Regulations Amending Certain Regulations Concerning the Disclosure of Cosmetic Ingredients: SOR/2024-63

Canada Gazette, Part II, Volume 158, Number 9

Registration
SOR/2024-63 April 12, 2024

FOOD AND DRUGS ACT
CANNABIS ACT

P.C. 2024-316 April 12, 2024

Her Excellency the Governor General in Council, on the recommendation of the Minister of Health, makes the annexed Regulations Amending Certain Regulations Concerning the Disclosure of Cosmetic Ingredients under subsection 30(1)footnote a of the Food and Drugs Act footnote b and subsection 139(1) of the Cannabis Act footnote c.

Regulations Amending Certain Regulations Concerning the Disclosure of Cosmetic Ingredients

Food and Drugs Act

Cosmetic Regulations

1 (1) The portion of subsection 2(1) of the Cosmetic Regulations footnote 1 before the first definition is replaced by the following:

2 (1) The following definitions apply in these Regulations.

(2) The definition ICI Dictionary in subsection 2(1) of the Regulations is repealed.

(3) The definitions INCI name, inner label, manufacturer, practitioner and prescription in subsection 2(1) of the Regulations are replaced by the following:

INCI name
means the International Nomenclature Cosmetic Ingredient name assigned to an ingredient in the International Cosmetic Ingredient Dictionary and Handbook published by the Personal Care Products Council on its website, as amended from time to time. (appellation INCI)
inner label
means a label on or affixed to the immediate container of a cosmetic. (étiquette intérieure)
manufacturer,
in respect of a cosmetic, means one of the following persons:
  • (a) a person in Canada who sells the cosmetic under the person’s own name or under a trademark, design, trade name or other name or mark owned or controlled by the person; or
  • (b) a person in Canada who is authorized to act in Canada on behalf of another person who is not in Canada, if the other person sells the cosmetic under the other person’s own name or under a trademark, design, trade name or other name or mark owned or controlled by the other person. (fabricant)
practitioner
means a person who is registered and licensed under the laws of a province to practise the profession of medicine in that province. (praticien)
prescription
means a direction given by a practitioner. (ordonnance)

(4) The definitions Act, botanical, child-resistant container, flame projection, flashback, ingredient, official method, ornamental container, outer label and principal display panel in subsection 2(1) of the English version of the Regulations are replaced by the following:

Act
means the Food and Drugs Act. (Loi)
botanical
means an ingredient that is directly derived from a plant and that has not been chemically modified before it is used in the preparation of a cosmetic. (substance végétale)
child-resistant container
has the same meaning as in section 2 of the Consumer Chemicals and Containers Regulations, as they read on September 30, 2001. (contenant protège-enfants)
flame projection
means the ability of the pressurized contents of an aerosol container to ignite and the length of that ignition, when tested in accordance with official method DO-30, Determination of Flame Projection, dated October 15, 1981. (projection de flamme)
flashback
means that part of the flame projection that extends from its point of ignition back to the aerosol container when tested in accordance with official method DO-30, Determination of Flame Projection, dated October 15, 1981. (retour de flamme)
ingredient
means any substance that is one of the components of a cosmetic and includes colouring agents, botanicals, fragrance and flavour, but does not include substances that are used in the preparation of the cosmetic but that are not present in the final product as a result of the chemical process. (ingrédient)
official method
means a method of analysis or examination designated as such by the Minister for use in the administration of the Act and these Regulations. (méthode officielle)
ornamental container
means a container that, except on the bottom, does not have any promotional or advertising material on it other than a trademark or common name, and that appears to be a decorative ornament because of a design that is on its surface or because of its shape or texture, and is sold as a decorative ornament in addition to being sold as the container of a cosmetic. (contenant décoratif)
outer label
means a label on or affixed to the outside package of a cosmetic. (étiquette extérieure)
principal display panel
has the same meaning as in the Consumer Packaging and Labelling Regulations. (espace principal)

(5) The definition emballage de sécurité in subsection 2(1) of the French version of the Regulations is replaced by the following:

emballage de sécurité
Emballage doté d’un dispositif de sûreté qui offre au consommateur une assurance raisonnable que l’emballage n’a pas été ouvert avant l’achat. (security package)

(6) Subsection 2(1) of the Regulations is amended by adding the following in alphabetical order:

importer
means a person who imports a cosmetic into Canada for the purpose of selling it. (importateur)
leave-on product
means any cosmetic that is intended to stay in prolonged contact with the skin, hair or mucous membranes. (produit sans rinçage)
rinse-off product
means any cosmetic that is intended to be removed after application to the skin, hair or mucous membranes. (produit à rincer)

2 The Regulations are amended by adding the following after section 2:

Application

2.1 If, in respect of a cosmetic, no person meets the definition manufacturer, a reference in these Regulations to “manufacturer” is to be read as a reference to:

3 The Regulations are amended by adding the following after section 15.2:

15.3 (1) A person must not sell a cosmetic after the 10-day period beginning on the day on which the manufacturer or importer first sells that cosmetic if the Minister has not been provided with the documents required under subsection 30(1).

(2) A person must not sell a cosmetic after the 10-day period referred to in paragraph 31(1)(a) unless the Minister has been provided with a revised notification, document or information.

(3) If the Minister requests additional information under paragraph 31(1)(b) respecting a cosmetic, and the manufacturer or importer has not provided it, a person must not sell the cosmetic after the 10-day period beginning on the day on which the Minister requests the additional information.

4 The portion of section 20 of the Regulations before paragraph (b) is replaced by the following:

20 Subject to these Regulations, a person must not sell a cosmetic unless its inner label contains

5 Subsection 21.2(4) of the Regulations is replaced by the following:

(4) An ingredient that is included in the schedule may be listed

6 (1) Subsection 21.4(1) of the Regulations is replaced by the following:

21.4 (0.1) The following definitions apply in this section.

European Restricted Substances List
means Annex III, titled List of Substances Which Cosmetic Products Must Not Contain Except Subject To The Restrictions Laid Down, of Regulation (EC) No. 1223/2009 of the European Parliament and of the Council of 30 November 2009 on cosmetic products, published by the European Union on its website, as amended from time to time. (Liste européenne de substances à usage restreint)
fragrance allergen
means a fragrance or flavour that can cause an allergic reaction and that is included in the European Restricted Substances List and for which the restrictions set out in column h of that list provide that its presence must be indicated in a cosmetic’s list of ingredients. (allergène de parfum)

(1) Subject to subsections (2) to (4), ingredients must be listed in descending order of predominance, in their concentration by weight.

(2) Subsection 21.4(3) of the Regulations is replaced by the following:

(3) In the case of fragrance and flavour, other than fragrance allergens, the words “parfum” and “aroma”, respectively, may be inserted at the end of the list of ingredients to indicate that such ingredients have been added to the cosmetic to produce or to mask a particular odour or flavour.

(4) A fragrance allergen must be listed if

(5) Despite subsection (4), a fragrance allergen is not required to be listed in a cosmetic’s list of ingredients before the later of

7 Subsection 21.5(1) of the Regulations is replaced by the following:

21.5 (1) Despite subsection 21.2(1), in the case of a cosmetic whose immediate container or outside package is too small for the label to comply with paragraph 18(b), the list of ingredients may appear

8 Section 29 of the Regulations is replaced by the following:

29 (1) The Minister may request in writing that a manufacturer or importer submit to the Minister, on or before a specified day, evidence to establish the safety of a cosmetic under the recommended or the normal conditions of use.

(2) A manufacturer or importer who does not submit the evidence requested under subsection (1) must cease to sell the cosmetic on the day after the day specified in the request.

