a series of webinars in early 2017 to outline the technical details of the Regulations and will respond to technical questions for the first 15 months, while CFIA works to update their compliance and enforcement tools. CFIA will be part of the webinars and they plan to outline their compliance and enforcement approach during this time. 4. If new forms, reports or processes are introduced, are they consistent in appearance and format with other relevant government forms, reports or processes? ☐ ☐ ☑ No new forms or processes would be introduced. All reporting, compliance and enforcement would not change from the current Regulations. No new forms or processes would be introduced. All reporting, compliance and enforcement would not change from the current Regulations. No new forms or processes would be introduced. All reporting, compliance and enforcement would not change from the current Regulations. No new forms or processes would be introduced. All reporting, compliance and enforcement would not change from the current Regulations. No new forms or processes would be introduced. All reporting, compliance and enforcement would not change from the current Regulations. II Simplification and streamlining Yes No N/A 1. Will streamlined processes be put in place (e.g. through BizPaL, Canada Border Services Agency single window) to collect information from small businesses where possible? ☐ ☐ ☑ This proposal would not collect information from small businesses. This proposal would not collect information from small businesses. This proposal would not collect information from small businesses. This proposal would not collect information from small businesses. This proposal would not collect information from small businesses. 2. Have opportunities to align with other obligations imposed on business by federal, provincial, municipal or international or multinational regulatory bodies been assessed? ☑ ☐ ☐ Both the U.S. Food and Drug Administration (FDA) and members of the European Union have regulations for food labelling. The U.S. FDA published their final rule in May 2016 and many of the amendments to the Canadian NFt are aligned with the U.S. FDA rule. Changes to the listing of food colour and dye lot certification will allow Canadian labeling requirements to align with internationally recognized standards. Both the U.S. Food and Drug Administration (FDA) and members of the European Union have regulations for food labelling. The U.S. FDA published their final rule in May 2016 and many of the amendments to the Canadian NFt are aligned with the U.S. FDA rule. Changes to the listing of food colour and dye lot certification will allow Canadian labeling requirements to align with internationally recognized standards. Both the U.S. Food and Drug Administration (FDA) and members of the European Union have regulations for food labelling. The U.S. FDA published their final rule in May 2016 and many of the amendments to the Canadian NFt are aligned with the U.S. FDA rule. Changes to the listing of food colour and dye lot certification will allow Canadian labeling requirements to align with internationally recognized standards. Both the U.S. Food and Drug Administration (FDA) and members of the European Union have regulations for food labelling. The U.S. FDA published their final rule in May 2016 and many of the amendments to the Canadian NFt are aligned with the U.S. FDA rule. Changes to the listing of food colour and dye lot certification will allow Canadian labeling requirements to align with internationally recognized standards. Both the U.S. Food and Drug Administration (FDA) and members of the European Union have regulations for food labelling. The U.S. FDA published their final rule in May 2016 and many of the amendments to the Canadian NFt are aligned with the U.S. FDA rule. Changes to the listing of food colour and dye lot certification will allow Canadian labeling requirements to align with internationally recognized standards. 3. Has the impact of the proposed Regulations on international or interprovincial trade been assessed? ☑ ☐ ☐ Considerations have been given to align the proposed amendments with international trading partners such as the U.S. to the maximum extent possible. Current requirements to have bilingual labels in Canada would remain and would not be a change from the requirements that international trading partners are currently following. Member countries of the World Trade Organization (WTO) have been notified of this proposal as per the WTO Technical Barriers to Trade Agreement requirement. Considerations have been given to align the proposed amendments with international trading partners such as the U.S. to the maximum extent possible. Current requirements to have bilingual labels in Canada would remain and would not be a change from the requirements that international trading partners are currently following. Member countries of the World Trade Organization (WTO) have been notified of this proposal as per the WTO Technical Barriers to Trade Agreement requirement. Considerations have been given to align the proposed amendments with international trading partners such as the U.S. to the maximum extent possible. Current requirements to have bilingual labels in Canada would remain and would not be a change from the requirements that international trading partners are currently following. Member countries of the World Trade Organization (WTO) have been notified of this proposal as per the WTO Technical Barriers to Trade Agreement requirement. Considerations have been given to align the proposed amendments with international trading partners such as the U.S. to the maximum extent possible. Current requirements to have bilingual labels in Canada would remain and would not be a change from the requirements that international trading partners are currently following. Member countries of the World Trade Organization (WTO) have been notified of this proposal as per the WTO Technical Barriers to Trade Agreement requirement. Considerations have been given to align the proposed amendments with international trading partners such as the U.S. to the maximum extent possible. Current requirements to have bilingual labels in Canada would remain and would not be a change from the requirements that international trading partners are currently following. Member countries of the World Trade Organization (WTO) have been notified of this proposal as per the WTO Technical Barriers to Trade Agreement requirement. 