Vaping Products Reporting Regulations: SOR/2023-123

Canada Gazette, Part II, Volume 157, Number 13

Registration
SOR/2023-123 June 9, 2023

TOBACCO AND VAPING PRODUCTS ACT

P.C. 2023-553 June 9, 2023

Her Excellency the Governor General in Council, on the recommendation of the Minister of Mental Health and Addictions and Associate Minister of Health, makes the annexed Vaping Products Reporting Regulations under section 7.8footnote a of the Tobacco and Vaping Products Act footnote b.

Vaping Products Reporting Regulations

Definitions

Definitions

1 The following definitions apply in these Regulations.

Act
means the Tobacco and Vaping Products Act. (Loi)
assortment
means a package that contains
  • (a) two or more of the types of vaping products referred to in subsection 2(1); or
  • (b) two or more brands of vaping products of the same type, but with different characteristics, such as different flavours or nicotine concentrations. (assortiment)
civic address
means
  • (a) for an address in Canada, the unit number, civic number, street name, municipality name, province name and postal code; and
  • (b) for an address outside Canada, the unit number, civic number, street name, municipality name, province or state name, postal or ZIP code and country name. (adresse municipale)
GTIN
means the Global Trade Item Number assigned by GS1 to a brand of vaping product or brand of assortment. (GTIN)
manufacturer
does not include an individual or entity that only packages, labels or distributes vaping products on behalf of a manufacturer. (fabricant)
net sales
means the value of a manufacturer’s sales of a vaping product or assortment during a specified period minus the value of any returns of that vaping product or assortment to the manufacturer during the same period. (ventes nettes)
net volume
means the volume of a vaping substance sold by a manufacturer during a specified period minus the volume of any returns of that vaping substance to the manufacturer during the same period. (volume net)
unique product identifier,
in relation to a brand of vaping product or brand of assortment, means
  • (a) the GTIN; or
  • (b) the alphanumeric code referred to in subsection 3(3). (identifiant de produit unique)
vaping device
has the meaning assigned by paragraphs (a) and (b) of the definition vaping product in section 2 of the Act. (dispositif de vapotage)
vaping part
has the meaning assigned by paragraph (c) of the definition vaping product in section 2 of the Act. (pièce de vapotage)
vaping substance
has the meaning assigned by paragraph (d) of the definition vaping product in section 2 of the Act. (substance de vapotage)

Application

Retail sale

2 (1) These Regulations apply to the following types of vaping products that are intended for retail sale:

Assortments

(2) These Regulations also apply to assortments that are intended for retail sale.

Non-application

(3) These Regulations do not apply to a vaping product or assortment that is the subject of an authorization, including a licence, issued under the Food and Drugs Act authorizing its sale or to an assortment that includes a vaping product that has been issued such an authorization.

Reports

General Requirements

Information

3 (1) These Regulations prescribe the information that manufacturers of vaping products must submit to the Minister, as well as the form and manner in which the information is to be submitted.

Content of reports

(2) In addition to the information required for each type of report set out in these Regulations, every report must contain the following:

Unique product identifier

(3) For each brand of vaping product or brand of assortment that does not have a GTIN, the manufacturer must create an alphanumeric code of no more than 10 characters that will serve as the unique product identifier for that brand.

Language

(4) The information in the reports must be in English or French.

Report on Sales

Brands of vaping products

4 (1) The report on sales must contain the following information for each brand of vaping product, other than a brand of vaping product contained in an assortment, that a manufacturer sells during the period covered by the report:

Sales — vaping products

(2) The report on sales must contain the following information with respect to sales made by the manufacturer and returns made to the manufacturer during the period covered by the report, for each brand of vaping product:

Brands of assortments

(3) The report on sales must contain the following information with respect to sales of assortments made by the manufacturer during the period covered by the report:

Sales — assortments

(4) The report on sales must contain the following information with respect to sales made by the manufacturer and returns made to the manufacturer during the period covered by the report, for each brand of assortment:

Time limit — initial report

(5) The initial report on sales must be submitted within the time limit set out in subsection (6) for the first complete period after the day on which these Regulations come into force.

Time limit — report on sales

(6) The report on sales must be submitted

Report on Ingredients

Brand information

5 (1) The report on ingredients must contain the following information for each brand of vaping product that a manufacturer sells in Canada, including a brand of vaping product contained in an assortment, if the vaping product is of a type referred to in any of paragraphs 2(1)(c) to (e):

Ingredient information

(2) The report on ingredients must contain the following information for each ingredient that is used in the manufacture of the vaping substance:

More than one substance in ingredient

(3) If more than one substance was used in the manufacture of any ingredient

Exception — export

(4) The report on ingredients is not required for a brand of vaping product if the vaping product, or an assortment that contains it, is manufactured solely for export.

Identical vaping substance

(5) In the case of a vaping substance that is identical to that contained in another brand of vaping product for which a report on ingredients is submitted, the manufacturer may submit a report on ingredients that does not include the information referred to in subsections (2) and (3) if it includes the information referred to in subsection (1) for both brands of the vaping product.

Definition of identical

(6) For the purposes of subsection (5), identical, in relation to a vaping substance, means the vaping substance contains the same ingredients in the same concentrations as a vaping substance contained in another brand of vaping product, including a brand of vaping product contained in an assortment.

Time limit — report on ingredients

(7) The report on ingredients must be submitted on or before the day on which the manufacturer first sells a brand of vaping product, including a brand of vaping product contained in an assortment, that was not included in a previous report on ingredients.

Electronic Submission

Reporting by manufacturer

6 (1) The manufacturer must submit the report on sales and the report on ingredients using the following forms established by the Minister and attaching the forms to an email:

Information submitted by supplier

(2) An ingredient supplier who submits information on the manufacturer’s behalf under paragraph 5(3)(b) may do so using the form established by the Minister entitled Supplemental Ingredients Report for Vaping Products (Suppliers) – Ingredients with More than One Substance, as amended from time to time, and attaching the form to an email.

Change to Ingredient Information

Notification of change

7 If there are changes to the information referred to in subsection 5(2) after the report on ingredients is submitted, the manufacturer must submit a notification of change that meets the following requirements:

Transitional Provision

Report — December 31, 2023

8 A manufacturer must submit, on or before December 31, 2023, a report on ingredients that contains the information referred to in subsections 5(1) to (3) with respect to each brand of vaping product, including a brand of vaping product contained in an assortment, that the manufacturer sells during the period beginning on the day on which these Regulations come into force and ending on December 31, 2023.

Coming into Force

Registration

9 These Regulations come into force on the day on which they are registered.

SCHEDULE

(Clauses 4(1)(f)(ii)(A) and (B) and subparagraphs 5(1)(e)(i) and (ii))

Flavours
Item Flavour
1 Tobacco
2 Fruit
3 Mint/Menthol
4 Alcohol
5 Nut
6 Coffee/Tea
7 Spice

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

In 2018, Parliament amended the Tobacco Act, the Canada Consumer Product Safety Act (CCPSA) and the Food and Drugs Act (FDA) to address the harms and potential benefits of vaping products. The amendments to the Tobacco Act included new provisions to regulate the manufacture, sale, labelling and promotion of vaping products, as well as a name change to the Tobacco and Vaping Products Act (TVPA).

