Canada Gazette, Part I, Volume 150, Number 50: Regulations Amending the Pest Control Products Regulations (Statement, Notice and Conditional Registration)

December 10, 2016

Statutory authority

Pest Control Products Act

Sponsoring department

Department of Health

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Import and use of foreign products

The current wording of the import and foreign use provisions in the Pest Control Products Regulations (PCPRs) allow foreign products to be stored without the approved foreign use label (which includes required handling, safety and use information) affixed, as long as the label is affixed to the product before use. However, storing a foreign product without the approved foreign use label (which is equivalent to the label approved by the Pest Management Regulatory Agency [PMRA] for the equivalent Canadian- registered product) can result in unsafe or improper handling or use.

Notice to user

The PCPRs currently require that the labels of pest control products include a notice to user stating that the user assumes the risk to persons or property that arises from use or handling of the product. The Standing Joint Committee for the Scrutiny of Regulations (SJCSR) considers that the wording in the notice to users affects rights between private parties, and that the current Pest Control Products Act (PCPA) does not provide the enabling authority to impose such civil liability.

Guarantee statement

The PCPRs currently require that the labels of pest control products include a guarantee statement regarding the active ingredients that the product contains. The SJCSR considers that the word “guarantee” affects the liability of registrants if there is a discrepancy between the ingredients and the label, and that the current PCPA does not provide enabling authority to impose such civil liability.

Data protection (arbitrator liability)

The SJCSR raised a concern that while the arbitrator/ arbitral tribunal is required to meet the 120-day timeline for issuing an arbitral award set out in subsection 17.91(4) of the PCPRs, he or she may not be able to comply due to circumstances beyond his or her control, which creates a potentially unfulfillable obligation. For example, one or both of the parties to the arbitration may fail to cooperate sufficiently so that a decision can be made within the required time period.

Conditional registrations

Both the Standing Committee on Health (during the statutory review of the PCPA in 2015) and the Commissioner of the Environment and Sustainable Development (CESD) audit (2016) raised concerns regarding the number of conditional registrations and the length of time some registrations have remained conditional. Non-governmental organizations have also raised concerns about the fact that conditional registrations delay the PCPA's transparency and reconsideration of decision provisions until after the product has been conditionally registered for use.

Background

Import and use of foreign products

Under the PCPA, the Minister has the authority to allow the use of unregistered pest control products, provided the use of such products poses no unacceptable health or environmental risks. Using this authority, provisions in the PCPRs allow the importation of a foreign product, exempt from Canadian registration requirements, provided it is determined to be equivalent to a Canadian- registered product and has an equivalent label. These provisions enabled the establishment in 1993 of the Own-Use Import Program, a price-discipline mechanism for the Canadian pesticide industry that provided Canadian users with access to lower-priced equivalent foreign products.

The current import and use of foreign products provisions in the PCPRs state that the approved foreign use label must be affixed to each container of foreign products, as soon as practicable after the importation of the product but in any case before its use.

Notice to user

Beginning in 1972, when a seller's guarantee was added to the PCPRs, registered pest control product labels could include an optional statement that the buyer or user “assumes the risk to persons or property that arises from use or handling of this product.” When the seller's guarantee was removed from the PCPRs in 2006, this statement was added to the “notice to user” provision of the PCPRs, and its inclusion on pest control product labels became mandatory.

Guarantee statement

The requirement to include the word “guarantee” followed by the common chemical name and concentration of the active ingredient on the label of a registered pest control product was introduced in 1927. This labelling requirement is still part of the current PCPRs, and its intent is to inform the user of the active ingredient that the pest control product contains.

Data protection (arbitrator liability)

The data protection provisions (section 17) of the PCPRs came into force on June 3, 2010 (SOR/2010-119). The objectives of these provisions are to encourage the registration of new innovative pest control products; facilitate timely entry onto the market of competitively priced generic pest control products; and ultimately benefit pest control product users. The wording currently indicates that an arbitral award must be made within 120 days after delivery of the notice, unless the parties agree to an extension.

Conditional registrations

The Minister of Health's primary objective under the PCPA is to prevent unacceptable risks to human health and the environment from the use of pest control products. To meet this objective, the PCPA requires the Minister of Health to conduct pre-market assessments of pest control products to determine whether their health and environmental risks and value are acceptable for registration, which would authorize the product to be imported, distributed and used in Canada.