(3) If the Minister determines that the evidence submitted by a manufacturer or importer under subsection (1) is not sufficient, the Minister must notify the manufacturer or importer in writing to that effect, and the manufacturer or importer must cease to sell the cosmetic until the manufacturer or importer

9 (1) The portion of subsection 30(1) of the French version of the Regulations before paragraph (a) is replaced by the following:

30 (1) Le fabricant ou l’importateur remet au ministre, dans les dix jours suivant la vente initiale d’un cosmétique par le fabricant ou l’importateur, les documents suivants :

(2) Paragraph 30(2)(a) of the Regulations is replaced by the following:

(3) Paragraphs 30(2)(c) and (d) of the Regulations are replaced by the following:

(4) Paragraphs 30(2)(f) and (g) of the Regulations are replaced by the following:

(5) The table to section 30 of the Regulations is replaced by the following:

TABLE
Item

Column 1

Concentration Range

Column 2

Corresponding Number
1 More than 80%, up to 100% 1
2 More than 65%, but not more than 80% 2
3 More than 50%, but not more than 65% 3
4 More than 40%, but not more than 50% 4
5 More than 30%, but not more than 40% 5
6 More than 20%, but not more than 30% 6
7 More than 10%, but not more than 20% 7
8 More than 3%, but not more than 10% 8
9 More than 1%, but not more than 3% 9
10 More than 0.3%, but not more than 1% 10
11 More than 0.1%, but not more than 0.3% 11
12 More than 0.001%, but not more than 0.1% 12
13 More than 0%, but not more than 0.001% 13

10 Section 31 of the Regulations is replaced by the following:

31 (1) A manufacturer or importer who has provided the Minister with a notification under section 30 must

(2) For the purposes of paragraph (1)(a), an inaccurate document or inaccurate information includes a document or information in respect of a cosmetic that is no longer sold in Canada.

11 The schedule to the Regulations is replaced by the schedule set out in the schedule to these Regulations.

Cannabis Act

Cannabis Regulations

12 Subsection 130(1) of the Cannabis Regulations footnote 2 is replaced by the following:

Presentation of information — general requirement

130 (1) All information that is included on a label must be in English and in French, except for the INCI name and the European Union (EU) technical name.

13 Subparagraph 132.17(1)(c)(iv) of the Regulations is replaced by the following:

Coming into Force

14 (1) These Regulations, except section 6, come into force on the 180th day after the day on which they are registered.

(2) Section 6 comes into force on the second anniversary of the day on which these Regulations are registered.

SCHEDULE

(Section 11)

SCHEDULE

(Subsection 21.2(4))

EU Technical Names and Their INCI Names and French Equivalents
Item

Column 1

EU Technical Name

Column 2

INCI Name

Column 3

French Equivalent
1 Acetum Vinegar Vinaigre
2 Adeps Bovis Tallow Suif
3 Adeps Suillus Lard Saindoux
4 Aqua Water Eau
5 Bombyx Lipida Silkworm Extract Extrait de ver à soie
6 Brevoortia Oil Menhaden Oil Huile de menhaden
7 Bubulum Oil Neatsfoot Oil Huile de pied de bœuf
8 Butyris Lac Powder Buttermilk Powder Babeurre en poudre
9 Butyrum Butter Beurre
10 Candelilla Cera Euphorbia Cerifera (Candelilla) Wax Cire de candelilla
11 Caprae Lac Goat Milk Lait de chèvre
12 Cera Alba Beeswax Cire d’abeille
13 Cera Microcristallina Microcrystalline Wax Cire microcristalline
14 Colophonium Rosin Colophane
15 Copernicia Cerifera Cera Copernicia Cerifera (Carnauba) Wax Cire de carnauba
16 Dromiceius Oil Emu Oil Huile d’émeu
17 Faex Lactic Yeasts Levures lactiques
Yeast Levure
Yeast Extract Extrait de levure
18 Gadi Lecur Oil Cod Liver Oil Huile de foie de morue
19 Hoplostethus Oil Orange Roughy Oil Huile d’hoplostète orange
20 Lac Milk Lait
Whole Dry Milk Lait entier en poudre
21 Lactis Lipida Milk Lipids Lipides du lait
22 Lactis Proteinum Milk Protein Protéine du lait
Whey Protein Protéine du petit-lait
23 Lanolin Cera Lanolin Wax Cire de lanoline
24 Maris Aqua Sea Water Eau de mer
25 Maris Limus Extract Sea Silt Extract Extrait de limon marin
26 Maris Sal Sea Salt Sel marin
27 Mel Honey Miel
28 Mel Extract Honey Extract Extrait de miel
29 Montan Cera Montan Wax Cire de Montan
30 Mustela Cera Mink Wax Cire de vison
31 Mustela Oil Mink Oil Huile de vison
32 Olus Oil Vegetable Oil Huile végétale
33 Ostrea Edulis Extract Oyster Extract Extrait d’huître
34 Ostrea Shell Extract Oyster Shell Extract Extrait de coquille d’huître
35 Ostrea Shell Powder Oyster Shell Powder Poudre de coquille d’huître
36 Ovum Dried Egg Yolk Poudre de jaune d’œufs
Egg Œuf
Egg Yolk Extract Extrait de jaune d’œuf
37 Ovum Oil Egg Oil Huile d’œufs
38 Ovum Powder Egg Powder Poudre d’oeufs
39 Paraffinum Liquidum Mineral Oil Huile minérale
40 Pellis Lipida Skin Lipids Lipides cutanés
41 Pisces Extract Fish Extract Extrait de poisson
42 Piscum Cartilage Extract Fish Cartilage Extract Extrait de cartilage de poisson
43 Piscum Lecur Oil Fish Liver Oil Huile de foie de poisson
44 Pix Tar Oil Huile d’anthracène
45 Propolis Cera Propolis Wax Cire de propolis
46 Salmo Oil Salmon Oil Huile de saumon
47 Salmo Ovum Extract Salmon Egg Extract Extrait d’œufs de saumon
48 Sepia Extract Cuttlefish Extract Extrait de seiche
49 Serica Silk Soie
50 Serica Extract Silk Extract Extrait de soie
51 Serica Powder Silk Powder Poudre de soie
52 Shellac Cera Shellac Wax Cire de laque
53 Sine Adipe Colostrum Nonfat Dry Colostrum Poudre de colostrum écrémé
54 Sine Adipe Lac Nonfat Dry Milk Poudre de lait écrémé
55 Solum Diatomeae Diatomaceous Earth Terre de diatomées
56 Solum Fullonum Fuller’s Earth Terre à foulon
57 Sus Extract Pigskin Extract Extrait de peau de porc
58 Tallol Tall Oil Tallöl

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues: The last significant amendments to the Cosmetic Regulations came into force in 2006, when disclosure of ingredients on cosmetic labels became mandatory. The Cosmetic Regulations (the Regulations) permit the use of the term “parfum” at the end of the list of ingredients to indicate the presence of a fragrance ingredient, or a mixture of fragrance ingredients, in a cosmetic. The use of “parfum,” however, does not provide the necessary information to consumers who are allergic or sensitive to certain fragrance ingredients that are known to be contact allergens for a portion of the population (hereafter referred to as “fragrance allergens”). Without the disclosure on labels of these fragrance allergens, consumers may not be able to obtain this information to take steps to avoid purchasing and using products that may contain these ingredients.

Description: The Regulations Amending Certain Regulations Concerning the Disclosure of Cosmetic Ingredients (the amended Regulations) address this issue by strengthening the labelling requirements for cosmetics and requiring the disclosure of certain fragrance allergens on cosmetic labels. The amended Regulations incorporate by reference, on an ambulatory basis, fragrance allergens listed in Annex III of the European Commission’s Cosmetic Products Regulation (EC Cosmetic Products Regulation), as well as the transition period set out in that Annex for future updates to substances identified for disclosure. This approach facilitates alignment with the European Union (EU). Recognizing that this regulatory change requires additional information to be placed on cosmetic labels for cosmetics sold in small packages, Health Canada is adding further flexibility to disclose ingredients, including fragrance allergens, on a website. Moreover, Health Canada is improving the oversight of cosmetics by clarifying the terminology used in the Cosmetic Regulations, strengthening the cosmetic notification requirements, and enhancing compliance and enforcement tools. The amended Regulations include changes of an administrative nature to correct the publisher for a referenced document, to revise entries in the Schedule to the Regulations, and to revise French definitions to reflect current drafting conventions.

