Confusion and non-compliance: One month into new vaping regulations.

Despite federal and provincial regulations, high-nicotine flavoured products with substandard warnings continue to be sold in convenience stores in Ontario. Whether they will be allowed to continue to do so is still not clear.

July 1: New rules come into force

At the beginning of July the rules for selling vaping products changed substantially in Canada's largest province. As of that date:

* Convenience stores and most other retailers in Ontario are banned from selling  vaping products with nicotine concentrations in excess of 20 mg/ml or with flavours other than tobacco. These products can only be legally sold in specialty vape shops.(Section 5 of Ontario Regulation 268/18).  

* All manufacturers and retailers are obliged to ensure products conformed with new federal Vaping Products Labelling and Packaging Regulations. A highly visible component of these regulations is a requirement for minimum size of warnings (around 40% of the principal package surface).

And yet ....

Thirty days after these regulations came into force, they appear to have had little effect in some of the convenience stores closest to Health Canada.

A visit to the three close branches of Canada's largest convenience chain (Circle K) found that non-conforming products were not only available for sale, they were prominently advertised. 

"Vaping bundle $12.99 Includes vaping device and pack of 2 pods. Strawberry / Cucumber / Orange / Mint / Mango / Berry /  Tobacco / Vanilla".

Each of the three large vaping manufacturers (British American Tobacco/Imperial Tobacco Canada; JUUL Labs; JTI-Macdonald) had non-conforming (illegal) products for sale.

* All three manufacturers were distributing products that contained more nicotine than is allowed for sale in Ontario convenience stores (almost 3 times the legal limit)

* All three manufacturers were distributing products that contained flavours that were not allowed for sale in Ontario convenience stores.

* Two of the manufacturers (JUUL, JTI) did not provide the legally-required warnings. Neither company appears to have changed its packaging, either in brick-and-mortar stores or on their retail web-sites. 

Vaping liquids purchased at Circle K
June 29, 2020, Ottawa, Canada 

All of the products contain illegal amounts of nicotine for sale in convenience stores
Two of the products do not have the required health warnings
All of the products have flavours that are not legal for sale in convenience stores

Uncertainties about enforcement  

In simpler times, regulations might have come into force on the date ordered by elected officials. Not so, it seems, with vaping regulations.

Duiring the spring, Ontario convenience store associations which had opposed the regulations were seeking a delay in having to follow them. Among the reasons given were COVID-related difficulties, such as "the new normal of operating during the pandemic and the ongoing need for distancing."

In early July, the convenience industry trade magazine Convenience Central reported that the lobbying efforts for a delay had been successful. Both federal and provincial enforcement officials were reported as having granted a grace period of six months. In the case of the Ontario government, ministry officials had agreed that "Providing more time to implement would allow owners and employees of affected businesses to practice physical distancing.”

Very soon afterwards, the provincial health ministry was somewhat walking back this assurance. As explained in a letter from the Ontario Ministry of Health to retailers, under the Smoke-Free Ontario Act (SFOA) the ministry does not have the authority to direct inspectors on whether or how to lay charges. "SFOA inspectors are provincial offences officers under the Provincial Offences Act and exercise independence in their approach to enforcing the SFOA, 2017."'

Meanwhile, Health Canada had sent its own letter to retailers on June 1. The regulations were coming into force as planned. There would be some gentleness in any enforcement actions, which would focus on guidance and information for the first six months before "progressive compliance" would start in the new year. Nonetheless, business operators were expected to follow the law. "Health Canada calls on the vaping product industry to take feasible actions to comply with existing and upcoming statutory and regulatory requirements that help protect young persons and nonusers of tobacco from exposure to and dependence on nicotine; raise public awareness of the health hazards of using vaping products; and protect the health and safety of Canadians."

So there we have it. Not the get-out-of-jail-free card the retailers wanted. But with no obvious policing, some at least have decided to defy the law.

Will British Columbia be the world's second jurisdiction to require plain packaging of e-cigarettes?

There may be a very important sleeper among the suite of measures to address youth vaping announced by the British Columbia government yesterday. One of the regulations introduced by minister of health Adrian Dix is a requirement that all vaping liquids be sold in plainish packages by mid-September. The regulation does not apply to packaging of the devices, but only on the packages that contain substances that produce a vapour.

Eliquids currently advertised on
Canadian Vape-shop websites

Only one country - Israel - has so far required that e-cigarette liquids be packaged in standardized packaging. Denmark introduced legislation to adopt this measure in January, but study of the bill appears to have been postponed. The Netherlands has plans to require plain packaging for e-cigarettes in 2022.