The availability of information in the public domain about vaping products is limited. The vaping market is evolving rapidly with the constant introduction of new vaping product technologies and novel product characteristics. Health Canada needs timely access to a variety of data to better understand the impact of vaping product use on the health and safety of Canadians. More specifically, access to relevant information (especially information that is not publicly available) about the vaping product market and their contents is needed to inform the development of regulations to support the purpose of the TVPA, which includes preventing vaping product use from leading to the use of tobacco products by young persons and non-users of tobacco products. Such data is also needed to help advance policies and programs that further the objectives of Canada’s Tobacco Strategy (CTS), including helping people who smoke to quit tobacco and protecting youth and non-users of tobacco products from nicotine addiction.

Background

Canada’s Tobacco Strategy

Tobacco use is the leading preventable cause of disease and premature death in Canada. It is a known or probable cause of more than 40 debilitating and often fatal diseases of the lungs, heart, and other organs, and is responsible for approximately 48 000 premature deaths every year in Canada. Tobacco products contain nicotine, a highly addictive substance that is responsible for tobacco dependence and consequent repeated long-term use resulting in chronic exposure to harmful chemicals. Health and economic costs associated with tobacco use in Canada were estimated at $12.3 billion for the year 2017.

The CTS features broad, population-based approaches to achieve the ambitious target of less than 5% tobacco use prevalence by 2035. The Strategy also recognizes that targeted approaches are needed to reach specific populations with high levels of tobacco use. The main themes of the CTS include helping Canadians quit smoking and protecting youth and non-tobacco users from nicotine addiction.

Health Canada has collected information on tobacco products since 1989 pursuant to the former Tobacco Products Control Regulations and since 2000, under the Tobacco Reporting Regulations (TRR). The TRR establish requirements for reporting of information on sales, manufacturing processes, ingredients, constituents, emissions, research and development activities, as well as promotional activities by tobacco manufacturers.footnote 1

Information collected pursuant to the TRR, has been used to inform policy decisions and has helped implement effective tobacco control strategies to protect the health of Canadians. For example, ingredients data informed tobacco product regulation, especially regarding additives including flavours that appeal to youth. Health Canada also relies on tobacco product sales data to evaluate the impact of tobacco control measures and to identify emerging tobacco use trends.

The TRR support the Government of Canada’s approach to tobacco control and the goals of the CTS by providing Health Canada with timely and relevant information about tobacco products.

Vaping products are not subject to the TRR.

Vaping — new legislative framework

In 2015, the House of Commons’ Standing Committee on Health tabled its report Vaping: Toward a Regulatory Framework for E-Cigarettes. Parliament responded to the report with a new legislative framework, former Bill S-5, An Act to amend the Tobacco Act and the Non-smokers’ Health Act and to make consequential amendments to other Acts, which received royal assent on May 23, 2018. As a result, vaping products are subject to the TVPA and either the FDA or the CCPSA, depending on whether the product is marketed for therapeutic use. The TVPA applies to vaping products, including those regulated under the CCPSA and FDA, except where they are expressly excluded from the TVPA (e.g. Regulations Excluding Certain Vaping Products Regulated Under the Food and Drugs Act from the Application of the Tobacco and Vaping Products Act). Vaping products containing cannabis are also excluded from the application of the TVPA as they are regulated under the Cannabis Act.

Regarding vaping products, one of the overall objectives of the TVPA is to prevent vaping product use from leading to the use of tobacco products by young persons and non-users of tobacco products. Specifically, it aims to

Vaping products include vaping devices, vaping parts and vaping substances. Most vaping devices consist of parts such as a battery, a heating element, a tank or reservoir, and a mouthpiece. Vaping substances are generally composed of propylene glycol and/or glycerol (sometimes referred to as vegetable glycerin), flavouring ingredients and nicotine. Vaping devices work by heating a vaping substance or mixture of substances to form an aerosol that is inhaled by the user.

In keeping with the objectives of the TVPA, and in light of the rise in youth vaping from 2017 to 2019,footnote 2 Health Canada developed a comprehensive suite of regulatory initiatives to address youth vaping, including

Vaping product information

There has been a rise in the popularity of vaping products since they became commercially available in 2006. Vaping product technology continues to evolve and there have been many changes to vaping device designs since their introduction. Vaping product designs include refillable and non-refillable cartridges and pods, customizable configurations, and devices with variable power settings. A large number of vaping substances are available in Canada and new formulations are continually being introduced with new flavours and different forms of nicotine such as nicotine salts.

Health Canada has made significant investments in population-level surveys, market and public opinion research to better understand vaping trends. This includes the purchase of sales data from third parties specializing in market research data. While informative, the sales data is limited to a sample of vaping product sales at the retail level (not wholesale data from manufacturers), which can be used to project market size. In addition, the purchased sales data does not provide information on the characteristics of vaping products sold (such as flavour and nicotine concentration). To determine the contents of vaping products, Health Canada has undertaken laboratory analysis of selected vaping products to characterize their chemical contents and analyze their emissions. Vaping product manufacturers do not publicly release ingredients data and it cannot be purchased from external sources. The dynamic and changing nature of the vaping market makes it difficult to get an accurate picture of market changes.

Objective

The Vaping Products Reporting Regulations (the Regulations) will provide Health Canada with vaping product-related information to help better understand the impact of these products and further the objectives of the TVPA. One of these objectives is to prevent vaping product use from leading to the use of tobacco products by young persons and non-users of tobacco products.

The Regulations will provide Health Canada with access to additional information, some of which can only be obtained from vaping product manufacturers, which will supplement Health Canada’s ongoing research and data collection activities. In particular, the additional information will be used together with other information that Health Canada collects to

The Regulations will also help further the objectives of the CTS, which include helping people who smoke to quit tobacco and protecting youth and non-tobacco users from nicotine addiction.

Description

Subsection 7.3(1) of the TVPA requires manufacturers to submit information that is required by the Regulations to the Minister, in the form, manner and time specified by the Regulations. The required information pertains to vaping products, their emissions and any research and development related to vaping products and their emissions, regardless of whether the vaping products are for sale.

The Regulations require manufacturers of vaping products to provide the Minister with information on their vaping product sales and ingredients. Retailers are not required to report information unless they “manufacture” vaping products, as per the definition set out in the TVPA. The Regulations do not apply to vaping products and assortmentsfootnote 3 that are subject to an authorization, including a licence, issued under the FDA.

The Regulations require manufacturers to submit the following documentation.

Report on sales

This report contains information on sales of vaping products by brand sold in Canada and for export.

The initial sales report is required within a month after the first complete semi-annual (six-month) reporting period after the coming into force of the Regulations. Thereafter, sales reports are required semi-annually and must be submitted on or before the last day of the month following each semi-annual reporting period, e.g. January 1 to June 30 and July 1 to December 31.