Rationale: The amended Regulations will enable consumers to identify ingredients that they may be allergic to, sensitive to, or wish to avoid. This will allow them to make more informed decisions regarding the products they purchase and use. These amendments are expected to bring benefits to consumers, including reduced need for, and costs related to, medical consultations and treatments; reduced workplace absenteeism and lost income due to illness; and improved quality of life through avoided discomfort and impacts of allergic contact dermatitis. Costs will be carried primarily by industry for the disclosure of the identified fragrance allergens (e.g. making changes to cosmetic labels). Total annualized costs for the cosmetic industry are estimated to be $2.66M ($18.71M present value over 10 years). An annualized cost saving for industry of $57,556 ($404,253 present value over 10 years) is estimated to result from the flexibility to disclose ingredients on a website for cosmetics sold in small packages. The annualized net cost for quantifiable elements of the proposal is estimated to be $2.61M ($18.31M present value over 10 years). The amended Regulations will result in administrative costs for industry, namely, the requirement to submit a notification to inform Health Canada if the cosmetic contains one or more of the specified fragrance allergens and to identify whether the cosmetic is considered leave-on or rinse-off. To help reduce the burden on industry, the provisions related to the disclosure of fragrance allergens will come into force two years after the date the amended Regulations are registered. All other provisions will come into force six months after the date of registration. Although the benefits to consumers could not be quantified, Health Canada expects that the benefits will significantly exceed the costs.

Issues

The Regulations Amending Certain Regulations Concerning the Disclosure of Cosmetic Ingredients (amended Regulations) address a number of matters related to the requirements for cosmetics under the Food and Drugs Act and include consequential amendments to the Cannabis Regulations under the Cannabis Act.

Disclosure of certain fragrance allergens on cosmetic labels

There is a growing demand from the public for readily accessible health protection information on chemicals in consumer products, including cosmetics. On June 13, 2023, the former Senate Bill S-5, Strengthening Environmental Protection for a Healthier Canada Act, received royal assent. This statute recognizes a new right to a healthy environment and the importance of chemical disclosure, including through product labelling, to provide meaningful information to the public. A commitment to making chemical ingredients more transparent was also included in the 2021 mandate letters of the Minister of Health and the Minister of the Environment.

In Canada, the Regulations under the Food and Drugs Act already require the disclosure of all ingredients on the label of a cosmetic. Fragrance ingredients are commonly used in cosmetics and are added to produce or mask a particular odour. Fragrance ingredients may be individual substances, but generally are complex mixtures of many different ingredients at very low concentrations or in trace amounts. According to the International Fragrance Association, more than 3 000 unique fragrance ingredients can be used to create fragrance mixtures.footnote 3 Disclosure of all ingredients in a fragrance mixture used in a cosmetic would result in a product label that is hundreds of ingredients long and impractical with respect to legibility. Globally, fragrance ingredients and mixtures are considered proprietary information. There are no jurisdictions that require the entire fragrance composition of a cosmetic on the product label.

In accordance with subsection 21.4(3) of the Regulations, the presence of fragrance ingredients must be indicated on a cosmetic label either by

Most manufacturers and importers of cosmetics use the term “parfum” rather than list all fragrance ingredients. Accordingly, consumers may not be aware of the fragrance ingredients that are used in a cosmetic by reading the label. While fragrance ingredients are safe for most of the population, like any ingredient, they can cause allergic reactions in certain individuals. For those individuals, contact allergic reactions to cosmetics are a result of repeated topical exposure to a fragrance allergen, leading to a reaction, and may cause skin irritation such as redness, itchiness, or rashes — also known as allergic contact dermatitis (ACD). Fragrance ingredients are the most common cause of contact allergies to cosmetics, followed by preservatives and hair dyes.footnote 4

The frequency of ACD experienced from exposure to fragrance ingredients in Europe is estimated to be 1% to 9%.footnote 5,footnote 6,footnote 7,footnote 8 In patients with eczema, the frequency of ACD from fragrance ingredients is higher, likely between 6% and 14%.footnote 9 Similar statistics are expected to be observed in the Canadian population. ACD is a lifelong condition and may be aggravated with re-exposure.

The lack of disclosure of fragrance allergens on cosmetic labels can negatively impact the health and safety of people in Canada, add a burden to the health care system, and contribute to absenteeism in the workplace. These impacts could lead to economic losses and a decrease in productivity.

Disclosure of ingredients for cosmetics sold in small packages

The Food and Drugs Act and the Regulations require that information provided on labels of cosmetics must be displayed in a legible manner for consumers. Some cosmetics, whose immediate container or outside package is small, have very limited space for all required label information to be present in a legible manner. Examples of cosmetics sold in small packages include eyeliner pencils, hotel or travel-sized amenities (moisturizer, shampoo, body wash), lipsticks and nail enamels. To address this issue, the Regulations allow for some flexibility regarding the disclosure of ingredients for cosmetics sold in small packages. If necessary, the list of ingredients can be disclosed on a tag, tape or card affixed to the container or package.

With the amended Regulations, if a product contains fragrance allergens, the list of ingredients will be slightly longer. Since cosmetics sold in small packages have less space to disclose all ingredients in a legible manner on their labels, the addition of fragrance allergens may require an increase in packaging size, or the creation of a tag, tape or card to attach to the product. Either of these solutions would lead to additional environmental waste.

Industry trade associations, both in Canada and Europe, have advocated for added flexibility for cosmetic labels. Particularly for small packages, industry has identified that the current flexibility for ingredient disclosure lacks a modern and sustainable option.

Regulatory oversight of cosmetics

There are provisions in the Regulations that require modernization and updates to improve the regulatory oversight of cosmetics given changes to the marketplace. Therefore, Health Canada will address the following issues:

(a) Definition of “manufacturer”

The definition for “manufacturer” in the Regulations reads as follows: “means a person, a partnership or an unincorporated association that sells, or manufactures and sells, a cosmetic under its own name or under a trademark, design, trade name or other name or mark owned or controlled by it.”

There are aspects of this definition that would benefit from clarification, such as the fact that the regulated party must be located in Canada and clarifying the responsibility of the brand owner who is located outside Canada. Moreover, the definition does not specify who is captured in the absence of a person located in Canada.

(b) Definition of “importer”

The term “importer” is used in various sections of the Regulations, although not defined. Certain obligations are specific to the importer, and to help facilitate compliance, the amendments to the Regulations will clearly set out the roles and responsibilities of the importer.

(c) Cosmetic notification requirement

The Regulations have several requirements related to cosmetic notification. Health Canada collects and maintains essential information regarding the product and the regulated parties through these notifications, as follows:

Finally, if a cosmetic notification, amendment, or response to a request for information is not received, Health Canada contacts the manufacturer or importer requesting the necessary information. If the manufacturer or importer does not respond or comply with Health Canada’s request, the Department’s only recourse is to pursue prosecution or seizure from the market. Including other compliance tools (e.g. ability to issue a stop sale) could effectively address these types of non-compliance, allowing for a proportional response and being less time-consuming and resource intensive for Health Canada.

(d) Distributor information on the cosmetic notification

The cosmetic notification requires the name and address in Canada of the manufacturer, importer or distributor.

In modern supply chains, a manufacturer or importer may have multiple distributors, which can change throughout the lifespan of a product. For every change of distributor, the notifying parties must update their cosmetic notification, which is an administrative burden. For compliance and enforcement purposes, Health Canada can obtain this information from the notifying party on an as-needed basis.

(e) “Rinse-off” or “leave-on” product information

The Regulations require manufacturers and importers to identify a product’s function and form on the cosmetic notification. However, the notifier is not required to indicate whether a product is “rinse-off” or “leave-on.” Over time, Health Canada has identified that this information is needed when screening a cosmetic notification, because the risk profile of an ingredient can often be significantly different if it is rinsed off versus left on the body.

In addition, with the introduction of a new requirement to disclose certain fragrance allergens when used above specified limits, Health Canada will need to be informed as to whether a product is “rinse-off” or “leave-on” for compliance verification purposes.

