Order Amending the Fees in Respect of Drugs and Medical Devices Order (Biocides): SOR/2024-121

Canada Gazette, Part II, Volume 158, Number 13

Registration
SOR/2024-121 June 4, 2024

FOOD AND DRUGS ACT

Whereas, under section 30.62footnote a of the Food and Drugs Act footnote b, the Minister of Health has consulted with any persons that the Minister considers to be interested in the matter;

Therefore, the Minister of Health makes the annexed Order Amending the Fees in Respect of Drugs and Medical Devices Order (Biocides) under subsections 30.61(1)footnote a and 30.63(1)footnote a of the Food and Drugs Act footnote b.

Ottawa, June 3, 2024

Mark Holland
Minister of Health

Order Amending the Fees in Respect of Drugs and Medical Devices Order (Biocides)

Amendments

1 (1) The definition performance standard in subsection 1(1) of the Fees in Respect of Drugs and Medical Devices Order footnote 1 is replaced by the following:

performance standard
means the document entitled Performance Standards for the Fees in Respect of Drugs and Medical Devices Order that is published by the Government of Canada on its website, dated February 16, 2024. (norme de rendement)

(2) Paragraph (a) of the definition fiscal year in subsection 1(1) of the Order is replaced by the following:

(3) Subsection 1(2) of the Order is replaced by the following:

Other words and expressions

(2) Unless the context otherwise requires, other words and expressions used in this Order have the meanings assigned to them by the Food and Drug Regulations, the Medical Devices Regulations or the Biocides Regulations, as the case may be.

2 Subsection 2(1) of the Order is amended by adding the following after paragraph (b):

3 (1) Section 5 of the Order is amended by adding the following after paragraph (d):

(2) Section 5 of the Order is amended by adding the following after paragraph (g):

4 Paragraph 17(a) of the Order is replaced by the following:

5 Paragraph 26(a) of the Order is replaced by the following:

6 The Order is amended by adding the following after section 27:

DIVISION 2.1

Fees for Examination of an Application — Biocides

Definition

Definition of application

27.1 In this Division, application means any of the following:

Fees and Remissions

Fee for examination

27.2 (1) Subject to paragraph 27.3(b) and section 27.5, the fee for the examination of an application in respect of a class set out in column 1 of Schedule 2.1 and described in column 2 is the fee set out in column 3 of that Schedule.

Fee paid by Person that files application

(2) The fee is payable by the person that files the application.

Fee and timing of payment — Preliminary examination

27.3 If a preliminary examination is conducted in respect of an application,

Fee and timing of payment — No preliminary examination

27.4 If a preliminary examination is not conducted in respect of an application, the fee is payable on the issuance by the Minister of a notice to the person referred to in subsection 27.2(2) stating that the application has been received.

Fee — filing in previous fiscal year

27.5 For the purposes of subsection 27.2(1), if the Minister issues a notice referred to in section 27.3 or 27.4 in the fiscal year that follows the fiscal year in which the application was filed, the fee that is payable is the fee that was payable in the fiscal year in which the application was filed.

Remission — small business

27.6 Subject to section 27.8, remission is granted to the person referred to in subsection 27.2(2) of an amount equal to 50% of the fee that is payable under subsection 27.2(1) if the person provides with their application, in a form established by the Minister,

Remission — first application by small business

27.7 Subject to section 27.8, remission is granted to the person referred to in subsection 27.2(2) of an amount equal to the fee that is payable under subsection 27.2(1) if the following conditions are met:

Fee or difference payable

27.8 If the Minister requests under section 5 that the person referred to in subsection 27.2(2) provide additional information, the fee — or the difference between the fee payable under subsection 27.2(1) and the amount already paid, as the case may be — is immediately payable if

7 The Order is amended by adding the following after section 58:

DIVISION 6

Fees for Right to Sell Biocides

Annual fee

58.1 (1) The annual fee that is payable for the right to sell a biocide for which a market authorization has been issued under section 11 of the Biocides Regulations is $1,535.