4. If the data or information, other than personal information, required to comply with the proposed Regulations is already collected by another department or jurisdiction, will this information be obtained from that department or jurisdiction instead of requesting the same information from small businesses or other stakeholders? (The collection, retention, use, disclosure and disposal of personal information are all subject to the requirements of the Privacy Act. Any questions with respect to compliance with the Privacy Act should be referred to the department’s or agency’s ATIP office or legal services unit.) ☐ ☑ ☐ There are no new requirements for submitting data or information to comply with the proposed Regulations. There are no new requirements for submitting data or information to comply with the proposed Regulations. There are no new requirements for submitting data or information to comply with the proposed Regulations. There are no new requirements for submitting data or information to comply with the proposed Regulations. There are no new requirements for submitting data or information to comply with the proposed Regulations. 5. Will forms be pre-populated with information or data already available to the department to reduce the time and cost necessary to complete them? (Example: When a business completes an online application for a licence, upon entering an identifier or a name, the system pre-populates the application with the applicant’s personal particulars such as contact information, date, etc. when that information is already available to the department.) ☐ ☐ ☑ All existing record-keeping requirements of industry to comply with CFIA regulations would remain unchanged with the exception of the certification of synthetic food colouring. All existing record-keeping requirements of industry to comply with CFIA regulations would remain unchanged with the exception of the certification of synthetic food colouring. All existing record-keeping requirements of industry to comply with CFIA regulations would remain unchanged with the exception of the certification of synthetic food colouring. All existing record-keeping requirements of industry to comply with CFIA regulations would remain unchanged with the exception of the certification of synthetic food colouring. All existing record-keeping requirements of industry to comply with CFIA regulations would remain unchanged with the exception of the certification of synthetic food colouring. 6. Will electronic reporting and data collection be used, including electronic validation and confirmation of receipt of reports where appropriate? ☐ ☐ ☑ All existing record-keeping requirements of industry to comply with CFIA regulations would remain unchanged with the exception of the certification of synthetic food colouring. All existing record-keeping requirements of industry to comply with CFIA regulations would remain unchanged with the exception of the certification of synthetic food colouring. All existing record-keeping requirements of industry to comply with CFIA regulations would remain unchanged with the exception of the certification of synthetic food colouring. All existing record-keeping requirements of industry to comply with CFIA regulations would remain unchanged with the exception of the certification of synthetic food colouring. All existing record-keeping requirements of industry to comply with CFIA regulations would remain unchanged with the exception of the certification of synthetic food colouring. 7. Will reporting, if required by the proposed Regulations, be aligned with generally used business processes or international standards if possible? ☐ ☐ ☑ No additional reporting would be required as part of the proposed amendments. No additional reporting would be required as part of the proposed amendments. No additional reporting would be required as part of the proposed amendments. No additional reporting would be required as part of the proposed amendments. No additional reporting would be required as part of the proposed amendments. 8. If additional forms are required, can they be streamlined with existing forms that must be completed for other government information requirements? ☐ ☐ ☑ No additional forms would be required. No additional forms would be required. No additional forms would be required. No additional forms would be required. No additional forms would be required. III Implementation, compliance and service standards Yes No N/A 1. Has consideration been given to small businesses in remote areas, with special consideration to those that do not have access to high-speed (broadband) Internet? ☑ ☐ ☐ Consideration has been given to small businesses in remote areas and it has been determined that these businesses would not be affected by the proposed amendments. Consideration has been given to small businesses in remote areas and it has been determined that these businesses would not be affected by the proposed amendments. Consideration has been given to small businesses in remote areas and it has been determined that these businesses would not be affected by the proposed amendments. Consideration has been given to small businesses in remote areas and it has been determined that these businesses would not be affected by the proposed amendments. Consideration has been given to small businesses in remote areas and it has been determined that these businesses would not be affected by the proposed amendments. 