The sales report is required for the following vaping product types:

The sales reports required for vaping parts that do not contain a vaping substance are limited to the following vaping parts:

Manufacturers are also required to submit information for each brand of assortment that is sold in Canada and for export. An assortment is defined as a package that contains two or more of the types of vaping product referred to above or two or more brands of vaping product of the same type with different characteristics such as flavour or nicotine concentration.

This report includes the following information for each brand:

Sales must be broken down by province/territory and for the whole of Canada. Sales of exported vaping products are also required and must be broken down by country of export.

Report on ingredients

This report contains information on the ingredients of vaping substances by brand sold in Canada.

A first ingredients report must be submitted on or before December 31, 2023, which is approximately six months after the coming into force of the Regulations. Thereafter, an ingredients report is required on or before the day that a manufacturer first sells a brand that was not included in a previous report on ingredients. In addition, whenever there is a change to the ingredient information previously submitted in an ingredients report for a vaping substance, the manufacturer must notify Health Canada. The notification does not need to identify the actual change made to the ingredient information. The notification must be submitted on or before the day the manufacturer sells the product that was manufactured in accordance with the change to which the notification pertains. Should the Department need to know the actual change made to the ingredients information, Health Canada would request supplementary information pursuant to subsection 7.3(2) of the TVPA.

An ingredients report is required for the following vaping product types:

This report is also required for each of those types of vaping products contained in an assortment.

Ingredient information must include the concentration of each ingredient and substance used to make a vaping product substance. If any substance is made of more than one substance, information on each of those substances must be submitted. If the ingredient is nicotine, an indication of whether the nicotine is natural or synthetic, or a mixture of both, is required. Manufacturers that do not know the contents of their ingredients or substances will have to contact their suppliers for the information and include it in their report. Alternatively, manufacturers can have their suppliers provide the required information directly to Health Canada, on their behalf. In such cases, Health Canada expects to be informed by the manufacturer of this alternative arrangement with their suppliers.

For both sales and ingredients reports, manufacturers are required to include

Electronic submission

The sales and ingredients information is submitted to Health Canada in an electronic format. Manufacturers are required to use the forms established by the Minister that are incorporated by reference in the Regulations. The forms must be used as provided, without any modification to their format, except as indicated in the form. The required use of electronic forms is expected to assist manufacturers in providing the information in a consistent manner and to help Health Canada process the information received. An ingredient supplier who submits information on the manufacturer’s behalf may do so using the form established by the Minister. The following four forms are incorporated by reference in the Regulations and may be amended from time to time:

These forms are available and can be requested by sending an email to the following address: vprr-rrrpv@hc-sc.gc.ca. The manufacturer must submit the completed forms by attaching them to an email sent to the following address: vprr-rrrpv@hc-sc.gc.ca. If any of the forms are amended by Health Canada, the Department will notify and distribute the new electronic forms to vaping manufacturers and provide them with sufficient time to prepare the information to be submitted. The manufacturer must ensure that the latest forms are used.

Regulatory development

Consultation

Health Canada published a consultation document, [ARCHIVED] Proposals for the Regulation of Vaping Products, on August 25, 2017, setting out proposals to regulate vaping products in Canada. It provided a 60-day comment period that closed on October 27, 2017. The document proposed ten separate measures to regulate vaping products under the TVPA. Of the ten measures proposed, Proposal #5 set out information that could be required for vaping products.

Table 1: PROPOSAL 5 — Health Canada proposes manufacturers be required to report the information set out below at the frequency specified
INFORMATION FREQUENCY
The name of the business and contact person Annually
Details about each vaping device or liquid, including the product name, model number and nicotine concentration Upon introduction of each product, and annually thereafter
Details about the design of each vaping device, including engineering drawings and information about the materials and components used Upon introduction of each product, and annually thereafter
Contents of vaping liquids, including quantities of each ingredient Upon introduction of each product, and annually thereafter
Information on research and development activities Annually
Information on promotional activities Annually
Sales data for each product Quarterly

A total of 105 comments were received across nine stakeholder groups: academics; the general public; other levels of government (municipal, provincial and territorial); the health products industry; the vaping industry; the tobacco industry; non-governmental organizations (NGOs); public health groups; and retailers (including vape shops). The Consultation summary: proposals for the regulation of vaping products is available online.

Approximately half of respondents who commented on Proposal #5 supported requiring vaping product manufacturers to provide information on their products. Supporters included municipal/provincial/territorial governments, public health groups and NGOs, as well as some retailers and other members of the vaping industry. A number suggested additional items to be reported (e.g emissions testing), and some suggested reporting be more frequent. Others suggested reporting requirements for vaping products should be similar in scope to those required for tobacco products pursuant to the TRR. A majority of vaping industry stakeholders expressed concern that the proposal was too restrictive. They argued vaping products are an important harm reduction tool and, to achieve their potential health benefits, should not be overregulated. They argued reporting regulations would be too burdensome for smaller vaping industry players, forcing them underground.

In response to some of the concerns expressed, vaping product reporting regulations are being developed in a stepwise approach. At this time, the Regulations only require information on sales and ingredients. Additional vaping reporting requirements, including elements identified in the 2017 consultation document such as information on research and development and on promotional activities, are under consideration for future amendments to the Regulations. This stepwise approach is designed to avoid increasing the administrative burden on vaping manufacturers all at once and to spread the impact on Health Canada’s compliance monitoring activities over time. The ability of manufacturers to absorb the burden of additional reporting requirements will be considered during the development of any future amendments to the Regulations.

The Regulations were included in Health Canada’s Forward Regulatory Plan in the fall of 2017. Reporting requirements were also considered during parliamentary hearings on former Bill S-5, An Act to amend the Tobacco Act and the Non-smokers’ Health Act and to make consequential amendments to other Acts in 2018, including consideration of the new manufacturer reporting obligations for vaping products.

Prepublication in the Canada Gazette, Part I

The proposed Vaping Products Reporting Regulations were prepublished on June 18, 2022, in the Canada Gazette, Part I (CGI), for a 45-day consultation period that ended on August 2, 2022.

A total of 44 responses were received during the consultation period. The responses were comprised of the following: 16 from public health authorities; 11 from the general public (including 2 individuals who currently or previously vaped or smoked); 8 from the vaping industry (5 from manufacturers and importers, 2 from vaping industry associations and 1 from a supplier); 5 from NGOs; 3 from provincial governments and 1 from a health professional.

Those who expressed concerns about the proposal were from the vaping industry, including manufacturers and importers, vaping industry associations and suppliers.

Their key concerns were

Those who supported the proposal were from the public health authorities, NGOs, provincial governments, health professionals and the general public.

Their key suggestions for improvement were

All comments were reviewed and considered. Several submissions included comments that were outside the scope of the regulatory proposal, such as those related to flavour restrictions. Health Canada will consider them in the development of future proposals.