Short and sweet

This new measure is included in an Order in Council adopted by the B.C. cabinet earlier this week (July 20th OIC 426). Section 8 of the new E-Substances Regulation is clear and precise. In less than 200 words, it prohibits any text or imagery that is not specifically permitted or required under federal or provincial laws. (By comparison, the the federal plain packaging regulations for tobacco products take almost 9,000 words).

Packaging standards 

8 (1) Subject to any enactment of Canada, a retailer must not sell a restricted e-substance unless the product is packaged in a plain manner that does not contain any text or image other than as required or permitted under this section. 

(2) A retailer must not sell a restricted e-substance unless the package

(a) states the concentration of non-therapeutic nicotine in the restricted e-substance,

(b) states the total volume of restricted e-substance within the package or, if the package includes multiple cartridges or containers, the volume of restricted e-substance held or that may be held in each cartridge or container,

(c) states “WARNING: nicotine is highly addictive”, and (d) shows the warning symbol set out in the Schedule. 

(3) A retailer is permitted to sell a restricted e-substance in a package that states one or more of the following: 

(a) the name and contact information of the manufacturer;

(b) the brand name and product name;

(c) the type of product.

A different approach 

The brevity of this regulation results from the different approach taken in British Columbia than by other governments that have implemented plain packaging of tobacco products. Instead of stipulating how products must be packaged, B.C. has chosen to stipulate how they may not appear.

As a result, the impact will be different than the type of plain packaging that is now in force in Canada. There will be no standardized fonts, uniform colour or prescribed package sizes. Vaping liquids will not appear in the same olive-green colour that is now seen on packages littering Canadian streets.

Nonetheless, vaping manufacturers will no longer be able to use their packaging as mini-advertisements for nicotine use. 

Consider, for example, the current packaging for one of the leading products, BAT/Imperial Tobacco's vuse (show above). B.C.'s regulation appears to require the manufacturer to remove the patterned colours and logos, although it is not clear that they would be required to change  the background colour or to stop using distinctive (or attractive) fonts.

As companies lose the ability to put posters in retail stores, transit stations or on billboards, they can be expected to intensify their advertising in the media that remain open to them. This is exactly what happened when traditional promotions for cigarettes were curtailed 20 years ago. The package is one of the most obvious target for them to focus on. 

Learning from history? 

B.C. drafters may have drawn some inspiration from Canada's first federal law prohibiting promotions. The 1988 Tobacco Products Control Act  (s. 9) made it illegal for distributors to sell packages that had textual information other than brand names and trade-marks. The companies found loop-holes around this provision by trademarking a variety of advertising slogans and imagery. 

Sensibly, then, B.C. has not permitted the use of trademarks on packages. With the removal of trademarks on tobacco products now upheld by courts and trade tribunals across the world, they can do this with more confidence than federal regulators had in 1988. 

Canadian trademark 1011844
Tobacco companies trademarked
advertising slogans to circumvent federal
restrictions on promotional packaging

A legal challenge?

In developing this innovative approach, Health Minister Adrian Dix and his cabinet colleagues will have known that a fight with tobacco companies could be on the horizon. B.C. has already spent significant time and money fighting challenges from tobacco companies -- including their pioneering Tobacco Damages and Healthcare Costs Recovery Act and their Testing and Disclosure Regulations.

The regulations are scheduled to be implemented by mid-September. This would make B.C. the second jurisdiction worldwide to prevent text and images from being used as advertising on vaping packages.

British Columbia's new regulations will help protect children and adults from harmful nicotine marketing

Press release

Physicians for a Smoke-Free Canada today welcomed British Columbia's new regulations to protect young people from tobacco and vaping industry marketing.

"Last year Brritish Columbia was the first Canadian jurisdiction to develop a comprehensie strategy to address the youth vaping crisis," said executive Director Cynthia Callard. "The regulatory measures that were advanced today as part of that strategy will help protect young people and others from a harmful and costly addiction to nicotine."

The measures announced by B.C. Health Minister Adrian Dix today will restrict the sale of flavoured vaping products to specialty vape shops, will liimit the amount of nicotine in liquids to 20 mg, and will strengthen controls on promotion and packaging. The regulations complement and are embedded in a comprehensive cross-government approach developed by the province and involving youth and other government departments.