Fee payable by person that sold biocide

(2) The fee is payable by the person to which a market authorization was issued if the person has sold the biocide in the 12 months preceding October 1.

Timing of payment

(3) The fee is payable on October 1.

Non-application — permanent discontinuance of sale

(4) Subsection (1) does not apply to the person if they have informed the Minister, in accordance with section 47 of the Biocides Regulations, that they permanently discontinued the sale of the biocide in Canada in the 12 months preceding October 1.

Remission — small business

58.2 Subject to section 58.3, remission is granted to the person referred to in subsection 58.1(2) of an amount equal to 25% of the fee that is payable under subsection 58.1(1) if the person provides, with the information referred to in section 46 of the Biocides Regulations, in a form established by the Minister,

Difference payable

58.3 If the Minister requests under section 5 that the person referred to in subsection 58.1(2) provide additional information, the difference between the fee payable under subsection 58.1(1) and the amount already paid is immediately payable if

8 Items 10 and 11 of Schedule 1 to the Order are repealed.

9 The portion of item 1 of Schedule 1 to the Order in column 2 is replaced by the following:
Item

Column 2

Description
1 Submissions in support of a drug that contains a medicinal ingredient not previously approved in a drug for sale in Canada and that is not a variation of a previously approved medicinal ingredient such as a salt, ester, enantiomer, solvate or polymorph1

10 The Order is amended by adding, after Schedule 2, the Schedule 2.1 set out in the schedule to this Order.

11 Section 1 and the heading before it of Schedule 6 to the Order are repealed.

12 Item 1 of Schedule 6 to the Order is repealed.

13 The portion of item 3 of Schedule 6 to the Order in column 1 is replaced by the following:
Item

Column 1

Description
3 Drug, other than a biocide and other than one referred to in item 2

Transitional Provision

14 A person that submits an application, under subsection 10(1) of the Biocides Regulations, for a market authorization for a biocide, as defined in subsection 1(1) of those Regulations, is not required to pay the fee for the examination of the application referred to in subsection 27.2(1) of the Fees in Respect of Drugs and Medical Devices Order if the biocide is the subject of one of the exceptions set out in section 67 or 69 of those Regulations.

Coming into Force

15 (1) Subject to subsection (2), this Order comes into force on the first anniversary of the day on which the Biocides Regulations are registered.

(2) Sections 8, 9 and 11 to 13 come into force on the fifth anniversary of the day on which the Biocides Regulations are registered.

SCHEDULE

(Section 10)

SCHEDULE 2.1

(Subsection 27.2(1))

Fees for Examination of an Application — Biocides
Item

Column 1

Class

Column 2

Description

Column 3

Fee ($)
1 Biocide full review — novel biocide An application for a market authorization or for a notice of acceptance in respect of a major change, other than an application based on a comparison referred to in item 7, if the biocide has a novel active ingredient, a novel combination of active ingredients, or a novel physical form, use, purpose or method of application 41,685
2 Biocide full review — tier I An application for a market authorization or for a notice of acceptance in respect of a major change, other than an application referred to in item 1, that contains 25 or fewer reports of tests and studies with respect to efficacy data 8,595
3 Biocide full review — tier II An application for a market authorization or for a notice of acceptance in respect of a major change, other than an application referred to in item 1, that contains 26 to 50 reports of tests and studies with respect to efficacy data 11,469
4 Biocide full review — tier III An application for a market authorization or for a notice of acceptance in respect of a major change, other than an application referred to in item 1, that contains at least 51 reports of tests and studies with respect to efficacy data 13,523
5 Biocide comparison — labelling only An application for a market authorization or for a notice of acceptance in respect of a major change that is based on a comparison and requires a review of labelling 2,748
6 Biocide comparison — administrative application An application for a market authorization or for a notice of acceptance in respect of a major change that is based on a comparison between the biocide and another biocide that is the subject of a market authorization in cases where only the brand name of the biocide, the name of the applicant or the name of the holder of the market authorization, or any combination thereof, differs from the corresponding information in respect of the other biocide 975
7 Biocide — use of foreign decisions An application for a market authorization that is based on a comparison between the biocide and a biocide that is authorized for sale by a foreign regulatory authority or an application for a notice of acceptance in respect of a major change to the biocide that is the subject of such a market authorization 3,100
8 Biocide monograph An application for a market authorization or for a notice of acceptance in respect of a major change that includes an attestation of compliance with a biocide monograph prepared by the Minister and requires supporting information for aspects of the biocide that are outside the parameters of the monograph 1,861
9 Biocide major change — monograph An application for a notice of acceptance in respect of a major change that includes an attestation of compliance with a biocide monograph prepared by the Minister and that does not require supporting information because the aspects of the biocide that are impacted by the change are within the parameters of the monograph 1,363
10 Biocide major change — quality and risks An application for a notice of acceptance in respect of a major change that does not include reports of tests and studies with respect to efficacy data 4,955
11 Biocide minor change The examination of a written description of a minor change 1,363