A registration becomes a “conditional registration” if, at the time a product is registered or a registration is amended, the applicant is required to provide additional information with respect to the product's effect on human health and safety or the environment or with respect to its value.

Thus, while a conditional registration may only be granted following a finding of acceptable risk, it includes a requirement for the registrant to provide additional information within a set time period. The nature of this additional information varies. For example, the information required may be related to future environmental monitoring data or chemistry data from actual industrial scale production (e.g. to confirm the results of models used during the pre-market risk assessment).

Conditional registrations differ from “full” registrations in three ways: the validity period is three years instead of five; there are additional data requirements at the time of registration (as described above); and the transparency (i.e. consultations and information access) provisions and ability of the public to file a “notice of objection” asking for a reconsideration of the decision are delayed until a decision is made to either amend the registration or renew the conditional registration, whichever occurs first.

Both the Standing Committee on Health (2015) and the CESD audit (2016) raised concerns regarding the number of conditional registrations and the length of time some registrations have remained conditional. To be consistent with Health Canada's Regulatory Transparency and Openness Framework and to take into account issues raised regarding conditional registrations, the PMRA decided to discontinue the granting of new conditional registrations.

With the publication on June 1, 2016, of the Final Decision Regarding Conditional Registrations under the Pest Control Products Regulations, new conditional registrations are no longer being granted as a matter of policy. As a result, the transparency and reconsideration provisions of the registration process will no longer be delayed for new registration decisions. Stakeholders had the opportunity to provide comments on this policy with the publication of the Notice of Intent Regarding Conditional Registrations under the Pest Control Products Regulations (January 2016).

Objectives

The proposed amendments would have the following objectives:

• To prevent possible unsafe or improper handling or use of unregistered foreign products imported via the import and use of foreign products provisions;
• To address the SJCSR's concerns regarding registrant, user and arbitrator liability; and
• To entrench the policy intent to no longer grant new conditional registrations and ensure the transparency (consultation and access to information) and reconsideration provisions of the PCPRs apply to all new registration decisions.

Description

1. Import and use of foreign products
   • Subparagraph 42(1)(d)(i) of the PCPRs would be amended to state that the approved foreign product use label must be affixed to each container imported as soon as practicable after entering Canada and no later than upon its arrival at the location of use or storage. This will help ensure that the product is properly labelled before its use and that the product could not be stored legally without the approved foreign product use label (which includes the required safety and use information) attached, if it is not used immediately (therefore helping to prevent improper or unsafe handling or use).
2. Guarantee statement and notice to user
   • The PCPRs would be amended to replace the word “guarantee” with the words “active ingredient” (subparagraph 26(1)(h)(i) and Schedule 2, table to section 6), which more accurately describe the information required on the label and are therefore more consistent with the policy objective of the requirement (i.e. informing the user about the active ingredient contained in the pest control product).
   • The PCPRs would also be amended to remove the last sentence from paragraph 26(2)(g), namely, “The user assumes the risk to persons or property that arises from any such use of this product,” which appears on all product labels. The SJCSR considered that even if this statement was only intended to be a warning, it nonetheless appeared to set out a conclusion with respect to common law principles concerning liability and may be interpreted as imposing civil liability on a user of a registered product. This statement is not required to achieve the objectives of the PCPA.
   • The cost associated with amending product labels would be mitigated by allowing registrants to amend their labels the next time their labels are amended or the next time the labels are reprinted but no later than 10 years from the time the Regulations are made. In addition, labels that had already been printed before the coming into force of these amendments could continue to be used during the 10-year implementation period (i.e. if the labels are not amended during that period). No products would be required to be over-stickered with the new labels (i.e. products on store shelves would not need to be relabelled). Products registered after these proposed amendments come into effect would need to comply with the new labelling requirements immediately.
3. Data protection (arbitrator liability)
   • Subsection 17.91(4) would be amended to also allow the arbitrator to extend the 120-day time period during which an arbitral award must be made (similar to the parties' ability to agree to an extension, which is already in the Regulations), upon notifying the parties.
4. Conditional registrations
   • To entrench the PMRA's policy intent to no longer grant new conditional registrations, the conditional registration provisions of the PCPRs (sections 14 and 15 and the relevant provisions of section 16) would be repealed.
   • Subsections 14(6) and (7) of the conditional registration provisions would continue to be in effect for products that are currently conditionally registered. Subsection 14(6) allows the validity period of the conditional registration to be automatically extended by two years when the data is received to give the PMRA time to review the data. Subsection 16(7) allows the validity period of the conditional registrations to be extended to allow public consultation on the proposed decision. This would allow the existing conditional registrations to remain in effect until a decision is made.