"British Columbia is intoducing regulatory controls which are considered urgent by public health researchers and community experts," said Ms. Callard. "Reducing the concentration of nicotine is expected to dampen the addictiveness to new users and reducing access to flavoured products is expected to reduce the impulse sales which entrap so many young people. The new provincial packaging and advertising restrictions strengthen the federal approach."

Ten years ago Canadian provinces and the federal government moved to remove flavours from tobacco products. One of the key lessons from this experience was the importance of prohibiting the sale of menthol and mint-flavoured tobacco products. British Columbia's decision to treat menthol equitably with other flavours is in keeping with best practices for flavour regulations.

The organization is encouraging governments to ban all vaping flavours other than tobacco flavours. "Flavours like strawberry and mango do more than trigger the impulse to use such products," explained Ms. Callard. "They also create a misleading impression of the harmfulness of this drug. It is harder to understand that something is dangerous when it tastes like fruit."

British Columbians of all ages will benefit from these regulations: Fewer young people will be encouraged to try a drug which historically traps one-third of its users in long-term addiction; Smokers who use e-cigarettes in their quit attempts are less likely to become long-term e-cigarette users; Former smokers are less likely to be re-recruited to nicotine use.

Current evidence supports governments adopting even strictter restrictions on the vaping market. "Today's announcement reflects the growing understanding that regulatory controls on the vaping market need to be reviewed. Research published since the vaping market was liberalized in 2018 increasingly cautions that there will be severe long term health consequences from using these products and that the current marketing of these products is driving up youth use while doing little to reduce conventional smoking by adults."

Earlier this month, federal Health Minister Patty Hajdu announced final regulations to restrict advertising for vaping products in Canada to places where young people do not have access, and indicated that she is also looking at reducing the amount of nicotine or flavours allowed in vaping products.

"It is reassuring that even in the midst of the COVID-19 crisis, many health ministers across Canada are giving priority to protecting young people from vaping nicotine. We urge them to work collectively to address the remaining weaknesses in public health controls."

- 30 -

Background
Fact sheet on provincial restrictions on vaping product promotions and use. Updated July 2020.

Five large Canadian public pension plans have said "no" to tobacco investments.

For most Canadian workers, ten and a half cents on every pay-cheque dollar is deducted as a contribution to our national public pension program. Workers in Quebec contribute to the Quebec Pension Plan, and their contributions are invested by the Caisse de Dépot et placement du Québec (the Caisse). In all other provinces, workers must contribute to the Canada Pension Plan, the funds for which are managed by the CPP Investment Board (CPPIB). 

The Quebec government owns the Caisse and the CPPIB is owned by the federal government, which has an obligation to consult with finance ministers from the other 9 provincial governments on how it is governed. 

Although these pensions were established in the mid 1960s, it was only 20 years ago that governments began investing pension contributions. Prior to 1999, pension payments to retired workers were financed with the deductions received from those who were still working. Today these two government-owned funds have more than three-quarters of a trillion dollars to invest. 

These universal pension programs are not the only government-controlled pension investments. In addition to the CPP/QPP, governments own or regulate the pension funds for public sector workers, including federal and provincial civil servants, teachers, municipal workers and others. While the day to day operations (and investment decisions) are generally managed at arms' length, governments ultimately have direct or shared responsbility for the management of these funds.

Most public pensions in Canada  including the CPPIB, the Caisse and the pension of public servants in most provinces - have opted to include tobacco industry shares as part of their stock-market portfolios. Nonetheless, five public pension funds in Canada have made the important decision to screen out any tobacco investments when deciding how to invest the money entrusted to them. 

This blog and the accompanying fact sheet review the tobacco-related policies and practices of the pension fund managers who decide how these pension funds are invested. 

A long-standing call for Canadian pension contributors to get out of the tobacco business 

For many years, governments and private investors have been encouraged by health leaders to stop investing in tobacco companies. Since the early 2000s, medical associations, health charities and tobacco-control organizations in Canada have called on federal and provincial governments to divest of tobacco stocks, in keeping with guidelines for implementing the Framework Convention on Tobacco Control.

Despite this, with the notable exception of Alberta, governments have not consistently accepted responsibility for ensuring that the money under their stewardship is not invested in tobacco.  While the funds have adopted responsible investment policies, the ones most of them use (integrating environmental, social, and governance factors into decision making or engaging with companies through shareholder motions) are ill-suited for protecting governments from being active participants in the damage caused by tobacco.

Canadian public pension funds which do not exclude tobacco. 

