Recent Parliamentary decisions affecting tobacco

This post reports on the recent progress through Parliament of three pieces of federal tobacco-related legislation -  and the additional steps that are required if they are to benefit public health.

SUPPLEMENTARY RULES ON THERAPEUTIC PRODUCTS
Budget Bill gives Health Minister authority to impose post-market rules

On June 20th, Royal Assent was given to a 668-page law which implemented measures linked to the 2024 Budget. C-69, the Budget Implementation Act 2024 included three short paragraphs which could be the foundation for addressing concerns with BAT/ITL's Zonnic nicotine pouches. 

Supplementary rules — therapeutic product
30.‍01 (1) Subject to any regulations made under paragraph 30(1)‍(j.‍1) and if the Minister believes on reasonable grounds that the use of a therapeutic product, other than the intended use, may present a risk of injury to health, the Minister may, by order, establish rules in respect of the importation, sale, conditions of sale, advertising, manufacture, preparation, preservation, packaging, labelling, storage or testing of the therapeutic product for the purpose of preventing, managing or controlling the risk of injury to health.

Promotion
(2) For greater certainty, the Minister may, in the order, establish rules for the purpose of preventing the therapeutic product from being promoted for a use, other than the intended use, of a therapeutic product or preventing a use, other than the intended use, of a therapeutic product from being appealing.

Uncertainty
(3) The Minister may make the order despite any uncertainty respecting the risk of injury to health that the use of the therapeutic product, other than the intended use, may present.

In May Health Canada briefed interested parties on the path forward, indicating that the initial use of this new power would be to curtail ways in which nicotine pouches were being marketed and supplied, but that any such order would be preceded by a consultation. They also indicated that a more general guide to these new authorities would be published "shortly" after the law was adopted. 

Although the authority for supplementary rules applies to all therapeutic products -- including the multi-billion dollar market for prescription and over-the-counter drugs - the only public opposition to date has been from Imperial Tobacco (as articulated in its brief to Parliament and news releases), its allies in the convenience store industry, and its supporters in libertarian agencies. How the hundreds of producers of other affected products view this new power is not yet known. 

What does this mean for tobacco control?  

Health Canada should be applauded for its use of an efficient legislative process (the Budget Bill) to respond to concerns about the public health risks of nicotine pouches. For this new legislative authority take effect, however, the department will need to prepare and enforce an 'order' with better rules to direct pouch sales. 

The ball is now in the opposition parties' hands. If they continue to support Bill C-368 (see below), this measure will be undone.

A REGULATORY CARVE-OUT FOR NATURAL HEALTH PRODUCTS

Opposition parties voted to exempt vitamins, homeopathy, herbal cures and nicotine products from post-market controls

On May 29th, the House of Commons voted to approve in principle Bill C-368 An Act to amend the Food and Drugs Act (natural health products). 

The sole objective of this short bill is to exclude "Natural Health Products" from the measures that apply to "therapeutic products" in the Foods and Drugs Act. In effect, C-368 will reverse the changes made in the 2023 Budget Implementation Bill, when these products were put under post-market regulation and subject to Vanessa's Law after the Auditor-General criticized the inadequate regulation of these self-care goods. 

Natural Health Products are defined by regulation to include plants, plant extracts, many vitamins, homeopathic and traditional medicines when these are sold for therapeutic use (cannabis is excluded). As a result, NRT are authorized by the same system that decides whether and how products as diverse as Ayurvedic medicine, toothpaste, homeopathic treatments, vitamins and traditional medications ("little dragon pills") can be marketed. 

For decades, public and industry resistance to evidence-based regulations on Natural Health Products has been loud and sustained. Parliamentarians have reportedly been "inundated" with letters from constituents calling for continued exclusion of this category of product from this post-market regulatory oversight. This grass-roots support for often-questionable therapies overshadows support for regulation from the small number of health experts who are willing to speak in favour of regulation. 

At the second reading vote on C-368  all Opposition parties stood in support: the bill was passed by a vote of 171 to 146. It has now been referred to the Standing Committee on Health, which is currently inviting submissions and which is expected to hold hearings in the early fall. 

What does this mean for tobacco control?  

Unless one of the larger opposition parties changes its position on C-386, Health Canada will lose its new authority to curtail the marketing of nicotine pouches.

TOBACCO COST RECOVERY
Legislative authority is a key milestone, but the finish line is still in the distance.

On June 19, Royal Assent was given to Bill C-59 (Fall Economic Statement Implementation Act 2023). Included in this 546-page law were 3 pages of text which give Health Canada the authority to charge tobacco companies for "the costs incurred by His Majesty in right of Canada in relation to the carrying out of the purpose of this Act, including regulations."

This authority is an important milestone in requiring tobacco companies to carry the financial burden of regulating their products -- but we are still far from the finish line.

The next step for the federal department is to establish the regulations that will be used to collect regulatory fees. Based on information provided by the department, it will be 2027 before these are in place. In its May 2024 Forward Regulatory Plan, Health Canada suggests that consultations will not be held until the spring of 2025. In December 2023, it told tobacco and vaping companies that regulations would take 18 months after consultation period. 

If history is a guide, this timeline is optimistic. Tobacco and vaping regulations adopted by Health Canada over the past decade have taken an average of 4 years to go from appearance on the Forward Regulatory Plan to finalization. One in 5 of these proposals have fallen by the wayside, and have been dropped from the plan.

There are also uncertainties about how much money the department will be able to collect or whether the fee will strengthen the work of the federal government. Although the law permits the recovery of costs related to both tobacco and vaping, the department has told the companies that it has no current plans to recovery costs of managing the vaping market. The department's budget for tobacco and vaping is $66 million per year, and many individuals work on both vaping and tobacco. How the department will conduct a cost-allocation exercise that will survive a tobacco industry-challenge has not been made public. 

What does this mean for tobacco control?  

The passage of C-59 begins the process of imposing a charge on tobacco companies, which may take a few years to be put in place. Although implementing this measure will impose significant staff costs on Health Canada, it will not increase the department's budget for tobacco control or expand its program activities. 

HIGHER TAXES ON TOBACCO AND VAPING PRODUCTS
Despite taxes, companies are keeping prices kid-friendly

Bill C-69 also formalized the increases to federal excise taxes on tobacco products (which took effect on April 17) and on vaping products (which took effect on July 1st). Despite the tax on e-cigarettes more than doubling in the four provinces which also began collecting the tax on July 1st, manufacturers have managed to keep prices low even on their own direct-to-consumer sales: 

* Imperial Tobacco/BAT's VUSE website sells at the same price in Ontario today as it did before the additional $1.24/2ml tax came into effect.

* Philip Morris sells its 2 ml Veev at $7 today - compared with $11 last October. It has introduced a 5 ml version which it now sells for $11. 

As reported here earlier, the cost of using nicotine continues to fall, despite excise tax increases. Health Canada has the authority to impose minimal pricing, but has not yet indicated an interest in doing so.

What does this mean for tobacco control?  

Federal and provincial finance ministries have established a system to coordinate and collect taxes on vaping products. Vaping manufacturers have adjusted their pricing so that these taxes are not being passed on to consumers, and the price of nicotine continues to fall. Until health ministries address the impact of pricing on use, advances in tax policy may not have a health benefit.