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issues

Health Canada has introduced a new single framework under the Food and Drugs Act (FDA) for the regulation of products that sanitize or disinfect hard or soft non-living and non-liquid surfaces that prevent disease in humans or animals (referred to as surface sanitizers and disinfectants in this document). Surface sanitizers regulated under the Pest Control Products Act (PCPA), disinfectants regulated under the Food and Drug Regulations (FDR) and all surface sanitizers for use in food premises that fall under the purview of the FDA will now be transferred to the new Biocides Regulations (also referred to as the Regulations) and referred to collectively as biocides. In support of regulatory activities under the Biocides Regulations, Health Canada will charge fees for the examination of applications for market authorizations and applications and notifications for changes to authorized biocides, as well as post-market monitoring of products on the Canadian market. These fees will be fixed in the Fees in Respect of Drugs and Medical Devices Order (Fees Order).

Background

Having different requirements for biocides has not provided a consistent approach to their regulation. This has resulted in product classification challenges, differences in requirements for the biocide supply chain, and potential hurdles for greater international alignment. These challenges, that will continue to exist until the Regulations come into force, were highlighted during the COVID-19 pandemic.

The COVID-19 pandemic created an unprecedented demand for health products, and increased strains on the Canadian health care system and industry. From the beginning of the pandemic, biocides played an essential role in a coordinated approach to help prevent the spread of COVID-19, as certain biocides can kill the SARS-CoV-2 virus that causes COVID-19.

In response to the increased demand for biocides during that time, and to alleviate pressures experienced by the Canadian health care system and industry, Health Canada introduced interim orders and operational measures to mitigate shortages of certain biocides. However, these were temporary and as such did not provide long-term agility to maintain or improve access to biocides in the future.

Certain surface sanitizers that meet the FDA definition of a drug that are regulated under the PCPA, disinfectants regulated under the FDR, and surface sanitizers for use in food premises that are subject to voluntary standards under the FDA, will be regulated under the Biocides Regulations. Similarly, fees for certain surface sanitizers set in the Pest Control Products Fees and Charges Regulations and fees for disinfectants fixed in the Fees Order and will be brought under a single framework. As the Minister of Health has the authority under subsection 30.61(1) of the FDA to fix, by order, fees for matters such as services, regulatory processes or approvals, or rights and privileges provided under the FDA, the fees for regulatory activities related to biocides will be fixed in the Fees Order. While surface sanitizers for use in food premises are currently not subject to fees, under the Biocides Regulations fees will be charged.

Regulating biocides and fixing fees for them under a single framework will harmonize regulatory requirements, help streamline the pre-market approval process, better align certain fees with level of effort, and increase the predictability of the regulatory process for industry. In addition, the introduction of the use of the foreign decisions review category in the Biocides Regulations will allow Health Canada to leverage authorizations from foreign jurisdictions, starting with the United States Environmental Protection Agency, thereby reducing duplication for companies operating internationally and the associated burden in the review of applications. This will also bring biocides to the Canadian market sooner and will help facilitate timely access to products for consumers. The Biocides Regulations will enable continuous post-market oversight of a biocide’s benefits and risks.