(f) Ingredient identification on the cosmetic notification

The Regulations require the disclosure of each ingredient present in a cosmetic product on the cosmetic notification. Although the ingredient name on a cosmetic label must be disclosed using the International Nomenclature Cosmetic Ingredient (INCI) term, the Regulations do not require this nomenclature to be used when identifying ingredients on the cosmetic notification. As a result, Health Canada receives notifications using various nomenclature to identify the same ingredients, and must maintain a database of synonyms to INCI terms to assess compliance with ingredient concentration restrictions or other conditions of use.

In 2020, there were 7 220 instances where Health Canada carried out additional follow-up work to identify ingredients included in cosmetic notifications because the ingredient term used was not known to the Department. If an INCI name is not used on the cosmetic notification form, this results in additional actions for Health Canada to be able to identify the ingredient used, and to determine if there is a potential health risk associated with the cosmetic.

In addition, the use of INCI terms across cosmetic notifications and cosmetic labels would support efficient and effective compliance verification actions.

(g) Concentration ranges for ingredients on the cosmetic notification

The Regulations require manufacturers and importers to provide a list of the cosmetic’s ingredients and, for each ingredient, indicate either its exact concentration or corresponding concentration range on the cosmetic notification. The table in the Regulations outlines concentration ranges that may be used instead of an exact concentration.

Some of the current concentration ranges are very broad, such as range 1, which includes concentrations of more than 30% up to 100%. Broad concentration ranges can pose a challenge when Health Canada conducts risk assessments of ingredients under the Food and Drugs Act or the Chemicals Management Plan. In the absence of exact concentrations, Health Canada uses the higher concentration from a concentration range for exposure calculations. In these cases, Health Canada’s final assessment may be overly conservative, and may not reflect the actual exposure to the ingredient through use of the cosmetic.

(h) Requests for evidence of safety

Section 29 of the Regulations authorizes Health Canada to request evidence from a manufacturer to establish the safety of a cosmetic when used under the recommended or normal conditions of use. In the instance that a manufacturer does not submit evidence of safety, or if the evidence of safety they submit is not sufficient, section 29 indicates that the manufacturer must stop selling the product.

Most cosmetics sold in Canada are imported. When an importer submits a cosmetic notification and Health Canada suspects that a safety issue exists, the importer is contacted. Health Canada makes requests to importers for evidence of safety information on a regular basis, and has done so for over a decade. Most importers are responsive; however, if the requested information is not provided, Health Canada cannot exercise section 29 of the Regulations to issue a stop sale in the case of insufficient safety data.

(i) Manufacturer’s information on the label

Paragraph 30(2)(a) requires that the name and address of the manufacturer as they appear on the label be provided in the cosmetic notification, in accordance with section 20. As a result of the changes to the definition of “manufacturer,” and the introduction of the term “importer,” updates are required to paragraph 20(a) to maintain flexibility as to the name and contact information that appears on the label. Furthermore, the current requirement can be modernized to allow for the use of alternate contact methods, like websites and email addresses.

Changes of an administrative nature

Amendments to the Regulations of an administrative nature are necessary, as follows:

  1. Update the reference to the International Cosmetic Ingredient Dictionary and Handbook;
  2. Revise the ingredient names in the schedule to the Regulations to reflect current ingredient names, and revise the subheadings within the schedule to the Regulations;
  3. Clarify that it is permitted to use all three terms for an ingredient in the schedule for disclosure purposes on a label (the use of all three terms is not clearly described in the Regulations but is accepted in practice);
  4. Revise terms in section 2 of the Regulations that are not reflective of current drafting conventions.

Background

Health Canada helps to protect the health and safety of Canadians by minimizing the risk associated with the use of cosmetics marketed and sold in Canada. The regulatory oversight for cosmetics was first introduced in the Food and Drugs Act in 1939, where it was included in the definition of “drug.” This measure was taken following cases of injuries due to certain substances in cosmetics. In 1954, requirements respecting cosmetics were outlined in the Food and Drug Regulations under the Food and Drugs Act, but it wasn’t until 1977 that the Regulations were promulgated as a separate set of regulations for cosmetics. Products in this category largely include general hygiene and grooming products that are widely available and used daily by consumers, such as hand and body cleansers, deodorants, moisturizers, shampoos and makeup.

All cosmetics sold in Canada must meet the requirements of the Food and Drugs Act and the Regulations. Under this legislation, no person can sell any cosmetic that has in it any substance that may cause injury to the health of the user when the cosmetic is used according to the directions on the label and under normal conditions of use.

Health Canada regulates the safety of cosmetics using a post-market approach. A key component of the cosmetic regulatory framework requires manufacturers and importers to notify Health Canada within 10 days after they first sell a cosmetic, and provide information about the product such as its formulation, function and form. The Consumer Product Safety Program (CPSP) within Health Canada screens and processes the submitted cosmetic notifications. In the past five years (2018–2022), the program received on average 57 239 cosmetic notifications per year. This number has been increasing steadily since notifications moved from a paper-based to an online system in 2013.

Since 2006, the Regulations have required cosmetic product labels to list all ingredients present in the product using an internationally recognized nomenclature for cosmetics called INCI. This is the same naming convention used in the European Union (EU), and similar requirements apply in the United States (U.S.) and other international jurisdictions. It has been a requirement to disclose fragrance allergens on cosmetic labels in the EU since 2005.

Objective

The key policy objective of the amended Regulations is to increase the chemical transparency of cosmetics in order to help reduce risk to human health, which will be achieved by introducing a requirement to disclose certain fragrance allergens on product labels when present in cosmetics. The objectives of the amended Regulations are also to improve the regulatory oversight of cosmetics and to make administrative updates.

Description

Health Canada is amending requirements for cosmetics by amending the Regulations in the following manner:

Introduce a requirement to disclose certain fragrance allergens on cosmetic labels

Health Canada is introducing amendments to the Regulations to require the disclosure of certain fragrance allergens on cosmetic labels when present above a specified limit, namely, when any of the specific fragrance allergens are present in the formulation at a concentration greater than 0.01% in rinse-off products and 0.001% in leave-on products.

These amendments require fragrance allergens to be disclosed within the list of ingredients on cosmetic labels. As a result of these amendments, the information about the presence and concentration of fragrance allergens also needs to be reflected on the cosmetic notification.

On July 26, 2023, the European Parliament adopted amendments to the European Commission’s Cosmetic Products Regulation (EC Cosmetic Products Regulation) relating to fragrance allergens identified for disclosure.footnote 10 There are now 81 entries in Annex III that identify fragrance allergens for disclosure on cosmetic labels when present above a defined concentration level. The transition period for the implementation of the changes is three years (July 31, 2026) for new products placed on the market, and five years (July 31, 2028) for existing products to sell through.

The amended Canadian Regulations incorporate the fragrance allergens identified in Annex III via an ambulatory incorporation by reference, including the transition period set out in that Annex. This ensures that the implementation date for the disclosure of new fragrance allergens on the labels of cosmetics sold on the Canadian market corresponds to the implementation date for cosmetics made available on the European Union (EU) market.

Add greater flexibility for the disclosure of ingredients for cosmetics sold in small packages

Health Canada is amending the Regulations to add greater flexibility for cosmetics sold in small packages, namely, the option to use a website to disclose the complete list of ingredients, including fragrance allergens. A bilingual statement is required on the cosmetic’s label to inform and direct consumers to the website where the list of ingredients can be found.

In recognition that industry may be exploring other innovative options for the disclosure of ingredients, this amendment does not preclude the presence of a digital mechanism to access the list of ingredients, such as the use of a QR code following the required statement.

Improve oversight of cosmetics

Health Canada is amending the Regulations in the following manner to improve the oversight of cosmetics and to support compliance and enforcement actions.

(a) Update the definition of “manufacturer”

The updated definition of “manufacturer” in subsection 2(1) of the amended Regulations increases clarity as to who is captured by this term. The updated definition reads as follows:

“manufacturer,
in respect of a cosmetic, means, one of the following persons:
  • (a) a person in Canada who sells a cosmetic under the person’s own name or under a trademark, design, trade name or other name or mark owned or controlled by that person; or
  • (b) a person in Canada who is authorized to act in Canada on behalf of another person who is not in Canada, if the other person sells the cosmetic under its own name or under a trademark, design, trade name or other name or marked owned or controlled by the other person.”