Health Canada’s response to key stakeholder concerns and suggestions
Increased administrative and financial burden on manufacturers

Several manufacturers were concerned about the additional financial and administrative burden needed to prepare the reports, which would be occurring while they are struggling with the implementation of duties imposed by the Excise Act, 2001. In addition, manufacturers expressed concern that the use of electronic forms would be an additional burden, fearing they would need to reconfigure their automated systems to submit information in the prescribed form. In some cases, they believed information may have to be re-copied and arranged into the prescribed form manually.

Response: Requiring only information on sales and ingredients at this time is expected to allow manufacturers with sufficient time to adjust to the administrative and financial burden of reporting. In addition, to further reduce the administrative burden, Health Canada has changed the frequency for the submission of sales reports from quarterly to semi-annually. Other comments and suggestions made during the consultation period to streamline the sales and ingredients information were incorporated where possible. For example, the requirement to provide each ingredient’s chemical name, determined using the nomenclature established by the International Union of Pure and Applied Chemistry, was removed, and the required information on the contents of assortments was simplified.

Based on experience with the review of reports submitted for tobacco products pursuant to the TRR, the lack of a prescribed format results in the data from each manufacturer being set out differently in the reports received by Health Canada, which causes delays in their compliance review and in the analysis of the information they contain. Requiring electronic forms that establish a uniform format is expected to help manufacturers meet the reporting requirements as well as reduce Health Canada’s review time. Several suggestions made during the consultation to simplify the electronic forms were also incorporated.

Finally, as the first report will not be due until late 2023, manufacturers are expected to have completed their registration process under the excise duty framework introduced in 2022 and will therefore not have to implement concurrently two new governmental programs.

Difficulty of obtaining ingredient information from suppliers

The vaping industry expressed concerns with the requirements to disclose all ingredients used to manufacture their vaping products. Certain manufacturers commented that they have limited knowledge of the identity and concentration of certain ingredients, such as those used to make flavour mixtures (concentrates), which are sourced from various suppliers. They also mentioned that this might prevent them from sourcing flavour mixtures in the future from suppliers that would not want their proprietary ingredient mixtures disclosed. Manufacturers also felt that the proposed three-month timeframe to provide the ingredients report on existing brands was too short.

Response: Health Canada had identified this potential challenge in the Regulatory Impact Analysis Statement (RIAS) that accompanied the prepublication of the proposed Regulations in the CGI. To address the concern that manufacturers would face challenges obtaining certain ingredient information from suppliers, Health Canada had mentioned in the RIAS that their suppliers could disclose the required ingredient information directly to the Department under separate cover.

Health Canada needs access to complete ingredient information to better understand the impact of these products. Partial access to their ingredients list was not considered appropriate for achieving the objective. Separate reporting requirements for ingredient suppliers were also considered but would add complexity and compliance challenges especially when suppliers are located in foreign jurisdictions. Full disclosure of ingredients is also required for tobacco product manufacturers pursuant to the TRR.

To address the concerns expressed by manufacturers about the time provided to comply with ingredient reporting, Health Canada has extended the time to produce the first ingredients report to December 31, 2023, which is approximately six months after the coming into force of the Regulations. This gives manufacturers additional time to make arrangements with their ingredient suppliers. In addition, a separate electronic form was developed for suppliers to facilitate the submission of the information under separate cover to Health Canada on behalf of a vaping product manufacturer.

Regarding the concern that the information received pursuant to the Regulations would be disclosed to the public, such measures are still under consideration; if the Department was to decide to advance public disclosure requirements, it would have to subject such a proposal to public consultation.

Cost-benefit analysis underestimated number of manufacturers and brands in Canada

The vaping industry stated that the number of manufacturers and brands in Canada are underestimated in the CBA that was included in the RIAS published in the CGI. A vaping industry association commented that small manufacturers had begun downsizing or closing their manufacturing facilities and were moving production of their brands to contract manufacturers in response to the duties being imposed on vaping products by the Excise Act, 2001.

Response: The CBA used a high range of brand and manufacturer estimates, that is 235 manufacturers (including importers) and 2 350 brands per manufacturer, including devices, based on an analysis of the 2019 vaping market prepared by Euromonitor International (EMI).footnote 5

An updated analysis from EMI commissioned by Health Canada, received after the CGI publication of the proposal, found that the estimated number of manufacturers and brands had in fact declined from 2019 to 2021, to 120 manufacturers including importers, and to between 1 500 and 1 800 brands.footnote 6 These new figures suggest that the number of manufacturers and brands reported in the previous RIAS were overstated and no adjustment is being made to the figures in the CBA.

The concerns raised by the vaping industry regarding the number of brands likely arise from differences in how brands are being counted. For example, one can count variants of brands with the same brand name, such as brand extensions, and can count different flavours, nicotine concentrations or packaging sizes as separate brands. Health Canada acknowledges that reporting for multiple variants is likely to increase administrative burden, however additional variants within a brand are expected to take less time due to similarities in reported information, as they would contain similar or identical ingredients.

Evidence of overstatement of the number of brands and manufacturers in the CBA from the 2019 and 2021 EMI data, and further consolidation anticipated by vaping industry stakeholders arising from amendments to the Excise Act, 2001 to impose duties on vaping products, suggest a trend toward consolidation in the vaping market. This consolidation would result in a reduction to the estimated administrative burden imposed by the Regulations. Given this uncertainty, no adjustment is being made to the figures in the CBA. The issue of additional administrative burden for brand variants is addressed as a qualitative impact in the “Benefits and costs” section.

VPRR need to be strengthened and aligned with current TRR

Public health advocates (NGOs, public health authorities, provincial governments) and some members of the general public recommended that the Regulations be strengthened and aligned with the TRR, in terms of the type of reports and the frequency of reporting. The proposal to require only sales and ingredients reports was seen as inadequate. In particular, it was suggested that information on vaping product emissions and toxicity should be collected immediately, stating that the ingredients reports alone would not provide sufficient information to understand the toxicity of chemicals in vaping products, and to help build a comprehensive set of regulations and public health policies.

Response: Health Canada has identified sales and ingredients reports as the first set of reports that it would collect. These reports contain important information that is not readily available by other means and will be useful in informing the development of regulations and policies on vaping products. Regarding emissions and toxicity reports, Health Canada feels that more work is needed in this area as there are currently no internationally recognized methods for testing in a reliable and comparable manner the emissions of vaping products or their toxicity. The Department is monitoring the development of such test methods.

Reporting of ingredients at first sale is insufficient

Public health advocates were concerned that the Regulations would only require manufacturers to provide information on their ingredients on or before the first sale of each brand and not for any subsequent changes to the ingredients in a reported brand. They have highlighted that this will not allow Health Canada to track ingredient changes over time. Separately, one vaping product manufacturer expressed their desire to update Health Canada on ingredient changes.

Response: In response to these concerns, Health Canada has modified the Regulations to require manufacturers to notify the Department whenever a change is made to the ingredient information that was previously submitted in a report for a vaping substance. This notification must be submitted on or before the day the manufacturer first sells the product that was manufactured with the changed ingredients. A new electronic form was developed for this purpose, entitled Notification of Change — Vaping Product Ingredients, which is incorporated by reference in the Regulations. This will allow the Department to identify when the ingredients used to manufacture vaping substances have been modified. Should the Department need information on the changed ingredient(s) information, a supplementary information request could be sent to manufacturers at any time, pursuant to subsection 7.3(2) of the TVPA, to collect this information.