Objective

The objective of these amendments to the Fees Order is to implement new fees and amend existing fees for the authorization and sale of biocides in Canada, pursuant to the implementation of the Biocides Regulations.

Description

The amendments to the Fees Order will fix fees for applications that are submitted under the Biocides Regulations in respect of:

Market authorization and post-authorization changes

An application for a market authorization must be submitted to Health Canada for review and approval before a biocide can be sold in Canada. After a market authorization is issued, post-authorization changes to a biocide will be permitted. Changes will be categorized as major or minor, each with separate requirements outlined in the Biocides Regulations.

Fee and review categories

Three existing disinfectant fee and review categories will be amended in the Fees Order to reflect their new classification as biocides, and six new categories will be introduced.

Existing categories
New categories

Applications based on a comparison to a biocide that is already authorized in Canada will be accepted through the ‘Biocide comparison — labelling only’ and ‘Biocide comparison — administrative application’ categories with specific requirements for each category further outlined in guidance. For applications based on a comparison to a biocide that is authorized for sale by a foreign regulatory authority, those must be submitted under the ‘Biocide — use of foreign decisions’ category.

To ensure clarity of the different types of post-authorization categories, a separate category has been introduced for major changes that are supported by a biocide monograph that is prepared by Health Canada. Applications for such changes will be accepted through the ‘Biocide major change — monograph’ category. Descriptions of all the review categories and their associated fee are set in Schedule 2.1 of the Fees Order.

Right to sell fee

A right to sell fee that is specific to biocides is being introduced. For certain surface sanitizers, this fee will replace the annual charge under the Pest Control Products Fees and Charges Regulations, and for disinfectants, it will replace the current disinfectant right to sell fee under the Fees Order. The fee for the right to sell a biocide is to be paid annually by companies for each market authorization issued by Health Canada with an associated product being sold on the Canadian market. This fee will partially fund post-market surveillance, and compliance and enforcement activities for biocides on the Canadian market.

Efficacy claims under both the FDA and PCPA

Products that make efficacy claims under both the Biocides Regulations and the PCPA will require a market authorization and registration, respectively, under both frameworks, and will be charged fees under both the Fees Order and the Pest Control Products Fees and Charges Regulations.

Fee setting and annual fee adjustment

Fees for the examination of applications are based on a 75% (of pre-market regulatory costs) fee setting ratio and the fee for the right to sell a biocide is based on a 67% (of post-market regulatory costs) fee setting ratio. Fees will be adjusted annually on April 1st and tied to the Consumer Price Index value of April of the previous year, rounded up to the nearest dollar.

Products regulated under the Biocides Regulations are exempt from establishment licensing requirements; therefore, no establishment licence fees will be charged.

An additional inflationary adjustment of 4.4% has been added to fees that were published in the Biocides Fee Proposal, to account for the delay of fees coming into force from fiscal year 2024-2025 to fiscal year 2025-2026. This adjustment is equivalent to the Consumer Price Index adjustment for drug and medical device fees that will come into effect April 1, 2024.

Transfer of surface sanitizers and disinfectants

Existing registrants of surface sanitizers and authorization holders of disinfectants who wish to continue to market their product as a biocide can submit a transition application (no safety or efficacy data submitted) and will not be charged a fee for the examination of their abbreviated application as the product must remain identical to what was previously authorized (changes to the brand name and shelf life would be permitted).

Registrants and authorization holders must obtain a biocide market authorization within four years following the coming into force of the Biocides Regulations. Companies can transition anytime during the four-year period and will continue to pay the appropriate fees for their surface sanitizer or disinfectant as set out in the Pest Control Products Fees and Charges Regulations and the Fees Order, respectively, until they obtain a market authorization, at which point the biocide annual right to sell fee will apply.