Moreover, an application provision is added to specify that in the absence of a person meeting the definition of a manufacturer, the reference to the manufacturer in the Regulations falls on the importer or, in the absence of an importer, the person who fabricates or processes the cosmetic in Canada on behalf of the brand owner that is not located in Canada.

This revised definition and application provision set out a description of a “manufacturer” and identifies sequentially who is captured as the manufacturer with respect to the amended Regulations. This approach provides flexibility to industry while ensuring that there is a person responsible for the products in Canada. Guidance material for the regulated parties describes the activities included under “processes,” such as packaging, labelling or relabelling a product.

(b) Add a definition for “importer”

To increase clarity, the definition for “importer” is added in section 2 of the Regulations. This definition is consistent with modern definitions of the same term appearing in other regulations administered by Health Canada. The definition reads as follows:

“importer
means a person that imports a cosmetic into Canada for the purpose of selling it.”
(c) Strengthen the cosmetic notification requirement

To strengthen the cosmetic notification requirements, the Regulations are amended to clarify that discontinuation of sale requires the submission of a notification.

Also, consistent with other provisions in the Regulations related to the submission of a cosmetic notification, the amendments clarify that the manufacturer or importer, as the case may be, has 10 days to respond to a request made by the Minister for additional information.

Lastly, the Regulations are amended to allow Health Canada to stop the sale of a product if the notification requirements are not met or the information requested is not provided. This provision gives Health Canada an additional tool that can be used in the case of non-compliance with these requirements.

(d) Remove distributor information from the cosmetic notification

The amended Regulations remove the requirement for the name and address in Canada of the distributor from the cosmetic notification, given that Health Canada can follow up with the manufacturer or importer, as needed, regarding distribution of the product for compliance and enforcement purposes.

(e) Add a requirement to identify “rinse-off” or “leave-on” on the cosmetic notification

The amended Regulations require manufacturers and importers to specify on the cosmetic notification whether the cosmetic is a “rinse-off” or “leave-on” product. Definitions for these terms are added to the amended Regulations as follows:

“rinse-off product
means any cosmetic that is intended to be removed after application to the skin, hair or mucous membranes”;
“leave-on product
means any cosmetic that is intended to stay in prolonged contact with the skin, hair or mucous membranes.”

The definitions are aligned with the definitions present in the EC Cosmetic Products Regulation.

(f) Add a requirement to identify ingredients by their INCI names on the cosmetic notification

The amended Regulations require that ingredients disclosed on the cosmetic notification be identified by their INCI names, when available. If an INCI name does not exist, a chemical name will be required to identify the ingredient.

(g) Amend the table of concentration ranges for the cosmetic notification

The amended Regulations increase the number of concentration ranges in the Regulations from the previous 7 to 13 concentration ranges. The table below describes the amended concentration ranges.

Table 1: Concentration ranges for the cosmetic notification
Item Concentration range Corresponding number
1 More than 80%, up to 100% 1
2 More than 65%, but not more than 80% 2
3 More than 50%, but not more than 65% 3
4 More than 40%, but not more than 50% 4
5 More than 30%, but not more than 40% 5
6 More than 20%, but not more than 30% 6
7 More than 10%, but not more than 20% 7
8 More than 3%, but not more than 10% 8
9 More than 1%, but not more than 3% 9
10 More than 0.3%, but not more than 1% 10
11 More than 0.1%, but not more than 0.3% 11
12 More than 0.001%, but not more than 0.1% 12
13 More than 0%, but not more than 0.001% 13
(h) Add the ability to request evidence of safety from the importer

The amended Regulations modify section 29 of the Regulations to provide that the importer, in addition to the manufacturer, may be required to provide evidence of safety. For the purposes of protecting proprietary information, a foreign manufacturer or a third party will be able to provide evidence of safety information to Health Canada on an importer’s behalf.

(i) Modernize the contact information present on the label

Paragraph 20(a) of the Regulations is amended to specify that the inner label must include a telephone number, an email address, a website address or any other information that would enable a consumer to direct any product-related questions about the cosmetic to a contact person.

This amendment introduces flexibility and modernize the contact information on the product label for consumers, should they have questions about a product. Based on consultations under the Self-Care Framework, product-related questions are often received through companies’ websites and the postal address is used infrequently. This change provides access to modernized contact information on the cosmetic label instead of a postal address.

As a result of the change to paragraph 20(a), the notification requirements set out in paragraphs 30(2)(a) and 30(2)(g) of the Regulations are amended. First, paragraph 30(2)(a) is amended to be consistent with the changes in paragraph 20(a) as it relates to the contact information provided on the label. Furthermore, paragraph 30(2)(g) is amended to specify that if the cosmetic is processed or manufactured by someone other than the person in 30(2)(f), meaning the manufacturer or importer, this information must be provided on the cosmetic notification. This is consistent with the original intent of this provision.

Administrative changes

Amendments of an administrative nature are as follows.

Consequential amendments to the Cannabis Regulations replace references to “EU trivial name” with “EU technical name” in English, and “nom trivial attribué par l’UE” with “nom technique attribué par l’UE” in French.

Regulatory development

Consultation

Health Canada has conducted the following consultation activities to obtain feedback from consumers and impacted stakeholders on the policy elements present in the amended Regulations. Health Canada took into account the combined findings as it developed and refined elements of the amended Regulations now published in the Canada Gazette, Part II.

Preconsultation conducted prior to prepublication in Canada Gazette, Part I

In July 2021, Health Canada posted a Notice to Interested Parties (a preconsultation) to seek feedback and comments on proposed amendments to the Regulations under consideration. The pre-consultation was open for comments from July 16, 2021, to August 30, 2021. Health Canada received 65 submissions in response to the preconsultation. With regard to the proposal to require the disclosure of certain fragrance allergens, the comments provided were supportive, both from consumers and the industry. The number of responses from various stakeholders was as follows: consumers (36), industry (22), subject matter experts in dermatology (2) and non-governmental organizations (5).

Health Canada considered all comments received during the preconsultation. Health Canada’s responses are described below.

Format for the disclosure of fragrance allergens

Two formats were proposed for consideration in the preconsultation: option 1 was to include the fragrance allergens within the list of ingredients, while option 2 was to disclose fragrance allergens in a separate list. The following prompt was suggested for the second option: “Fragrance allergens / allergènes de parfum : fragrance allergen 1, fragrance allergen 2…”

Consumers indicated a preference for option 2, where fragrance allergens would be listed separately from the list of ingredients. The rationale provided for this preference was that separating them from the list of ingredients would enable them to be viewed more easily, drawing the attention of consumers more effectively.

Industry stakeholders preferred option 1 and indicated that separating the fragrance allergens from the list of ingredients, as described in option 2, would be inconsistent with the format used in the EU and impose a huge cost on business. They also thought option 2 would be misleading for consumers. Separating fragrance allergens could also cause a consumer to not review the full list of ingredients, thereby potentially missing other disclosed ingredients that the consumer might be allergic to or to which the consumer might have a sensitivity.

An industry stakeholder recommended that the reference to “fragrance allergens” be replaced by “contact allergens.” Health Canada considered this recommendation; however, these particular contact allergens are most commonly associated with fragrance ingredients. Therefore, they are often not individually disclosed like other ingredients, but are instead captured under the umbrella term “parfum” or “fragrance” at the end of the list of ingredients. Many contact allergens are already present in the list of ingredients outside of the term “parfum.” Thus, to emphasize that this proposal relates to the disclosure of fragrance ingredients that may cause ACD, the amended Regulations use “fragrance allergens.”

Considering that the disclosure of fragrance allergens has been a requirement in the EU since 2005, a proportion of consumers may already be familiar with this format and know to look for certain fragrance allergens within the list of ingredients. Furthermore, companies that also sell in the EU are familiar with this requirement, which would also increase alignment with the EU requirements to support trade.

Taking all of this into consideration, Health Canada requires the disclosure of certain fragrance allergens within the list of ingredients.