 

Nonetheless, one-third of institutional investors recently surveyed screened their investments to ensure that they did not acquire tobacco shares. Among them were 5 of Canada’s largest public pension funds - the Alberta Investment Management Corp (which decided to divest of tobacco in 2011), the OPSEU Pension Trust (since 2017), the Ontario Teachers Pension Plan (since 2018), the Ontario Municipal Employees Retirement System (since 2019) and the Healthcare of Ontario Pension Plan (since 2019).

Canadian Public Pension Funds which exclude tobacco from investments.

 

A global movement for Tobacco Free Portfolios

The recent decision of some pension funds can be tied with a global push supported by international health and development agencies. 

More recently, the Director General of the World Health Organization has called on governments to ensure the money under their control is tobacco-free, and has endorsed a global campaign to achieve this objective. 

The Tobacco-Free Finance pledge is sponsored by the United Nations Environmental Program Finance Initiative . The 140 signatures to the pledge include some of the world's largest investors, collectively managing about USD $11 trillion in assets.

Among these principled investors are governments like New Zealand and Norway, which moved away from tobacco more than a decade ago. Government pensions in the Netherlands and in France are also tobacco-free, as is the United Nations Joint Staff Pension Fund.

Canadian institutional investors which have taken this pledge include the Canadian Medical Protective Association, the Desjardins Group and McGill University. These are in addition to other private pension investors which have ceased investing in tobacco but which do not participate in the Tobacco Free Portfolio pledge. Examples include the investment arm of the Canadian Medical Association (MD Management, now owned by Scotiabank) and the University of Toronto.

Reasons for Canadian governments to instruct pension investors to screen out tobacco industry shares. *  Tobacco products fail product safety and ethics tests. There is no safe level of consumption of tobacco. When used as intended, tobacco will have contributed to the early death of the majority of smokers, more than 45,000 Canadians each year.  Canada is a party to a UN Treaty which calls for divestment. Canada ratified the Framework Convention on Tobacco Control in 2004. Among the obligations in this treaty is the need to protect tobacco control policies from the vested interests of the tobacco industry. In 2008, Canada supported the adoption of guidelines which call for parties not to invest in the tobacco industry.  Partial ownership cannot be effective in addressing harms caused by the industry The World Health Organization has made clear that engaging with the tobacco industry conflicts with UN principles and values. Other responsible investment strategies are ineffective. Tobacco companies are poor prospect for effective use of ESG integration, norms-based screening or investor engagement, as there is an inherent conflict between the sustainability of the business and government’s obligations to protect health.  There is no financial penalty to divesting.  Pension funds can continue to perform as well without tobacco industry investments.   * modeled on New Zealand Superannuation Fund decision in 2007.

Updated estimates of the burden of tobacco use

Yesterday the Canadian Centre on Substance Use and Addiction and the Canadian Institute for Substance Use Research released updated estimates of the economic and health burden that result from substance abuse. 

They provide the update in two useful versions: a report "Canadian Substance Use Costs and Harms 2015-2017"  and a data visualization tool.

Their study is a useful reminder that despite falling smoking rates, tobacco is the drug that is the biggest driver of health care costs and death.

Deaths from legal drugs eclipse those from illegal drugs.

This study estimates that in 2017, tobacco caused 6 in 10 deaths associated with substance abuse and alcohol caused an additional 1 in 4. Opioids were responsible for 1 in 15 substance-use related deaths. (Because illicit drugs tend to kill at a younger age, they were however associated with a greater number of potential yeras of productive life lost.)

Canadian Substance Use Costs and Harms 2015-2017 CCSA 

Legal drugs drive health care costs

Healthcare costs from substance use exceeded $13 billion in 2017 -- with about half caused by smoking. These costs included inpatient hospitalizations, day surgeries, emergency department visits, specialized treatment for SU disorders, physician time and prescription drugs (and were not able to include some costs for Quebec).

Canadian Substance Use Costs and Harms 2015-2017 CCSA 

There were no criminal justice costs associated with tobacco 

Those concerned that Canada's policing system is not actively engaged with trying to reduce contraband cigarette sales will not be comforted by this study's estimates that the criminal justice system spent no money policing offences related to tobacco. (Selling contraband tobacco has been a Criminal Code offence since 2014.)

Canadian Substance Use Costs and Harms 2015-2017 CCSA 

Tobacco control does not receive a proportionate share of prevention investments.

The study also included "other direct costs" associated with substance abuse. Among these were federal funding for research and prevention. obacco use may cause more than half the deaths and half the health-care costs, but it received less than one-quarter of federal investment in prevention and research.