Modern treaty obligations and Indigenous engagement and consultation

An initial assessment of modern treaty implications concluded these Regulations do not impact modern treaties with Indigenous peoples of Canada.

Instrument choice

Option 1: Baseline scenario (no reporting regulations, maintain current research and data collection activities)

This option would not introduce any reporting regulations for vaping products sold in Canada or for export. Health Canada would rely on data obtained from current research and data collection activities. This includes the purchase of vaping product sales data from third parties and the sampling of products to conduct laboratory characterization of their contents. Complete market sales data and detailed ingredient information is not released by vaping product manufacturers, nor is it available from external sources.

This option would not provide access to timely and relevant information to inform decisions on policies, programs and regulations for vaping products. The dynamic and changing nature of the vaping market makes it difficult to get an accurate assessment of market changes with current data sets. Therefore, the status quo is not considered an appropriate option.

Option 2: Voluntary reporting for vaping products

This option would ask vaping product manufacturers to voluntarily provide information about their vaping products to Health Canada. Due to the nature of the information that would be requested and because of the costs involved in preparing and submitting reports, manufacturers are unlikely to voluntarily comply.

This option is not considered suitable. Health Canada would not be able to collect complete sales and ingredients information that would inform the development of policies, programs and regulations for vaping products.

Option 3 (recommended): Reporting regulations to require manufacturers to report sales and ingredients information

This option implements the Regulations, requiring vaping product manufacturers to submit detailed information to Health Canada on their vaping product sales and ingredients.

This option is recommended as it provides Health Canada with a more complete picture of vaping product availability and sales, as well as the full access to vaping product ingredients. This detailed information is not available from public sources or through the purchase of data sets from third parties.

This option is recommended as it provides timely access to relevant information to support the purpose of the TVPA and to inform the development of policies, programs and regulations with respect to vaping products.

Regulatory analysis

Benefits and costs

Summary of cost-benefit analysis

It is anticipated that the Regulations will impact Canadians, vaping product manufacturers in all provinces and territories and Health Canada.

The information received pursuant to the Regulations will be used to better understand the impact of vaping products and further the objectives of the TVPA. One of these objectives is to prevent vaping product use from leading to the use of tobacco products by young persons and non-users of tobacco products.

The information will also help further the CTS objectives, which include helping people who smoke to quit tobacco, and protecting youth and non-tobacco users from nicotine addiction.

Implementation of the Regulations will require an investment of public sector resources. One-time and ongoing costs to Health Canada for implementation, compliance monitoring and enforcement activities are estimated at $2.0 million present value (PV) over the 10-year period or approximately $0.29 million in annualized value.

The reporting requirements in the Regulations will result in costs to vaping product manufacturers for the preparation of information on sales and ingredients, including estimated costs for electronic sales tracking systems. Total administrative and compliance costs to the vaping product manufacturers are estimated at $1.9 million present value over the 10-year period or about $0.3 million in annualized value.

Total quantified costs to vaping manufacturers and government are estimated at $3.9 million (PV) for the 10-year period or $0.6 million annualized.

The impact of additional administrative burden for brand variants identified during the CGI consultation is documented under qualitative negative impacts, and the impact of information collected under the Regulations is described under qualitative positive impacts.

As documented in the “Consultation” section, changes to reporting requirements have been made to respond to feedback received during the CGI consultation. Two of these changes affect the administrative costs calculated in the CBA included in the previous RIAS, the combined impact of which is a decrease in costs to industry of approximately from $2.9 million (PV) to $1.9 million (PV). First, sales reports will be semi-annual rather than quarterly, resulting in a decrease to estimated cost of sales reports from $2.2 million (PV) to $1.2 million (PV). Second, whenever there is a change to the ingredient information previously submitted in an ingredients report for a vaping substance, the manufacturer must notify Health Canada, resulting in an increase to the estimated costs of ingredient information from $359,101 (PV) to $372,952 (PV). These changes, when combined, result in a decrease in total monetized costs from $4.9 million (PV), as reported in the previous RIAS, to $3.9 million (PV), as reported in Table 2.

Quantitative and qualitative costs are explained in further detail in the following sections.

Analytical approach

The Cabinet Directive on Regulation requires departments to analyze the costs and benefits of federal regulations. Benefits and costs are estimated by comparing the incremental change from the current regulatory framework (i.e. the baseline scenario) to what is anticipated to occur under the new regulatory approach (i.e. the regulatory scenario).

Total costs of the Regulations are expected to be less than $1 million nationally in average annual costs. Therefore, a qualitative assessment of the costs and benefits of these Regulations has been undertaken. Costs and benefits have been quantified and/or monetized to the extent that data is available.

The Regulations are expected to come into effect in 2023. This cost-benefit analysis covers the 10-year period, consisting of ten, 12-month periods starting with registration of the Regulations in 2023. A 7% discount rate is used to estimate the present value of the incremental costs. All values reported for the 10-year period are expressed in 2021 constant dollars. Incremental benefits have not been quantified but are expressed qualitatively.

Baseline and regulatory scenarios

Under the baseline scenario, reporting regulations for vaping products in Canada would not be introduced. Information on vaping product sales available to Health Canada would continue to be incomplete, and detailed information on vaping product ingredients would continue to be unavailable. Vaping product reporting requirements are in place in one province (British Columbia), as described in the “Regulatory cooperation and alignment” section.

The imposition of excise duties on vaping products is expected to reduce the number of brands and manufacturers in Canada. Since October 1, 2022, manufacturers and importers of vaping products sold in Canada are required to be licensed or registered with the Canada Revenue Agency (CRA); they must pay an excise duty on the vaping product and must affix a vaping excise stamp to indicate that duty was paid. Since January 1, 2023, retailers may only sell vaping products that have a vaping excise stamp affixed to the product.

The anticipated impact of excise duties on vaping products means that the analysis presented below may overstate the baseline number of manufacturers and brands used to estimate the costs of the Regulations.

Under the regulatory scenario, the Regulations will require vaping product manufacturers to submit sales and ingredients information to Health Canada for vaping products sold in Canada. Health Canada will have access to important information that will support the purpose of the TVPA and will further the objectives of the CTS.

Quantitative and qualitative impacts are described in the following sections.

Quantitative impacts

It is assumed that there are up to 235 vaping product manufacturers impacted by the Regulations, 225 of which are small businesses, as per the Treasury Board of Canada Secretariat definition. It is further estimated that there are up to 10 brands per manufacturer, for a total estimate of approximately 2 350 brands on the market, including 90 vaping device brands. It is assumed that there is zero growth in the number of brands and manufacturers in the vaping market. The total number of brands in the Canadian market is expected to remain unchanged, with new brands being introduced as other brands are discontinued.