Fragrance allergens proposed for disclosure

At the time of the preconsultation, in the EU, 24 fragrance allergens were required to be disclosed in the list of ingredients when present above a specified limit. From 2014 to 2020, the European Commission held consultations on an expanded list of fragrance allergens proposed for disclosure. Health Canada’s preconsultation proposed that this expanded group of 87 fragrance allergens, when present above a specified limit, would be disclosed on cosmetic labels. At that time, this group of fragrance allergens was still under discussion in the EU. Six industry associations expressed their concerns with the expanded list of fragrance allergens. Industry indicated that this fragrance allergens list was still in development and should not be used since it had not yet been adopted in the EU. In addition, with respect to implementation, it was recommended that Health Canada wait until after implementation in the EU is in effect.

Two industry associations indicated that fragrance allergens should only be disclosed on the label and not necessarily be required to be listed as an ingredient on the cosmetic notification.

Industry stakeholders expressed their support for the disclosure of internationally recognized fragrance allergens when their concentration is greater than 0.001% in leave-on products or 0.01% in rinse-off products.

With the feedback from the preconsultation, and to support alignment with the requirements of the EU and other jurisdictions, which have regulations modelled after the EC Cosmetic Products Regulation, the proposal was modified to require the disclosure of the original 24 fragrance allergens on cosmetic labels. If it meets the specified concentration for disclosure, the fragrance allergen would be required to appear within the list of ingredients. Health Canada proposed to use an ambulatory incorporation by reference of the ingredients identified as fragrance allergens in Annex III of the EC Cosmetic Products Regulation. This would facilitate alignment between Canada and the EU whenever an expanded list of fragrance allergens is adopted and for any future updates. If there is a transition period for the substances identified for disclosure in the EU, a similar transition period would apply in Canada. This would improve alignment between the EU and Canada, while being predictable for regulated parties concerning when changes take effect.

Disclosure of other information about ingredients on the labels of cosmetics

One environmental non-governmental organization suggested that the list of ingredients should indicate the potential health impact in parentheses, directly following the ingredient name, for example, “chemical name (allergen, carcinogen, neurotoxin).” The respondent considered this approach to be fully transparent.

Under the Food and Drugs Act and the Regulations, cosmetics must be safe for use by the consumer under the recommended conditions of use. Health Canada takes a risk-based approach considering both the properties of the substances in products, as well as the amounts to which people are exposed under normal conditions of use, to determine whether there is a risk that needs to be addressed. If an ingredient is a carcinogen through cosmetic exposure, for example, it is not permitted for use in a cosmetic. To include health impacts of this nature in the list of ingredients would not be consistent with the Department’s approach to regulating the risk of cosmetics.

Additionally, identifying all possible allergens could cause alarm to consumers, as many of these would not cause an allergic reaction in most individuals. Cosmetics may contain ingredients that are allergens for some people, which does not mean that the cosmetic is not safe for others to use; however, those with known allergies to these ingredients should avoid using products that contain them.

Furthermore, a list describing potential health effects would also create an issue concerning legibility, as the length of the list of ingredients would be significantly increased. In turn, this would cause an increase in packaging, creating more waste. For these reasons, this recommendation was not included in the prepublished proposal in the Canada Gazette, Part I.

Disclosure of food allergens on the labels of cosmetics

Thirteen consumers and one non-governmental organization indicated that they would like to see priority food allergens disclosed in plain language on the labels of cosmetics. They suggested that if a food allergen is present, there should be an alert that would clearly inform consumers about its presence. For example, if casein is used in a cosmetic product, there would be an indication on the label that milk is in the product, such as “casein (milk)” or “Contains: Milk.” These stakeholders recommended that ingredient labelling requirements for cosmetics should follow those for pre-packaged food products, referencing Health Canada’s Food Allergen Labelling Guide.

The current requirement to disclose all ingredients on the label using the INCI name allows consumers to make an informed choice when purchasing a cosmetic; ingredients that are considered food allergens already appear in the list of ingredients. Moreover, none of Canada’s key trading partners requires an alert statement for food allergens on the labels of cosmetics.

Health Canada recognizes that food allergens are an important concern for people in Canada, especially for parents of children suffering from food allergies. A Type I allergic reaction (e.g. an anaphylactic reaction that may be fatal) usually occurs when a product containing an allergen is ingested. Cosmetics are not intended to be ingested, and the primary route of exposure is dermal. Health Canada will continue to monitor the situation for food allergens to determine if additional risk management options should be considered for cosmetics in the future.

Flexibility for disclosure of ingredients for small packages

Consumers stated that ingredients for small packages must be made easily accessible whether on a tag, tape or card attached to the container. Accessibility was identified as a concern with respect to the disclosure of ingredients on a digital space such as a website, especially for seniors and those that do not have a smartphone.

Industry stakeholders welcomed the proposal for added flexibility for disclosure of ingredients for small packages. However, it was suggested that the added flexibility to disclose ingredients on a website should apply to all products, irrespective of packaging size. Industry thought that this should be considered as a labelling option to provide sufficient flexibility to accommodate the identification of new fragrance allergens that would need to be disclosed in the future.

Health Canada considered allowing the disclosure of ingredients on a digital space, such as a website, for all sizes of packaging; however, this would have a negative impact for the consumer. The disclosure of ingredients is a cornerstone requirement for cosmetics, and that information should be easily accessible to consumers. Cosmetics sold in larger size packages already meet the labelling and legibility requirements; thus, even with additional fragrance allergens being disclosed, additional flexibility would not be necessary. Cosmetics sold in small packages face a greater challenge given the limited space available on the label to include all required information in a legible manner. To address this challenge, Health Canada proposed to provide flexibility for the disclosure of ingredients for small packages only.

Improving oversight of cosmetics

Industry stakeholders identified some considerations regarding the proposed clarifications, emphasizing that it is important to align definitions with other jurisdictions. The addition of a definition for “importer” was welcomed. They stated that the proposed definition for “manufacturer” was misaligned with the EU and that the definition should not be modified. Comments regarding definitions being added or clarified were considered by Health Canada. Given that the current definition for “manufacturer” could capture an importer if it is also the brand owner, this was viewed as an opportunity to help clarify the roles in the supply chain and their responsibilities.

All stakeholders supported the proposal to identify whether a product is “leave-on” or “rinse-off” on the cosmetic notification form. With regard to the proposal to require the INCI name on the notification form, industry stakeholders expressed their support.

Industry questioned how the narrower concentration ranges were established and indicated that an increased number of concentration ranges could have unintended consequences on the proprietary rights of companies to protect their formulas. With respect to informing risk assessment and determining appropriate risk mitigation, there was support for the consideration of more refined exposure estimates. It was recommended that Health Canada work with stakeholders to seek more refined use estimates when necessary, instead of making this a regulatory change. One respondent was concerned whether the change in the concentration ranges would be retroactive to previously submitted cosmetic notification forms.

Health Canada took into consideration the comments and proposed to move forward with the narrower ranges of concentration. The proposed ranges would still allow companies to protect their formulations, while supporting risk management actions (e.g. processing of cosmetic notification forms, conducting risk assessments). Manufacturers and importers who have previously filed notification forms would not need to re-notify their products using the new concentration ranges. Instead, the new concentration ranges may be updated at the time when they submit an amendment or update their cosmetic notification. It was proposed that changes to the cosmetic notification form would be implemented by the coming-into-force date of the amended Regulations.

With respect to the strengthening of the cosmetic notification requirements by adding the authority to issue a stop sale for non-compliance, industry expressed that there should be a stepwise approach with regard to enforcement actions, especially since a 10-day period to submit the cosmetic notification form following first sale is already relatively short. Industry recommended that there should be appropriate enforcement discretion and flexibilities for cosmetic notification forms that are submitted late.

Health Canada recognizes that the regulatory oversight of cosmetics follows a post-market regime. Also, a progressive and proportional-to-risk enforcement approach will continue to be applied, as for any regulatory requirement for cosmetics. This amendment has been proposed to allow for more practical enforcement measures.

Industry raised concerns about the proposal to expand the request of evidence of safety to the importer. Industry felt that the importer may not have access to safety information that could address the evidence of safety request, as the manufacturer would own that information. Furthermore, when an importer has relevant information, there could be proprietary concerns and the importer might not be in a position of authority to disclose such evidence. In conclusion, some industry stakeholders felt that the evidence of safety request should continue to apply only to the manufacturer.