2. If regulatory authorizations (e.g. licences, permits or certifications) are introduced, will service standards addressing timeliness of decision making be developed that are inclusive of complaints about poor service? ☐ ☐ ☑ No regulatory authorizations are being introduced with this proposal. A requirement to certify individual dye lots would be removed in the proposal. No regulatory authorizations are being introduced with this proposal. A requirement to certify individual dye lots would be removed in the proposal. No regulatory authorizations are being introduced with this proposal. A requirement to certify individual dye lots would be removed in the proposal. No regulatory authorizations are being introduced with this proposal. A requirement to certify individual dye lots would be removed in the proposal. No regulatory authorizations are being introduced with this proposal. A requirement to certify individual dye lots would be removed in the proposal. 3. Is there a clearly identified contact point or help desk for small businesses and other stakeholders? ☑ ☐ ☐ The CFIA would continue to perform the enforcement of the labelling requirements and would continue to be the contact point for small businesses and other stakeholders. The CFIA would continue to perform the enforcement of the labelling requirements and would continue to be the contact point for small businesses and other stakeholders. The CFIA would continue to perform the enforcement of the labelling requirements and would continue to be the contact point for small businesses and other stakeholders. The CFIA would continue to perform the enforcement of the labelling requirements and would continue to be the contact point for small businesses and other stakeholders. The CFIA would continue to perform the enforcement of the labelling requirements and would continue to be the contact point for small businesses and other stakeholders. B. Regulatory flexibility analysis and reverse onus This table presents the Regulatory flexibility analysis and reverse onus. IV Regulatory flexibility analysis Yes No N/A 1. Does the RIAS identify at least one flexible option that has lower compliance or administrative costs for small businesses in the small business lens section? Examples of flexible options to minimize costs are as follows: Longer time periods to comply with the requirements, longer transition periods or temporary exemptions; Performance-based standards; Partial or complete exemptions from compliance, especially for firms that have good track records (legal advice should be sought when considering such an option); Reduced compliance costs; Reduced fees or other charges or penalties; Use of market incentives; A range of options to comply with requirements, including lower-cost options; Simplified and less frequent reporting obligations and inspections; and Licences granted on a permanent basis or renewed less frequently. ☑ ☐ ☐ Three options were proposed in the flexible analysis as means to reduce burden on small business: A longer coming-into-force period of five years would allow small business to exhaust their existing product and label stock, without having to throw away product. An exemption for products that are sold at farmers’ markets, farms, and roadside stands. These products would not be required to have an NFt or list of ingredients. An exemption for small business retailers that use scale labels from having to separate each item in the list of ingredients with a bullet; they may continue to use commas. Three options were proposed in the flexible analysis as means to reduce burden on small business: A longer coming-into-force period of five years would allow small business to exhaust their existing product and label stock, without having to throw away product. An exemption for products that are sold at farmers’ markets, farms, and roadside stands. These products would not be required to have an NFt or list of ingredients. An exemption for small business retailers that use scale labels from having to separate each item in the list of ingredients with a bullet; they may continue to use commas. Three options were proposed in the flexible analysis as means to reduce burden on small business: A longer coming-into-force period of five years would allow small business to exhaust their existing product and label stock, without having to throw away product. An exemption for products that are sold at farmers’ markets, farms, and roadside stands. These products would not be required to have an NFt or list of ingredients. An exemption for small business retailers that use scale labels from having to separate each item in the list of ingredients with a bullet; they may continue to use commas. Three options were proposed in the flexible analysis as means to reduce burden on small business: A longer coming-into-force period of five years would allow small business to exhaust their existing product and label stock, without having to throw away product. An exemption for products that are sold at farmers’ markets, farms, and roadside stands. These products would not be required to have an NFt or list of ingredients. An exemption for small business retailers that use scale labels from having to separate each item in the list of ingredients with a bullet; they may continue to use commas. Three options were proposed in the flexible analysis as means to reduce burden on small business: A longer coming-into-force period of five years would allow small business to exhaust their existing product and label stock, without having to throw away product. An exemption for products that are sold at farmers’ markets, farms, and roadside stands. These products would not be required to have an NFt or list of ingredients. An exemption for small business retailers that use scale labels from having to separate each item in the list of ingredients with a bullet; they may continue to use commas. 