Precise information on the vaping market is currently unavailable to Health Canada. The Regulations are an attempt to remedy this lack of information. Estimates of costs to vaping product manufacturers are therefore based on analysis of information from purchased market data and commissioned research reports. Estimates of the number of brands and manufacturers are based on analysis of a 2020 report by Euromonitor International.footnote 5 Estimates of time to complete reports are based on testing of forms by Health Canada subject matter experts and market research incorporating industry input.footnote 7

Costs of vaping product reporting by manufacturers are calculated based on the estimated total number of manufacturers and brands sold in Canada. Existing reporting in one province is not expected to reduce this cost because specific reporting forms will be mandated for information on sales and ingredients and submitted by email to Health Canada. All industry cost items are described in the following sections.

As described in the “Consultation” section, vaping industry concerns about underestimates of brand and manufacturer counts could not be reconciled with updated EMI datafootnote 6 from 2021, which showed that the number of manufacturers and brands fell from the previous study in 2019.footnote 5 Furthermore, based on comments from vaping industry stakeholders, it is expected that there may be consolidation in the industry due to the introduction of excise duties on vaping products in 2023. As a result, manufacturer and brand counts may be overstated. Therefore, no adjustment has been made to the cost calculations included in the previous RIAS, and the issue of additional administrative burden for brand variants is documented as a qualitative negative impact.

Reporting on sales

Vaping product manufacturers are required to submit semi-annual sales reports for vaping products that are vaping substances, or that contain a vaping substance, and for vaping devices and specific vaping parts that do not contain vaping substances. Detailed information must be broken down by province and territory and for export by country of destination. It is assumed these reports will take 40 minutes to prepare, semi-annually, per brand, for 2 350 brands. The reports are expected to be prepared by an accountant at a labour cost of $48.19 per hour.footnote 8

Reporting on ingredients

Vaping product manufacturers are required to submit ingredients reports for existing and new vaping products that are vaping substances or that contain a vaping substance. It is assumed that ingredients reports will take two hours to prepare, per brand for 2 256 brands (excludes vaping devices and vaping parts that do not contain vaping substances), at the above-referenced labour cost of $48.19 per hour. While zero growth in the vaping market has been assumed, new brands may be introduced. It is assumed that 1 in 10 new brands are introduced each year to replace existing brands. Therefore, the estimate is calculated based on reports for 10 brands per manufacturer in the first period, and 1 brand per manufacturer as an ongoing cost in subsequent periods, for the 235 manufacturers multiplied by 96% (this accounts for the exclusion of the 4% of brands that are vaping devices and vaping parts that do not contain vaping substances). In addition, whenever there is a change to the ingredient information previously submitted in an ingredients report for a vaping substance, the manufacturer must notify Health Canada. Changes to ingredient information previously submitted in ingredient reports are assumed to occur at a rate of 10% per year, or 1 in 10 brands, a rough estimate derived from research on product reformulation rates for other consumer productsfootnote 9,footnote 10. It is assumed that notification of changes to information previously submitted will take 10 minutes, per brand, for 1 brand per manufacturer as an ongoing cost in periods 2 to 10, for the 235 manufacturers multiplied by 96%.

Electronic sales system

A survey of the vaping industry indicated a one-time purchase of hardware and ongoing maintenance of software for an electronic sales system may be necessary for vaping product manufacturers who do not already have a system in place to compile sales data electronically. It is assumed that up to 20% of the 225 small manufacturers (45) would need to invest in such a system. The 45 firms will incur a one-time cost for hardware of $2,172, and annual costs for maintenance of the software of $825. These costs are based on market research (Industrial Economics, Incorporated; 2018), and are adjusted to 2021 dollars using the Canadian Consumer Price Index.

Public sector resources to administer the Regulations, including resources to review submitted information and compliance and enforcement activities, are described in the following sections.

Government costs

Implementation of the Regulations will require a minor investment of public sector resources, in the form of one-time and ongoing costs to Health Canada. These costs include labour and non-labour costs to administer the Regulations.

It is estimated that Health Canada will incur costs of $379,000 in the first period, comprising of costs related to compliance promotion to inform manufacturers of the new reporting requirements, the development of compliance and enforcement procedures, the monitoring of information submitted for compliance, trend analysis and the maintenance of internal filing systems to track the information submitted. In periods 2 to 10, the costs for monitoring of information submitted for compliance, trend analysis and maintenance of internal filing systems, estimated at $249,000, annually, are expected to continue as recurring costs.

These activities will be performed by the same Health Canada teams that verify and analyze tobacco reports pursuant to the TRR. Additional costs to administer information on vaping products will be absorbed through existing budget allocations and efficiencies that have been achieved through experience with tobacco reports.

Incremental costs by each type of activity are summarized in Table 2 below.

Cost-benefit statement
Table 2: Monetized costs
Impacted stakeholder Description of cost Period 1 Period 5 Period 10 Total (present value) Annualized value
Government Government costs: implementation, compliance monitoring activities and analysis of the information submitted $378,963 $249,492 $249,492 $2,004,462 $285,390
Industry Sales reports submitted semi-annually for all vaping products $151,005 $151,005 $151,005 $1,151,764 $163,985
Ingredients report and a notification each time there is a change to the ingredient information previously submitted (vaping products containing vaping substances) $217,436 $23,559 $23,559 $372,952 $53,100
Electronic sales system (software) $37,137 $37,137 $37,137 $279,096 $39,737
Electronic sales system (hardware) $97,730 $0 $0 $97,730 $13,915
Industry costs, subtotal $503,309 $211,701 $211,701 $1,901,542 $270,737
All stakeholders Total costs $882,272 $461,193 $461,193 $3,906,004 $556,127
Qualitative impacts
Positive impacts

The information collected under the Regulations will complement other sources of data used by Health Canada to better understand the impact of vaping product use on the health and safety of Canadians. For example, the information will supplement ongoing research and data collection activities to identify health hazards that could result from vaping product use.

It is likely that Canadians will indirectly benefit from the information received under the Regulations. For example, the information is expected to provide insights into vaping market sales trends and vaping product ingredients. Collecting tobacco product information pursuant to the TRR, for example, resulted in improved decisions on tobacco control policies, programs and regulatory activities.

The collected information will inform the development of regulations that support the purpose of the TVPA, including preventing vaping product use from leading to the use of tobacco products by young persons and non-users of tobacco products. The information will also inform the development of policies and programs to help further the CTS objectives, in particular those aimed at helping Canadians quit smoking and protecting youth and non-tobacco users from nicotine addiction. The CTS features broad, population-based approaches to achieve the target of less than 5% tobacco use prevalence by 2035 to reduce the death and disease burden of tobacco use.

Negative impacts

Electronic sales system cost for new entrants

New firms entering the market will incur the aforementioned first-year costs for electronic sales systems. It is acknowledged that some new entrants may incur this cost despite the assumed zero growth in the vaping market, i.e. some new manufacturers enter while some manufacturers exit for a net zero growth. Due to lack of available data, uncertainty of future market trends, this cost has not been estimated.