Health Canada has been successfully making requests for evidence of safety to importers for purposes other than section 29 of the Regulations for over a decade. However, in some instances where an importer does not respond to a request, or the information Health Canada receives from an importer is insufficient, the Department is unable to initiate actions under section 29 of the Regulations. This proposed amendment would require the importer in Canada to provide this information to Health Canada when requested (either themselves or through a third party). If necessary, importers should make the appropriate business agreements with product manufacturers to be able to meet this requirement.

Linkage to the Self-Care Framework

Industry stakeholders indicated that proposed amendments to the Regulations should have been included under the Self-Care Framework and that this was a missed opportunity for Health Canada. Health Canada was encouraged to further advance the present regulatory modernization activity by leveraging elements to help shape, facilitate, and advance the Self-Care Framework as a key departmental priority.

The Department continues to work closely on activities related to self-care products such that any steps forward, including these changes to the Regulations, are done in a coordinated manner that is consistent with the long-term vision of the Self-Care Framework.

Cost-benefit analysis surveys

In January 2022, the cost-benefit analysis (CBA) survey materials were shared with five industry associations to distribute to their membership, or to a sampling of their membership they thought might be affected and interested in providing inputs. In addition, in February 2022, the survey materials were also sent to 2 005 email contacts who submitted a cosmetic notification in the past five years.

During the first survey, some industry stakeholders suggested that the number of cosmetic stock keeping units (SKUs) should be used to assess the economic impact on industry in the CBA instead of market value. An extensive search was undertaken to identify estimates of the number of cosmetic SKUs sold in Canada; however, no aggregate information was found. The cosmetic industry varies greatly in business size, from many micro-sized home businesses to several large multinational companies, and there is a large number of import and export categories for cosmetics and personal care products, which makes it challenging to quantify the number of SKUs for cosmetics.

The initial CBA survey generated 123 responses from a variety of cosmetic industry members, with representation from all sizes of businesses. The sales of individual companies ranged from less than $1,000 per year to several in excess of $100M per year. These companies accounted for approximately $2B of cosmetic sales, a significant share of the $11.7B annual market in Canada.

In response to the original CBA survey, 114 companies provided a response to whether they generally disclose the 24 specific fragrance allergens, with 33.3% reporting that they already did and 66.7% that they did not. Within the context of the market coverage of the survey, $80M worth of cosmetics were identified as containing at least one of the 24 specific fragrance allergens. Since this represents about 5% of products by value, for those companies that reported, it is estimated that about 5% of products contain any of the specified fragrance allergens and would be required to disclose one or more fragrance allergens on their label.

In July 2022, a follow-up CBA survey took place with 26 companies who participated in the initial survey. The purpose of the follow-up CBA survey was to gather information about the number of cosmetic SKUs sold in Canada, as well as the nature of the costs associated with the disclosure of fragrance allergens, and to better characterize other costs and cost savings. Ten questionnaires were received and, with additional contact with companies, an estimate of the total number of cosmetic SKUs in Canada was determined.

Summary of comments received during prepublication in the Canada Gazette, Part I

The proposed Regulations Amending Certain Regulations Concerning the Disclosure of Cosmetic Ingredients were prepublished in the Canada Gazette, Part I, on February 11, 2023. As part of the federal regulatory process, people in Canada were invited to submit their comments through the online feature available on the Canada Gazette webpage. The 70-day comment period ended on April 22, 2023.

A number of mechanisms were used to inform stakeholders of the prepublication and to invite them to submit comments on the proposal.

During the comment period, a total of sixty-six submissions were received. The majority (58) of comments were submitted using the online commenting feature available on the Canada Gazette webpage. There were eight email submissions sent to Health Canada. After reaching out to the stakeholders to obtain their consent, the submissions were entered manually in the online commenting system. Forty respondents self-identified as being individuals (60%), nine stakeholders remained anonymous (14%) and seventeen respondents represented organizations or businesses (26%).

The comments were reviewed by Health Canada and taken into consideration for the amended Regulations. In response, two adjustments have been made to address concerns identified by industry stakeholders, specifically with respect to the definition of the term “manufacturer” and the online accessibility of the International Cosmetic Ingredient Dictionary and Handbook on the publisher’s website.

Comments related to specific topics are summarized below.

A. Comments related to the requirement to disclose fragrance allergens

All stakeholders expressed their support for the disclosure of fragrance allergens on cosmetic labels. One industry stakeholder advised that the information about the presence of fragrance allergens may be difficult to obtain from suppliers.

Two industry respondents expressed that there is no scientific consensus regarding the expanded list of fragrance allergens identified for disclosure in the EU, that there is an ongoing debate in Europe, and that the list of fragrance allergens in the EU is not currently supported by sound science. It was recommended that Health Canada should conduct its own regulatory impact assessment. It was also recommended that only substances (fragrance allergens) for which a patch test is available should be required to be disclosed on cosmetic labels.

Response: With regard to the lack of patch tests for substances identified for disclosure, dermatologists interviewed during the EC Impact Assessment Study indicated that they expect patch tests to become available for the additional fragrance ingredients, as they did for the original fragrance allergens already labelled. They estimated that EC labelling requirements will create enough demand to make production of patch tests commercially interesting. The Canadian dermatology community indicated that specialists do not always test for all current EU allergens. The performance of patch testing, reliability of the results and benefits from the procedure depend heavily on the physician’s knowledge and experiences with patch testing, their level of interest and the accessibility of the allergens. Health Canada considers that the scientific process used by the EC’s Scientific Committee on Consumer Safety to establish which substances should be disclosed on the cosmetic labels is sound and robust. A confirmatory allergy test is clinically relevant to help health practitioners identify patient allergies and advise them about ingredients they should avoid. The interest in ingredient disclosure is not dependent on confirmatory allergy testing and thus is not dependent on the availability of patch tests for all ingredients. Fragrance allergens disclosure on cosmetic labels addresses the growing consumer demand for clearer and more detailed information on chemicals in consumer products including cosmetics and is independent from the availability of patch testing for all fragrance allergens.

i. Ambulatory incorporation by reference of the fragrance allergens identified in Annex III of the EC Cosmetic Products Regulation

Two respondents (industry associations) supported incorporation by reference of the EC list of fragrance allergens. Five respondents (industry stakeholders) identified significant concerns with this approach. The main reasons stated were that this mechanism eliminates the consultation process for Canadian stakeholders. Furthermore, they also voiced that this would prevent an effective cost-benefit analysis process. In their view, the direct integration of regulatory transition timelines established outside the Canadian context is considered to be highly inappropriate, and adequate transparency and consultation with Canadian stakeholders need to be assured.

Response: The authority to incorporate by reference of externally generated documents in regulations is consistent with the Statutory Instruments Act. The Statutory Instruments Act provides explicit power to incorporate by reference a document or part of a document in a regulation on an ambulatory basis.

Health Canada Incorporation by Reference Policy describes guiding principles and steps to be taken when other documents are incorporated on an ambulatory basis into a regulation. Health Canada considers that the incorporation of fragrance allergens identified for disclosure in Annex III of the EC’s Cosmetic Products Regulation meets the principles outlined in the policy. This approach is similar to the incorporation of a standard or other document into a regulation. To this point, Health Canada’s view is that the EC is a reputable source and incorporating the EC’s fragrance allergens is an appropriate and effective way to achieve alignment and provides predictability to stakeholders. Annex III of the EC Cosmetic Products Regulation is accessible on the EC’s website, in English and French and other languages.

Moreover, consultations for the EC proposals are also accessible online and thus, there are numerous opportunities to be involved in the consultation process of another jurisdiction. When the EC will hold future consultations concerning fragrance allergens, Health Canada will communicate to its stakeholders that a consultation is happening.

ii. Pursuit of North American alignment

One stakeholder (industry association) recommended alignment with the U.S. and Mexico, which represent two major trading partners, to reduce technical barriers to trade. Three stakeholders (industry associations) indicated support for an alignment with the U.S. in light of new legislation passed for cosmetics. One stakeholder (industry association) also suggested that there should be coordination with international partners (EU and the U.S.) to facilitate regulatory convergence.