“One-for-One” Rule

The “One-for-One” Rule does not apply to these proposed amendments as there is not expected to be an increased burden on businesses.

Small business lens

The small business lens applies to regulatory proposals that impact small business and that have nationwide cost impacts of over $1 million annually. The small business lens does not apply to these proposed amendments as the small costs (i.e. related to label amendments) associated with the proposed amendments are well below the $1 million threshold.

Consultation

The main Canadian industry associations for pest control product manufacturers were consulted on the proposed amendments in fall 2016. Neither expressed any major concerns with the proposal.

Rationale

Benefits

The proposed amendments would

• address SJCSR concerns and remove any potential liability from registrants (by changing “guarantee” to “active ingredient”), pesticide users (by removing the last sentence of the notice to users) and arbitrators (by removing a potentially unfulfillable obligation and allowing them to extend the arbitration period), which Health Canada did not intend to impose;
• help to protect health, safety and the environment by reducing the likelihood of improper or unsafe handling or use by providing clarity around the timing of labelling of imported foreign products (as currently the products could be stored legally without the approved labels, which bear the relevant handling, safety and use information); and
• entrench the policy decision to no longer grant new conditional registrations (by repealing the conditional registration provisions in the PCPRs), thereby ensuring that the transparency and reconsideration of decisions provisions of the PCPA apply to all new registration decisions.

Costs

The proposed amendments to the guarantee statement and notice to user would result in the need to change the approved labels of all registered products.

However, the costs to registrants (printing new labels) and the PMRA (administration of amendments) associated with amending product labels would be almost fully mitigated for most registrants due to the fact that the proposed Regulations would provide a transitional period requiring registrants to implement the change either the next time the label is amended (i.e. for any other reason) or when the label is reprinted, but no later than 10 years from the time the Regulations are made. Products registered after the Regulations come into effect would need to comply with the new labelling requirements immediately. However, labels that had already been printed for a registered pest control product before the coming into force of these amendments could continue to be used during the 10-year implementation period (i.e. if they were not amended or reprinted during that period). No products would be required to be over-stickered with the new labels (i.e. products on store shelves would not need to be relabelled).

For example, if the label amendments required under the proposed amendments were made the next time another label amendment was made, there would be almost no incremental costs to the registrant: the registrant would already be paying the costs associated with printing new labels as a result of the other label amendment.

Of registered products that may not otherwise have to have their labels amended within the 10-year implementation time frame (expected to be approximately 4.6% of registered products), the cost of implementing the Regulations would be limited to arranging to make minor changes to their labels (approximately $7,308 total one-time costs over the 10-year period).

Finally, there would be a small cost to the PMRA to administer the label amendments. However, for amendments made in combination with other label changes, there would be no incremental cost to business or the PMRA.

The other proposed amendments (import and use of foreign products; data protection — arbitrator liability; and repeal of the conditional registration provisions) would not impose any new costs on regulated parties or Health Canada.

Implementation, enforcement and service standards

The PMRA would seek to increase regulated parties' awareness of the new requirements though its existing communications and outreach mechanisms. For the proposed amendments that require label amendments, the PMRA would track implementation and identify any labels that had not been amended during the 10-year transitional period; this would be done via the PMRA's existing registration and compliance and enforcement programs. The proposed amendments would come into force six months after the Regulations are published in the Canada Gazette, Part II.

Contact

Jordan Hancey
Health Canada
Pest Management Regulatory Agency
Policy, Communications and Regulatory Affairs Directorate
2720 Riverside Drive
Ottawa, Ontario
K1A 0K9
Email: pmra.regulatory.affairs-affaires.reglementaires.arla@hc-sc.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to section 67 of the Pest Control Products Act (see footnote a), proposes to make the annexed Regulations Amending the Pest Control Products Regulations (Statement, Notice and Conditional Registration).

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Jordan Hancey, Manager, Policy Development, Regulatory Affairs Section, Policy and Regulatory Affairs Division, Policy, Communications, and Regulatory Affairs Directorate, Pest Management Regulatory Agency, Department of Health, Address Locator: 6607, 2720 Riverside Drive, Ottawa, Ontario K1A 0K9 (fax: 613-736-3659; email: pmra.regulatory.affairs-affaires.reglementaires.arla@hc-sc.gc.ca).