Administrative burden of variants within a brand

Health Canada acknowledges that additional administrative costs in terms of time to complete reports may arise from multiple brand variants, although each additional variant would require less time due to similarity of information (e.g. similar or identical ingredients). This additional administrative cost is offset by the evidence from EMI vaping market data for 2019 and 2021 suggesting that the numbers of brands and manufacturers, and therefore quantitative costs, are overestimated in the previous CBA.

In their response during the CGI consultation, the vaping industry indicated that the number of manufacturers and brands, and therefore the estimated time to complete ingredients and sales reports, had been underestimated in the CBA. The industry did not provide comprehensive data that could be used to adjust cost estimates. The concerns raised by the industry regarding the underestimated number of brands likely arise from differences in counting the brand variants (e.g. different flavours).

Efforts were made to reconcile estimates in the previous CBA with industry feedback. An updated analysis by EMI,footnote 6 commissioned by Health Canada, reports that the number of manufacturers and brands had declined from 2019 to 2021. The EMI reports are the best source of comprehensive data on the vaping market in Canada. The apparent trend of consolidation reported by EMI is expected by the vaping industry to continue, as per their comments during the CGI consultation that this is a result of the recent implementation of excise duties on vaping products.

Due to significant uncertainty, no adjustment has been made to the quantitative cost estimates in the CBA and this item is addressed qualitatively.

Small business lens

According to the limited information available about the vaping product market, most of the vaping product manufacturers impacted by the Regulations are small businesses. Of the approximately 235 businesses impacted by these changes, it is estimated that 225 are small businesses according to the Treasury Board of Canada Secretariat definition.footnote 11

The small business lens applies, as there are impacts on small businesses associated with the Regulations. These are limited to vaping product manufacturers. Retailers will not be directly impacted by the Regulations unless they also manufacture vaping products. The small business costs are not large in aggregate. It is anticipated that costs will be relatively larger for the estimated 20% of small businesses that do not have electronic sales systems in place already.

As described in the “Regulatory development” section of this document, the Regulations are being developed in a stepwise approach as an attempt to minimize the administrative burden placed on vaping manufacturers at any one time. The impact of additional vaping reporting requirements will be considered if future amendments are brought forward.

Additional flexibility considered

It is estimated that the Regulations will affect 225 small businesses, the majority of the estimated 235 total manufacturers in Canada. Modified compliance or administrative requirements for small businesses would severely limit the quality and accuracy of information collected pursuant to the Regulations. For instance, less frequent sales reporting was considered for small businesses, such as annual reporting instead of semi-annually. More frequent reporting provides insights into market changes throughout the year and changes that result from measures implemented by various Canadian jurisdictions to address vaping product use. The additional flexibility options considered would introduce significant gaps in the development of a whole of market data set. Therefore, a flexible option was not developed.

Incremental costs to all small businesses in the vaping industry

Small businesses will be impacted by the Regulations through incremental administrative and compliance costs. The total costs to all impacted small businesses are estimated at $1.84 million (PV) over the 10-year period (or about $0.26 million in annualized value).

The estimated incremental cost of the Regulations per impacted small business in the vaping industry is $8,163 (PV) over the 10-year period (or about $1,162 in annualized value).

Small business lens summary
Table 3: Compliance costs
Activity Annualized value Present value
Electronic sales system (software) $39,737 $279,096
Electronic sales system (hardware) $13,915 $97,730
Total compliance cost $53,652 $376,826
Table 4: Administrative costs
Activity Annualized value Present value
Sales reports $157,007 $1,102,753
Ingredients reports and notifications $50,840 $357,081
Total administrative cost $207,847 $1,459,834
Table 5: Total compliance and administrative costs
Totals Annualized value Present value
Total cost (all impacted small businesses) $261,499 $1,836,661
Cost per impacted small business $1,162 $8,163

One-for-one rule

The one-for-one rule applies since there is an incremental increase in administrative burden on business, and the addition of a new regulatory title (Vaping Products Reporting Regulations).

Administrative costs will arise from the Regulations requiring vaping product manufacturers to prepare information on sales and ingredients, as listed in Table 2.

Calculations based on the Standard Cost Model methodology estimate regulatory changes will result in an annualized increase in total administrative costs to all businesses of approximately $84,911 or $361.32 per business (refer to Table 6). This estimate is expressed in constant 2012 Canadian dollars. Annualized values were calculated using a 7% discount rate over the 10-year period.

It is assumed ingredients reports will take 2 hours per brand, 10 brands per company (20 hours total) at $41.42 per hour (2012 Canadian dollars) for 96% of the 235 companies (to account for exclusion of the 4% of the brands that are vaping devices and vaping parts that do not contain vaping substances).

While zero growth in the vaping market has been assumed, new brands may be introduced, to replace other brands that have been discontinued. Therefore, the cost is calculated based on reports for 10 new brands per manufacturer in the first period, and 1 new brand per business as an ongoing cost per period, for the 235 manufacturers multiplied by 96% (to account for exclusion of the 4% of brands that are vaping devices and vaping parts that do not contain vaping substances). In addition, whenever there is a change to the ingredient information previously submitted in an ingredients report for a vaping substance, the manufacturer must notify Health Canada. It is assumed that a notification of change to ingredient information previously submitted will take 10 minutes, per brand, for 1 brand per manufacturer as an ongoing cost in periods 2 to 10, for the 235 manufacturers multiplied by 96%.

Ongoing costs for sales reporting is estimated based on 235 manufacturers, 40 minutes per brand, 10 brands per company (400 minutes total), on a semi-annual basis, at a cost of labour of $41.42 (2012 Canadian dollars).

The overall impact of the Regulations is a net increase in administrative costs.

Table 6: One-for-one rule
Cost Value in 2012 Canadian dollars
Annualized administrative costs $84,911
Annualized administrative costs per business $361.32

Regulatory cooperation and alignment

Canada is a Party to the World Health Organization Framework Convention on Tobacco Control (FCTC). While vaping products are not captured in the scope of the FCTC, the World Health Organization (WHO) issued a report in 2016 on vaping products (referred to as electronic nicotine delivery systems (ENDS) and electronic non-nicotine delivery systems (ENNDS) in this report). This report was in response to a request made by Parties to the WHO FCTC. It contained a list of options that Parties that had not banned the importation, sale, and distribution of ENDS or ENNDS might consider in accordance with their national law to minimize health risks to users and non-users. One of the options proposed was to require manufacturers to disclose product content to governments.

Provinces and territories

To date, only one province, British Columbia, has put in place regulations requiring the vaping industry to submit reports. One additional province, Quebec, and one territory, Nunavut, have legislation with regulatory authority to collect vaping product–related information. Below is a summary of the reporting requirements in these jurisdictions.

British Columbia

British Columbia introduced reporting requirements for vaping products through the E-Substances Regulation. Business owners must submit a notice of intent if they plan to sell restricted e-substances. In addition, they must submit product, manufacturing and sales reports as required by the Minister. Product and manufacturing reports must be submitted at least six weeks before the restricted e-substance is first sold. Sales reports must be submitted annually. A Notice of Intent must also be submitted to the Ministry of Health prior to January 15 of each year that a retailer intends to continue sales.