Canadian Substance Use Costs and Harms 

Different methods - and different data sources - will produce different results

In this study, the authors based their calculations on smoking rates produced by the (now-defunct) Canadian Tobacco Alcohol and Drug Survey (13% in 2017). Had they used estimates produced by the Canadian Community Health Survey (16% in 2017), they would have included the costs related to an additional 1 million smokers.

Three years ago the Conference Board of Canada produced estimates of "The Costs of Tobacco Use in Canada" for 2012. They similarly found a $6 billion cost for direct health care costs, but their estimate for costs related to lost productivity were much higher ($9 billion vs. $6 billion).

A Canada Day holiday - and the start date for several tobacco control regulations.

Health Authorities have a tendency to use the first days of January and July as the moment when regulations come into force. And so it is that this week a number of changes to the tobacco and vaping regulations are taking effect.

Federal: Mandatory health warnings replace voluntary warnings on vaping packages

Last December, Health Canada published the final version of the Vaping Products Labelling and Packaging Regulations SOR/2019-353.  These regulations were made under the authority of two federal laws -- the Tobacco and Vaping Products Act and the Canadian Consumer Product Safety Act. 

The Regulations set out the requirements in two parts: labelling requirements pursuant to the TVPA, and labelling and child-resistant container requirements pursuant to the CCPSA. The labelling requirements include a list of ingredients and, for products containing nicotine, a health warning that nicotine is highly addictive, the concentration of nicotine, and warnings regarding the toxicity of nicotine when ingested. In addition, the Regulations set out expressions that may be used on the product or package to indicate when a vaping product is without nicotine. The Regulations also require refillable vaping products, including devices and their parts, to be child-resistant.

With these new regulations, vaping products are now required to carry warnings that cover 40% of the principal display panel and an even greater percentage on small packages. Only one warning on addiction is required, even though the companies had previously included voluntary warnings on general health effects. 

The impact of the new regulation and package redesign are on BAT's vaping brand is shown below. 

These new warnings may not be immediately visible to Canadian consumers. Health Canada is reported to have agreed to the request of convenience stores to delay enforcement of the regulations until January 1, 2021. 

Provincial:  Ontario moves flavoured and high-nicotine vaping products out of convenience stores.

In late February, the Ontario government announced that it would remove flavoured and high-nicotine vaping products from convenience stores and gas stations and permit their sale only in specialty vape shops. Ordinary stores would still be allowed to sell tobacco- and mint/menthol- flavoured vaping products, and vaping liquids that have less than 20 mg/ml concentratiaon of nicotine.

 The original implementation date of May 1st, however, was delayed by two months to July 1st in response to concerns of convenience retailers that this would increase the risk of COVID transmission.

The Ontario government resisted pressure to further delay implementation of this new rule, but it too has agreed to give the industry a 6 month grace period before taking any enforcement actions. The Convenience Industry Council claimed that implementation required  "a massive inventory change during the COVID crisis and the potential impacts on the health of our frontline workers". 

Provincial: Nova Scotia requires e-cigarette vendors to be licensed.

On Canada Day, Nova Scotia's new requirements for retail and wholesale vendor permits for e-cigarettes comes into force. The three-year permits cost $124, but require permit holders to provide some business information  that could be useful for public health monitoring.

Municipal: Edmonton's ban on shisha bars comes into force

When amending its smoking bylaw last year, Edmonton City Council accepted a one-year delay before imposing restrictions on Hookah bars/Shisha lounges. These regulations will come into force this July 1st. 

Some International measures: 

On July 1st, New York City ban on the sale of flavoured cigarettes comes into force. This city law was originally signed in December 2019. Because it was superseded by a similar law passed by the State legislature as part of its 2020 budget, which came into effect mid-May, the ban is already in effect.  Other NY state changes which come into force on July 1st include a ban on on-line sales, ads near schools and reporting requirements for manufacturers and distributors. (See page 191 and later of the Budget Bill S7506B). Quebec is the only Canadian jurisdiction to ban on-line sales. Health Canada intends to impose reporting requirements on vaping manufacturers, but has not yet indicated what they will be.

This week the Netherlands extends its ban on public smoking to e-cigarettes. Retail displays are also banned at supermarkets (the measure will affect other retailers, but not specialty tobacconists and kiosks at the end of the year). 

 

Regulatory round-up

The above are but a few of the many regulatory developments. To keep track of these, two information products have been updated:

* Timeline of selected regulatory actions on electronic nicotine devices

* At-a-glance: Provincial restrictions on vaping products