Ottawa, December 1, 2016

Jurica Čapkun
Assistant Clerk of the Privy Council

Regulations Amending the Pest Control Products Regulations (Statement, Notice and Conditional Registration)

Amendments

1 The definition conditional registration in subsection 1(1) of the Pest Control Products Regulations (see footnote 1) is repealed.

2 Paragraph 6(1)(j) of the Regulations is replaced by the following:

• (j) the statement described in paragraph 26(1)(h).

3 Section 13 of the Regulations is replaced by the following:

Maximum validity period

13 The validity period of a registration of a pest control product must end no later than December 31 in the fifth year after the year in which the product is registered.

4 The heading before section 14 and sections 14 and 15 of the Regulations are repealed.

5 Section 16 of the Regulations is replaced by the following:

Five-year periods

16 (1) The registration of a pest control product may be renewed, on application by the registrant to the Minister, for additional periods of not more than five years each.

Renewal applications

(2) An application to renew the registration of a pest control product must be accompanied by the following:

• (a) the information required by subsection 6(1);
• (b) the statement required by subsection 6(3);
• (c) the information required by section 8; and
• (d) in the case of a registration certificate that was issued in the circumstances described in sections 17.7 to 17.94, a copy of the valid letter of access, as defined in section 17.1.

Request — labels

(3) The registrant must, if requested by the Minister, provide the Minister with an electronic copy of the approved label and two hard copies of the marketplace label.

6 Subsection 17.91(4) of the Regulations is replaced by the following:

Arbitral award

(4) An arbitral award must be made within 120 days after delivery of the notice, unless

• (a) the parties agree to an extension of that period; or
• (b) the arbitrator provides written notice to the parties, before the end of that period, that the period has been extended.
  

7 (1) The portion of paragraph 26(1)(h) of the Regulations before subparagraph (ii) is replaced by the following:

• (h) a statement, as follows:
  • (i) the words “ACTIVE INGREDIENT”, followed by a colon,

(2) Paragraph 26(2)(g) of the Regulations is replaced by the following:

• (g) the following notice to users: “NOTICE TO USER: This pest control product is to be used only in accordance with the directions on the label. It is an offence under the Pest Control Products Act to use this product in a way that is inconsistent with the directions on the label.”

8 (1) Paragraph 42(1)(b) of the French version of the Regulations is replaced by the following:

• b) elle achète le produit directement d'une source étrangère sans l'intervention d'un mandataire;

(2) Subparagraph 42(1)(d)(i) of the Regulations is replaced by the following:

• (i) affixes to each container of the foreign product, as soon as practicable after the importation of the product but in any case no later than upon its arrival either at the location of storage, or at the location of use specified in the foreign product use certificate, a copy of the approved foreign product use label in a way that the product identifier that relates to its registration outside Canada remains visible at all times, and

(3) The portion of subsection 42(3) of the Regulations before paragraph (a) is replaced by the following:

Transport

(3) The person who transports the foreign product into Canada must carry it to either the location of storage, or the location of use specified in the foreign product use certificate, and have the following documents in their possession:

9 Section 73 of the Regulations and the heading before it are repealed.

10 The portion of item 1 before paragraph (b) of the table to section 6 of Schedule 2 to the Regulations is replaced by the following:

1 The following statement:

(a) the words “ACTIVE INGREDIENT”, followed by a colon;

Transitional Provisions

11 (1) In this section, former Regulations means the Pest Control Products Regulations as they read immediately before the day on which these Regulations come into force.

(2) The validity period of a conditional registration that is in effect before the coming into force of these Regulations continues to be in effect until the end of that period.

(3) The validity period of a conditional registration that continues to be in effect after the coming into force of these Regulations may be extended under subsection 14(6) or (7) of the former Regulations.

12 The requirements in these Regulations repecting the information that must be shown on the label of a pest control product do not apply until the day on which the first of the following occurs:

• (a) the registration of the pest control product, if it occurs on or after the day on which these Regulations come into force,
• (b) the reprinting of the label,
• (c) the modification of the information on the label, or
• (d) the manufacture of the pest control product, if it occurs on or after the tenth anniversary of the day on which these Regulations come into force.

Coming into Force

13 These Regulations come into force on the day that, in the sixth month after the month in which they are published in the Canada Gazette, Part II, has the same calendar number as the day on which they are published or, if that sixth month has no day with that number, the last day of that sixth month.

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