Transfer of surface sanitizers for use in food premises

Manufacturers of surface sanitizers for use in food premises that do not have a drug identification number (DIN) under the FDR will have a six-year transition period to come into compliance with the Biocides Regulations once they are in force. Applicants seeking market authorization will need to apply under an appropriate review category and pay the associated fee.

Performance standards and remissions

Health Canada will have performance standards for all fee categories. Existing disinfectant performance standards will be maintained for fee categories that will be amended and new standards will be established for new categories. In defined circumstances the review clock may be paused, and the duration of the pause will not count when measuring performance. If Health Canada determines that a performance standard in respect of a fee has not been met, a remission will be granted in the amount of 25% of the fee paid or payable. Performance against standards will be reported in the annual Health Canada Fees Report, which is posted on Health Canada’s website.

Coming into force

The amendments to the Fees Order will come into force on the first anniversary of the day the Biocides Regulations are registered. Existing fees for disinfectants set out in the Fees Order will be repealed at the end of the four-year transition period under the Biocides Regulations.

Regulatory development

Consultation

On May 7, 2022, Health Canada pre-published the proposed Biocides Regulations in the Canada Gazette, Part I along with a notice of intent to announce a proposal to amend the Fees Order to introduce fees specific to biocides. Stakeholders were invited to submit comments on the Biocides Fee Proposal during a 70-day consultation period. A virtual technical briefing with industry associations and individual companies was held on May 26, 2022, to provide an overview of the Biocides Fee Proposal and to respond to questions. A total of eight stakeholder submissions from three industry associations and five companies were received during the consultation period. Subsequent technical sessions were held on November 29 and December 14, 2022, as well as March 27, June 26-27, and July 11, 2023, with stakeholders to further clarify certain aspects of the proposed Biocides Regulations, including associated fees where applicable.

While there was support for the proposal overall, one stakeholder noted that Health Canada should ensure that appropriate assumptions and information are used when setting fees. Others raised concerns regarding data used in the costing methodology, certain fee categories, and future assessment of fees.

Costing methodology

Stakeholders raised concerns with the inclusion of 2020-21 data in the costing methodology. They suggested that data from that fiscal year be excluded in the calculation of fees due to the irregularities caused by the COVID-19 pandemic. One stakeholder indicated they did not support the inclusion of any assumed increase in pre-submission meetings as part of the calculation and wanted confirmation on whether application screening times are reflected in the proposed performance standards.

Health Canada considered whether costs associated with COVID-19 activities should be included within the calculation of fees. As part of the costing methodology, costs for other health product submissions making COVID-19 related claims and associated activities were excluded from the costing dataset, while costs for disinfectant applications making COVID-19 related claims in 2020-21 were included. Further analysis showed that overall there is no significant difference in the level of effort of review between COVID-19 related applications and non-COVID-19 applications, except for the ‘Labelling only (disinfectants)’ fee category, and that in most cases not including 2020-21 data would result in slightly higher average costs, which would lead to slightly higher fees. This category and its associated fee were introduced in 2020 and most of the applications that were received in 2020-21 were related to COVID-19. If these applications were to be removed from the costing, there would be no substantive data to cost the ‘Biocide comparison — labelling only’ fee. Health Canada considered the use of proxies and estimates to calculate the fee; however, in accordance with Treasury Board of Canada Secretariat’s (TBS) Guide to Cost Estimating, the Department seeks to use historical data whenever possible.

With respect to the right to sell fee, an analysis was undertaken to compare compliance verification data between 2020-21 with a three-year period from 2018-21. Due to the continued increase in demand for biocide products post-pandemic, the 2020-21 dataset was deemed to better represent expected volumes and level of review effort following the implementation of the Biocides Regulations than the 2018-21 period. As a result, only 2020-21 data was used to calculate the fee.

