Bill S-5 On Vaping: Most Impacts For Manufacturers & Distributors, Not Retailers

With governments, it’s always the same: why make it simple when it can be so complicated?

The electronic cigarettes’ changing regulatory framework is not easy to follow. Two years after Quebec’s Bill to this effect, Ottawa is about to legislate. What to expect?

DepQuébec here reviews the impacts of the upcoming federal legislation for convenience stores.

 

What was the regulatory framework before governments started enacting e-cig legislations (2005-2015)?

The electronic cigarette was invented in China in 2004 and as of 2007, it began to appear in Canada.

In the absence of specific regulations, this product was initially ruled by existing ones.

The most problematic aspects were the presence of nicotine and the health claims made by some manufacturers, such as its potential benefits as an aid for smoking cessation. All of these aspects are severely ruled by Canada’s Food and Drugs Act.

For nicotine, Health Canada must authorize any products before they can be sold, based on evidence of their safety, quality and efficacy. However, since no manufacturer has submitted any product, none has been authorized, so that the marketing and sale of electronic cigarettes (and vaporized liquid) containing nicotine or displaying health claims have always been illegal purely by default.

For the rest, i.e. electronic cigarettes without nicotine and without a health claim, they could be legally sold without authorization from Health Canada but remained subject to Canada’s Consumer Product Safety Act.

How has the market behaved?

In such a free business environment, markets have kind of exploded: the e-cig offer has multiplied and they have quickly spread to various types of outlets from depanneurs to specialty shops (vapor shop), souvenir boutiques and on the Internet. The products could be displayed freely and there was no restriction on the age of purchase: a 10-year-old child could buy them without any hassle.

In addition, given the low level of control over nicotine products and the fact that they were readily available on the net, e-cig refills containing nicotine were quite available and easy to obtain, thus sold illegally, knowingly or not.

Health Canada said it acted on the basis of complaints received and identified the risks involved. It has carried out on-site inspections, sending warning letters, requests to stop selling and so on. The organization has monitored the sale of these products as well as retailers and websites that do not follow the rules.

What are the governments’ main concerns about e-cigarettes?

Started from scratch about 13 years ago, the e-cig market has steadily gained in sales, volume and popularity. It is now estimated that more than 2.5 million Canadians consume it.

Although most scientists believe that it is less harmful than tobacco, some argue that caution should be exercised until its long-term effects are known, while others declare it to be completely harmless. To this must be added questions relating to its delicate relationship with tobacco: is it more a gateway to or exit from tobacco? Nothing is quite clearly established in this matter except one thing: the product is most certainly less harmful than tobacco.

It may take many more years to be able to answer these questions with certainty, but in the meantime, governments are under pressure to regulate this product according to the perceived risks and benefits of electronic cigarettes, namely:

  • the potential health risks to individuals who use e-cigarettes;
  • risks to bystanders;
  • that e cigarettes may be less harmful than other nicotine products;
  • that e cigarettes may be helpful with smoking cessation;
  • that e-cigarettes could have a ”gateway effect,” meaning that children and non-smokers might start using e-cigarettes and then progress to smoking cigarettes; and
  • that e-cigarettes could renormalize tobacco use, including smoking.
How did Quebec legislate in 2015 and what did it change?

In 2015, Quebec introduced a regulatory framework through Bill 44. Broadly speaking, electronic cigarettes and all other devices of the same nature, including their components and accessories, were subject to same rules as tobacco products, namely:

  • Prohibition of sale to minors;
  • Prohibition of consumption like tobacco (no vaping on restaurant’s terraces, in offices and others);
  • Obligation for convenience stores to conceal the product and its accessories from customers.

On the other hand, some provisions remained more flexible than tobacco:

  • Possibility of opening specialty shops (vape shop), but where minors are not allowed to get in (these boutiques will then be able to openly display the products to customers);
  • Possibility of selling flavors (tasteless electronic cigarettes would make no sense);
  • Possibility of advertising in newspapers and magazines whose readership is 85% adult but along with a regulatory health warning.

Of course, electronic cigarettes are not subject to the 75% tax on tobacco, but only at the regular GST and PST taxes.

In short, this legislation brought several restrictions to the sale of these products within convenience stores, as it is no longer possible to display and promote them in-store.

What are the federal government intentions now?

Bill S-5 will first and foremost put an end to the current regulatory no man’s land by legalizing the sale of vaporized liquid containing nicotine, but according to very strict regulatory standards established by Health Canada bureaucrats. This will be part of a new legislative and regulatory framework for the sale of vaping products, with some provisions that are recouping those already adopted by Quebec. The proposed Bill:

  • prohibits the sale of vaping products (as defined in the bill) to minors, including sending a vaping product to a minor;
  • establishes by regulation new standards for the manufacture, content and safety of vaping products;
  • prohibits the promotion of vaping products containing flavours that appeal to youth (like bubble gum for instance);
  • requires manufacturers to submit information about a vaping product to the Minister of Health before the product can be sold;
  • restricts advertising of vaping products;

Regarding promotion and advertising, it will be prohibited under the new Bill to:

  • use testimonials and endorsements to promote vaping products;
  • promote a vaping product (including by way of packaging) in a way that suggests its use would have a health benefit;
  • promote a vaping product (including by way of packaging) by comparing its effects on health to tobacco’s effects on health, unless it has an authorization under the Food and Drugs Act;
  • package or sell a vaping product that is packaged contrary to the Tobacco and Vaping Products Act or regulations;
  • display information or images on a vaping product or its package that suggest that the product is flavoured, if the information or images could appeal to young people, or selling a product carrying such information or images (new section 30.46);
Among Bill S-5 many provisions, those that prevent manufacturers from promoting e-cig potential health benefits versus tobacco have enraged some like Sherwin Hal Edwards, CEO of Vap Select, a Quebec-based importer and distributor located in Mirabel who intends to fight tooth and nail against the proposed Bill. The Canadian government’s cautious attitude to the opportunity presented by this healthier alternative to tobacco is believed to be the result of a narrow-minded view that will end up being more harmful than useful to the public health.

All in all, the federal government considers that there are still significant risks to vaping – if only to indirectly promote tobacco use – and wishes to keep this product away from young people, while maintaining a certain “openness” to the benefits it can bring to help smokers quit. But as such, the government is making an overly cautious choice that may slow down the popularity of a product with real potential benefits.

This vision is certainly a disappointment for people like Sherwin Hal Edwards, CEO of Vap Select (see photo), who strongly believe that vaping is harmless, has only merits and should not be restricted from being consumed in public places like bars and restaurants, since its vapor does not bother anyone. These people also argue that other countries, such as the United Kingdom in particular, have adopted much more liberal legislations to take advantage of the product health benefits.

And with respect to the federal Bill, it is primarily the manufacturers and distributors that will be affected: it will require them to provide product information to Health Canada, to meet manufacturing, content and safety standards and to comply with new restrictions on promotion.

With respect to retailers, the bulk of the measures are already in place, namely: no selling to minors and a product display ban to customers.

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