The Regulations are aligned with reporting requirements for vaping products in British Columbia. While the Regulations require only manufacturers to provide information, British Columbia collects information from vaping retailers and manufacturers operating exclusively in the province.

Quebec

In 2015, the Tobacco Control Act was amended to include vaping products in the scope of the legislation, making them subject to the same provisions as tobacco products. The Act has authority to make regulations on standards relating to reports submitted to the Minister by tobacco and vaping manufacturers. Additionally, the Minister may, at any time require manufacturers and distributors to file a report if a new product, distribution method, or brand is introduced on the market or if required, in the opinion of the Minister, for reasons of public health. To date, Quebec has not implemented any regulations requiring such reports.

Nunavut

On May 28, 2021, the Tobacco and Smoking Act came into force in Nunavut replacing the former Tobacco Control and Smoke-Free Places Act. This legislation establishes regulatory authority requiring tobacco, vaping and shisha retailers to submit a report to the Government. Failure to comply can result in fines for each day the contravention continues. To date, Nunavut has not implemented any regulations requiring such reports.

International
United States

In the United States, vaping products have been subject to the Federal Food, Drug and Cosmetic Act since 2016. The United States have put in place a rigorous pre-market regulatory regime. Vaping product manufacturers seeking to gain market access must file a Premarket Tobacco Product Application. Applications must include a full statement of the components, ingredients, additives, properties, principles of operation as well as any available data about health risks. Annual reports may also be required by the Food and Drug Administration as a condition for issuing a marketing-granted order.

European Union

As per the Tobacco Product Directive (PDF), European Union manufacturers must submit an electronic notification to the Member State six months prior to a vaping product being sold in that Member State. The notification includes basic contact information, a list of ingredients, and emissions by product brand name and type, and information on the production process. Information on the components of the devices as well as data on the nicotine uptake are also required. Industry must submit sales information as well as marketing information, such as age preferences and mode of sale as well as market surveys, annually.

New Zealand

In 2020, New Zealand passed the Smokefree Environments and Regulated Products (Vaping) Amendment Act 2020 to regulate the safety of notifiable products, including vaping products and smokeless tobacco products. Pre-notification requirements include information on product safety and other applicable requirements. Contact information of the applicant (retailer), information on the product and its parts (including substances) and a declaration that the product meets all requirements, must be provided and renewed annually. In addition, any safety concerns or significant changes must be reported as soon as possible.

The Regulations are aligned with information requirements in other countries that are either required to support a pre-market approval process or to meet post-market surveillance requirements.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified for these Regulations.

Rationale

The reporting requirements for vaping products are similar, but not as comprehensive as those already in place for tobacco products. Information collected by Health Canada under the TRR is used to inform various policy, program and regulatory decisions and to support the development of effective tobacco control strategies. It is expected that the Regulations will provide Health Canada with similar benefits, although with a more limited scope.

Vaping product sales and ingredients data will inform the development of policies, programs and regulations for vaping products. This will support the overall purpose of the TVPA, including preventing vaping product use from leading to the use of tobacco products by young persons and non-users of tobacco products. It would also further the CTS objectives, including helping people who smoke to quit tobacco and protecting youth and non-users of tobacco products from nicotine addiction.

The Regulations will result in total costs to industry and government estimated at $4.92 million (PV) over a 10-year period (or about $0.70 million in annualized value). The monetized costs to the vaping product manufacturers are associated with the preparation of information on sales and ingredients [estimated at $2.91 million (PV) or $0.41 million in annualized value]. The implementation of the proposal will result in one-time and ongoing costs to Health Canada from performing compliance, monitoring and enforcement activities, at an estimated cost of $2.0 million (PV) or $0.29 million in annualized value. The costs to Health Canada will be absorbed through existing budget allocations and process efficiencies gained from experience with tobacco reports submitted pursuant to the TRR.

The Regulations are aligned with reporting requirements for vaping products in British Columbia and information requirements in other countries collecting similar information, such as the United States of America and the European Union.

Implementation, compliance and enforcement, and service standards

Implementation

The Regulations are made pursuant to the powers of the TVPA and come into force upon their registration. Vaping product manufacturers are required to submit their initial sales report within a month after the first complete semi-annual reporting period after the coming into force of the Regulations. For example, if registration takes place in June 2023, the first complete semi-annual period will be from July 1 to December 31, 2023, and the sales report must be submitted on or before January 31, 2024. After the initial report, sales reports are required semi-annually and must be submitted on or before the last day of the month that follows each semi-annual period.

The first ingredients report must be submitted on or before December 31, 2023, which is approximately six months after the coming into force of the Regulations. Thereafter, ingredients reports are required each time a brand that was not included in a previous report on ingredients, is first sold in Canada. Manufacturers must also submit a notification whenever a change is made to the ingredient information that was previously submitted in an ingredients report for a brand. The notification must be submitted on or before the day the manufacturer first sells the product that was manufactured in accordance with the change to which the notification pertains.

Compliance promotion and outreach activities (including notices) informing vaping product manufacturers of the new requirements will increase awareness of the measures set out in the Regulations and assist regulated parties in achieving compliance.

Compliance and enforcement

The Government of Canada will actively monitor manufacturers’ compliance with the Regulations primarily through reviewing submitted information for accuracy and completeness and identifying where information was due but not submitted. New manufacturers will be identified and contacted by Health Canada to inform them of their reporting obligations. Compliance promotion activities will be followed by compliance monitoring activities and a progressive enforcement approach.

Where federal inspectors have reasonable grounds to believe the Regulations have been contravened, appropriate measures will be taken. These measures include warning letters, compliance plans, or recommendations for prosecution. Compliance and enforcement strategies will be consistent with the current overall approach to other provisions set out in the TVPA. Every manufacturer who contravenes subsection 7.3(1) of the TVPA is guilty of an offence and liable on summary conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding six months, or to both.

Service standards

The Regulations do not relate to providing a service to the public or to industry; therefore, there are no associated service standards.

Transparency and international obligations

Canada is a Party to the FCTC. Article 5.3 of the Convention obliges Parties, in setting and implementing their public health policies with respect to tobacco control, to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law. During public consultations on the proposal, Health Canada asked interested parties to declare any perceived or actual conflicts of interest with the tobacco industry when providing input. Individuals who are part of the tobacco industry or an affiliated organization, or individuals acting on their behalf, were also asked to clearly state so in their submission.

Members of the vaping and/or pharmaceutical industry, an affiliated organization or an individual acting on their behalf were asked to clearly indicate this in their submission.

Finally, for transparency purposes, Health Canada has posted on its website a summary of each meeting held with representatives of the tobacco or vaping industry.

Contact

Mathew Cook
Manager
Scientific Regulations Division
Tobacco Products Regulatory Office
Tobacco Control Directorate
Controlled Substances and Cannabis Branch
Health Canada
Address locator: 0301
150 Tunney’s Pasture Driveway
Ottawa, Ontario
K1A 0K9
Email: pregs@hc-sc.gc.ca