It should also be noted that the performance standards for the review of applications do not include time for initial administrative processing or screening of applications for completeness once received. If an application is accepted for review following these initial steps, then the review clock starts on the date of acceptance.

Finally, while the estimates included in the methodology underlying the CBA of the pre-published Biocides Regulations assumed an increase in requests for pre-submission meetings of 20% from the current volume, this possible increase in activity was not included in the estimation of fees.

Fee categories
Biocide full review – novel biocide

Stakeholders suggested that a tiered approach be taken for the ‘Biocide full review – novel biocide’ fee category, as they felt applications submitted in this category would require varying levels of effort of review and they wanted clarity regarding how the proposed fee was calculated.

Health Canada calculates fees based on the average of all applications in each fee category. Establishing a tiered approach is not feasible given the low number of applications included in the calculation of this fee category. A tiered approach is also inconsistent with the approach that is taken in other jurisdictions (e.g. United States Environmental Protection Agency). The cost of the proposed fee for novel biocide applications was based on all disinfectant new drug submission applications that were submitted under Division 8 of the FDR during the reference period. The existing fee category for disinfectants under Division 8 of the FDR is comparable to the ‘Biocide full review – novel biocide’ fee category with respect to the anticipated level of review effort. On average, a Division 8 application required 146.2 hours of review time in comparison to an average of 32.8 hours for a Division 1 application, which would be comparable to the ‘Biocide full review – tier I, II, III’ fee categories. Following the implementation of the Biocides Regulations and fees, should the volume of novel biocide applications significantly increase, Health Canada would re-examine whether it would be appropriate to create an additional tier.

Biocide full review — tier I, II, III

One stakeholder requested further analysis on how mandatory summary reports for safety, efficacy, and quality data would impact review times and costs for applications submitted under the ‘Biocide full review — tier I, II, III’ categories.

Health Canada did not include summary reports in the costing of these fee categories as these reports are currently submitted voluntarily and the Department has received too few reports and those submitted lack consistency in format/content to conduct a reliable analysis. Following the implementation of the Biocides Regulations, any differences in the level of effort attributable to mandatory summary reports will be reflected in future fee updates.

Biocide major change / Biocide minor change

Stakeholders wanted more information on how post-authorization changes were incorporated into the proposed fees, given that time tracking data was not available. They suggested that the cost of post-authorization categories be reviewed as many of the proposed costs may deviate from current practice and could increase burden to both industry and Health Canada. Regarding applications containing confirmatory data, they suggested that these be supported through the ‘Biocide major change — quality and risk’ category rather than the ‘Biocide full review — tier I, II, III’ categories, and that the fees associated should align with this approach. Stakeholders also mentioned that not all changes to authorized disinfectants are classified as full reviews under the disinfectant regime, contrary to what was presented in the Biocides Fee Proposal.

Health Canada based all costing for the ‘Biocide major change — quality and risks’ fee category on the definition of major change in the pre-published Biocides Regulations (i.e. the change is reasonably expected to have a major impact on the quality, risks, or associated uncertainties). Disinfectant full review applications that made no additional claims during the reference period were used to calculate costs as this was determined to be an appropriate proxy for this category. As the definition of major change in the Biocides Regulations still corresponds with this methodology, the associated fee will remain the same. The ‘Biocide major change — quality and risks’ fee will still be less than the larger fee for a full review charged to major change applications under the previous disinfectant regime. Regarding the ‘Biocide minor change’ fee category, as it is new, the costs of reviewing disinfectant post-DIN change applications were used as a proxy for the costing of the fee.

Health Canada acknowledges that there are currently several types of post-authorization changes that are not submitted as full reviews, and as part of the implementation of the Biocides Regulations, the Department will update its guidance documents to fully clarify, with examples, the types of post-authorization changes and review categories under the Biocides Regulations.