2. Does the RIAS include, as part of the Regulatory Flexibility Analysis Statement, quantified and monetized compliance and administrative costs for small businesses associated with the initial option assessed, as well as the flexible, lower-cost option? ☑ ☐ ☐ The RIAS includes a breakdown of how the flexible options provide a number of avoided costs for small business. Each of the three options is monetized and demonstrates how these options would avoid a number of financial burdens for small business. The cost avoidance of a transition period of five years would apply to all business. The RIAS includes a breakdown of how the flexible options provide a number of avoided costs for small business. Each of the three options is monetized and demonstrates how these options would avoid a number of financial burdens for small business. The cost avoidance of a transition period of five years would apply to all business. The RIAS includes a breakdown of how the flexible options provide a number of avoided costs for small business. Each of the three options is monetized and demonstrates how these options would avoid a number of financial burdens for small business. The cost avoidance of a transition period of five years would apply to all business. The RIAS includes a breakdown of how the flexible options provide a number of avoided costs for small business. Each of the three options is monetized and demonstrates how these options would avoid a number of financial burdens for small business. The cost avoidance of a transition period of five years would apply to all business. The RIAS includes a breakdown of how the flexible options provide a number of avoided costs for small business. Each of the three options is monetized and demonstrates how these options would avoid a number of financial burdens for small business. The cost avoidance of a transition period of five years would apply to all business. 3. Does the RIAS include, as part of the Regulatory Flexibility Analysis Statement, a consideration of the risks associated with the flexible option? (Minimizing administrative or compliance costs for small business cannot be at the expense of greater health, security or safety or create environmental risks for Canadians.) ☑ ☐ ☐ The most commonly identified risk raised by stakeholders is associated with the coming-into-force period. The five-year transition period would apply to all businesses, as this period must remain the same for all businesses regardless of size. The most commonly identified risk raised by stakeholders is associated with the coming-into-force period. The five-year transition period would apply to all businesses, as this period must remain the same for all businesses regardless of size. The most commonly identified risk raised by stakeholders is associated with the coming-into-force period. The five-year transition period would apply to all businesses, as this period must remain the same for all businesses regardless of size. The most commonly identified risk raised by stakeholders is associated with the coming-into-force period. The five-year transition period would apply to all businesses, as this period must remain the same for all businesses regardless of size. The most commonly identified risk raised by stakeholders is associated with the coming-into-force period. The five-year transition period would apply to all businesses, as this period must remain the same for all businesses regardless of size. 4. Does the RIAS include a summary of feedback provided by small business during consultations? ☐ ☐ ☑ No individual small businesses were identified during the consultation period and were assumed to be captured through industry stakeholder organizations during the consultations. No individual small businesses were identified during the consultation period and were assumed to be captured through industry stakeholder organizations during the consultations. No individual small businesses were identified during the consultation period and were assumed to be captured through industry stakeholder organizations during the consultations. No individual small businesses were identified during the consultation period and were assumed to be captured through industry stakeholder organizations during the consultations. No individual small businesses were identified during the consultation period and were assumed to be captured through industry stakeholder organizations during the consultations. V Reverse onus Yes No N/A 1. If the recommended option is not the lower-cost option for small business in terms of administrative or compliance costs, is a reasonable justification provided in the RIAS? ☐ ☐ ☑ The flexible options are the lowest-cost option and are recommended to lessen the economic impact for small business. The flexible options are the lowest-cost option and are recommended to lessen the economic impact for small business. The flexible options are the lowest-cost option and are recommended to lessen the economic impact for small business. The flexible options are the lowest-cost option and are recommended to lessen the economic impact for small business. The flexible options are the lowest-cost option and are recommended to lessen the economic impact for small business. Footnote a S.C. 2012, c. 19, s. 414 Footnote b S.C. 2012, c. 19, s. 416 Footnote c R.S., c. F-27 Footnote 1* Reflects 5-year coming into force, day 1 of Regulations is reflected at a 7% discount. Footnote 2* National Farmers’ Market Impact Study, 2009. Agriculture and Agri-Food Canada. Footnote 1 C.R.C., c. 870 Footnote 2 Using the total figure for the five identified disease groups, $26,315,300,000, assumes a percentage reduction in total EBIC. Footnote 3 National Farmers’ Market Impact Study, 2009. Agriculture and Agri-Food Canada.

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