Biocide monograph/ Biocide comparison — administrative application

One stakeholder asked Health Canada to revisit the Biocides Fee Proposal in light of the estimates included in the methodology underlying the CBA for the pre-published Biocides Regulations to ensure an accurate and appropriate cost recovery framework. They noted that the CBA methodology estimated that direct costs to government for the ‘DIN application — labelling standards’ (Biocide monograph) fee category would increase slightly, while the ‘Administrative submission’ (Biocide comparison — administrative application) fee category was estimated to remain unchanged. However, the Biocides Fee Proposal indicated an increase of 55% for the ‘DIN application — labelling standards’ category and 105% for the ‘Administrative submission’ category. There was also a concern that the expedited review times and costs of ‘DIN application — labelling standards’ applications during the pandemic were included in the costing of the ‘Biocide monograph’ fee category. The same stakeholder did not support the rationale of increased clarification requests as a rationale for increased fees.

Health Canada’s costing method used to calculate fees differs significantly from the methodology underlying the CBA. The CBA projects the anticipated future cost to government of direct application review only, once the fees are implemented. The fee calculation relies on historical costs for applications that have already been reviewed by Health Canada and contains additional costs besides application review, using activity-based costing, in accordance with TBS’s Guide to Cost Estimating.

The proposed increase in fees was predominantly due to changes in unit costs for these applications, between the last fee update (based on 2013-17 data) and what was observed in the costing for biocides (based on 2017-21 data). The costing data in the 2017-21 dataset is more accurate than the 2013-17 dataset, largely due to increased time tracking compliance, which allows for a greater degree of confidence that unit costs are accurate; however, the COVID-19 pandemic had operational impacts on how ‘DIN application — labelling standards’ and ‘Administrative submission’ applications were reviewed by Health Canada. High application volumes led to more senior level reviewers conducting the review of these applications, leading to higher costs. Operational processes were adjusted in the fall of 2022 to ensure a consistent and appropriate level of reviewer is assigned to each application type. Given that 2022-2023 data is not included in the dataset, impacts of the adjusted process would not be reflected in the proposed fees. It is for this reason that Health Canada will maintain the existing fees for disinfectants from the current Fees Order for ‘DIN application — labelling standards’ (Biocide monograph) and ‘Administrative submission (Biocide comparison — administrative application)’ applications and only adjust for Consumer Price Index inflation. A projected increase in clarification requests was not included in the costing of the ‘Biocide monograph’ fee as there was no significant difference in the level of effort for ‘DIN application — labelling standards (Biocide monograph)’ or ‘Administrative submission (Biocide comparison — administrative application)’ applications reviewed prior to or during the pandemic.

Right to sell

Regarding the right to sell fee and associated costs for post-market surveillance, one stakeholder suggested that the specific regulatory differences between biocides and drugs were not accounted for and that the fee be adjusted to reflect a risk-based compliance approach.

Health Canada calculated the right to sell fee based on associated costs for activities related to the surveillance and monitoring of biocides, including incident monitoring and compliance verification (e.g. reactive inspections, handling recalls and complaints, border admissibility determinations, laboratory analyses). The level of risk that is inherent to biocides was taken into consideration and the fee set accordingly.

Transfer of surface sanitizers for use in food premises

One stakeholder commented that no fees should be charged for surface sanitizers for use in food premises transitioning to the framework. This would be in line with how existing surface sanitizers and disinfectants would be treated. Furthermore, they proposed these products should not be subject to an annual right to sell fee.

Health Canada has introduced a six-year transition period for surface sanitizers for use in food premises to provide stakeholders more time to come into compliance with the Biocides Regulations. However, applicants will be required to submit an application under one of the regular review categories and pay the associated fee. An abbreviated application, without an associated fee, is unavailable for these biocides because a comprehensive assessment by Health Canada must be undertaken for safety, efficacy, and quality. Companies selling these products will also be subject to a right to sell fee given that these products will be within scope of post-market surveillance and compliance and enforcement activities conducted by Health Canada.

Future assessment of fees

Health Canada was asked to assess future costs related to the ‘Biocide — use of foreign decisions’ category and the ‘Biocide comparison — labelling only’ category (as data becomes available) to ensure that fees reflect the actual level of effort for such reviews.

TBS recommends reviewing all fees at least every five years, and that the adjustment of fees be based on an analysis of the most recent data available. Health Canada’s periodic review of its fees for drugs and medical devices is in alignment with TBS’s recommendation. Fees for biocides will be included in these periodic reviews.

Modern treaty obligations and Indigenous engagement and consultation

No impact on modern treaty obligations has been identified for these amendments to the Fees Order.

Instrument choice

The Fees Order is the most suitable instrument for the fixing of fees for regulatory activities under the Biocides Regulations, as it is the instrument that Health Canada uses to fix fees for health products regulated under the FDA. Fees cannot be fixed under the Pest Control Products Fees and Charges Regulations as the authority for setting fees under those Regulations comes from the PCPA. The Fees Order adheres to accountability principles and the Minister of Health has consulted stakeholders prior to fixing fees, as required.

Regulatory analysis

Benefits and costs

Under the PCPA and FDA frameworks, fees were charged for surface sanitizers and disinfectants respectively, so companies marketing authorized disinfectants and surface sanitizers are familiar with paying fees for the services that Health Canada provides to industry. If companies continue selling their previously authorized products as biocides, they will not be charged fees to transfer these products to the Biocides Regulations as long as they submit a transition application. However, companies using a transition application will need to obtain a market authorization under the Biocides Regulations during the four-year transition period and will still be subject to the right to sell fee.

Furthermore, a number of companies that sell surface sanitizers for use in food premises included in the scope of the Biocides Regulations may not have previously paid fees, and subsequently, there may be some additional costs incurred by these businesses related to learning the application process, in addition to the new fees paid.

The cost to industry resulting from fees is balanced with equivalent savings to Canadian taxpayers creating a net $0 present value. The benefits and costs are related to the Biocides Regulations and not to the Fees Order itself.

Small business lens

The small business mitigation approach that is taken for drugs and medical devices is being maintained for biocides to ensure consistency across health product lines. Mitigation measures for qualifying small businesses (fewer than 100 employees or between $30,000 and $5 million in gross annual revenue, including its affiliates) will include:

Remissions for missed performance standards will also apply in a case where a business has already received a small business remission.

One-for-one rule

The amendments to the Fees Order have no impact on administrative burden costs.

Regulatory cooperation and alignment

The amendments to the Fees Order are not related to a work plan or commitment under a formal regulatory cooperation forum.

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 impacts have been identified for this proposal.

Rationale

The Biocides Regulations provide a harmonized authorization framework that is tailored to the benefits and risks associated with biocides. A single framework has been advocated by the biocide industry as a means of improving efficiency in the regulatory process. The increase in demand for biocides by Canadians during the COVID-19 pandemic highlighted the challenges with how Health Canada currently regulates these products and the need for a more agile licensing and regulatory framework that is specific to biocides. The Biocides Regulations align with the intent of the Health and Biosciences Sectoral Regulatory Review Roadmap to create integrated, risk-based approaches to regulating product categories and services and will improve regulatory predictability for industry. The Biocides Regulations will also facilitate and maintain access to the supply of biocides for Canadians. The amendments to the Fees Order will allow Health Canada to support biocides regulatory activities and provide reliable service to industry while continuing to serve the interests of Canadians.

Implementation and performance standards

Forms and webpages will be updated to reflect the revisions to the Fees Order. The Performance Standards for the Fees in Respect of Drugs and Medical Devices Order will be updated to include performance standards for biocide fees.

Contact

Bruno Rodrigue
Executive Director
Office of Legislative and Regulatory Modernization
Policy, Planning and International Affairs Directorate
Health Products and Food Branch
Health Canada
Holland Cross, Suite P2108
11 Holland Avenue
Ottawa, Ontario
K1A 0K9
Address locator: 3000A
Email: lrm.consultations-mlr@hc-sc.gc.ca