Response: Health Canada considered the position presented by industry stakeholders. Mexico and the U.S. do not currently have provisions regarding disclosure of fragrance allergens for cosmetics. Under the new Modernization of Cosmetics Regulation Act in the U.S., a proposed rule for fragrance allergens disclosure is expected in 2024. At this time, Health Canada will maintain alignment with the EU requirements for disclosure of fragrance allergens. The benefit of increased transparency with regard to fragrance allergens disclosure to help consumers make an informed choice when purchasing a cosmetic is a commitment outlined in the mandate letter of the Minister of Health. Health Canada will continue to collaborate with its North American counterparts. An approach to North American alignment for fragrance allergens could be explored in the future.

iii. Status of substances banned for use in cosmetics in the EU

One stakeholder requested that Health Canada confirm the status of 2-(4-tert-Butylbenzyl)propionaldehyde (CAS 80-54-6) (lilial) and Hydroxy-methylpentylcyclohexenecarboxaldehyde (CAS3106-04-4) (lyral), as they are banned for use in cosmetics in the EU.

Response: These two substances are included in Annex II of the EC Cosmetic Products Regulation; as such, they are no longer subject to the EC fragrance allergens disclosure requirements as their use has been prohibited in cosmetics sold in the EU, since 2022 and 2021 respectively. With the incorporation by reference of the fragrance allergens identified in Annex III of the EC Cosmetic Products Regulation, these two substances would not be required to be disclosed within the list of ingredients on cosmetic labels in Canada. However, given the concerns identified by the EC regarding the safety of these ingredients, Health Canada wishes to remind stakeholders that section 16 of the Food and Drugs Act states that no person shall sell a cosmetic that has in it any substance that may injure the health of the user according to the directions for use or as customarily used. Regardless of whether or how a cosmetic ingredient is described on the Hotlist, Health Canada may take action to enforce the Food and Drugs Act and the Regulations at any time.

iv. The use of the term “fragrance allergens” is a misnomer

Two respondents (industry associations) expressed that the term “fragrance allergens” is an inaccurate designation and suggested the appropriate term to use would be “contact allergens.”

Response: Health Canada acknowledges that the substances identified for disclosure are contact allergens. However, the term “fragrance allergen” has been widely coined in many communications to stakeholders. It has been used to identify substances that are used to create a fragrance in a cosmetic and that are captured by the term “parfum” on cosmetic labels. Those substances can lead to reactions in certain individuals when they come in contact with the skin. To facilitate understanding for the public, Health Canada will continue to use the terminology of “fragrance allergens.” Further explanations that those are indeed contact allergens will be provided in guidance.

v. Full disclosure of all ingredients from a fragrance mixture and addition of sign or symbol on the label

Consumers and non-governmental organizations expressed that all ingredients present in the fragrance mixtures should be disclosed on cosmetic labels. One non-governmental organization suggested that intentional and unintentional ingredients as well as all hazards (carcinogens, endocrine disruptors, irritants) should be disclosed on cosmetic labels, as this would be considered full transparency.

Response: Health Canada understands the comments expressed by the respondents. As indicated in the responses to the pre-consultation, consistent with the current regulatory regime, cosmetics must be safe for use by the consumer under the recommended conditions of use. Health Canada takes a risk-based approach considering both the properties of the substances in products, as well as the amounts to which people are exposed under normal conditions of use, to determine whether there is a risk that needs to be addressed. If an ingredient is harmful through cosmetic exposure, it is not permitted for use in a cosmetic.

Two respondents (individuals) asked that a clear sign or highly visible symbol be present on the product if the list of fragrance ingredients is not separate from the list of ingredients.

Response: Health Canada considered the option of a symbol or sign to advise consumers that a product contains fragrance allergens. The list of ingredients is a core requirement for cosmetics to help consumers make an informed choice. Given that any ingredient could cause a reaction in certain individuals, adding a sign or symbol for fragrance allergens might detract consumers from reading the complete list of ingredients. As such, this suggestion was not incorporated in the amended Regulations. Companies may choose voluntarily to include a sign or symbol for cosmetics that do not contain fragrances. Health Canada will monitor the situation to determine if a sign or symbol should be explored in the future.

vi. Disclosure of priority food allergens

Four respondents (three individuals and one non-governmental organization) expressed that it is important that disclosure of nuts and peanuts as allergens be mandatory.

Response: All ingredients, including potential food allergens, are already required to be disclosed, by their INCI name, in the list of ingredients. As the objective of this amendment is to address disclosure of fragrance allergens that are currently captured by the term “parfum” on the cosmetic label, additional requirements such as alerts for priority food allergens have not been incorporated in the amended Regulations. Health Canada will continue to monitor the state of the science, with regard to priority food allergens when used as ingredients in cosmetics, to determine if alerts for the presence of priority food allergens should be explored as risk management options for cosmetics. Companies may voluntarily choose to add a statement about priority food allergens on cosmetic labels to help consumers easily identify products that contain priority food allergens.

vii. Benefits for individuals that suffer from multiple chemical sensitivity

Four respondents (three individuals and one non-governmental organization) expressed the need for further regulation of chemical substances to reduce unwanted exposure and air pollution and to support the proportion of Canadians suffering from multiple chemical sensitivity (MCS).

Response: Health Canada has a number of tools to take action when an ingredient poses a risk when used in a cosmetic product. The Cosmetic Ingredient Hotlist lists a range of chemical substances that Health Canada believes may cause injury when used in a cosmetic. The objective of the amended Regulations is to increase transparency related to certain fragrance allergens that could be captured under the word “parfum” on the cosmetic labels. This will help people living in Canada, including individuals suffering from MCS, to avoid a product with an ingredient of concern.

Environmental impacts such as air pollution fall under the oversight of Environment and Climate Change Canada. Through various regulations enacted under the Canadian Environmental Protection Act, 1999, the Government of Canada has taken action to reduce volatile organic compound (VOC) emissions from a number of consumer and commercial products including; architectural coatings, automotive refinishing products, asphalt, as well as personal care products, automotive and household maintenance products, adhesives, adhesive removers, sealants and caulks. More information on these regulations can be found on the Volatile organic compounds in consumer and commercial products webpage of the Government of Canada website.

viii. Products advertised as “unscented” or “fragrance free”

Two respondents (individuals) indicated that companies marketing and advertising products as “unscented” or “fragrance free” should not be allowed if the product contains an essential oil or “fragrance.”

Response: Health Canada considers that the use of terms such as “fragrance free” or “unscented” on cosmetic labels to be marketing. As such, they are not considered health or safety information and are not reviewed by Health Canada. The Competition Bureau regulates marketing terms under the Consumer Packaging and Labelling Act and the Competition Act and can take action on those that are false or misleading.

ix. Disclosure of fragrance allergens should go beyond cosmetics only

Three respondents (individuals) advised that disclosure of fragrance allergens should also apply to other product categories such as laundry detergents, paints and construction materials.

Response: Health Canada appreciates the concerns identified with respect to disclosure of fragrance allergens in other product categories; however, those product categories are outside the scope of the Regulations. Other initiatives such as proposed new requirements for consumer chemical products under the Canada Consumer Product Safety Act are aimed at improving health information disclosure, and may address this concern with hazard labelling for other product categories.

B. Comments related to the increased flexibility of disclosure of ingredients for cosmetics available in small packages

Two respondents (individuals) indicated that the list of ingredients should remain on the package and not be moved to a website. Considerations identified were the lack of accessibility for disadvantaged populations, e.g. poverty, age or living-in-care, education, and disability reasons. It was suggested that those sub-populations would be at a disadvantage because of a lack of access to the internet, computer or cell phone or a lack of the technological or literacy skills to find this information on the company website.

Industry associations expressed their full support for added flexibility to move ingredient information “off pack” and onto a digital platform. Six respondents recommended that the scope of such flexibilities should be broadened to all package sizes and not just limited to “smalls.” Stakeholders expressed that access to product information through electronic labelling is particularly useful for consumers with allergies especially since the pandemic increased online shopping. Thus, digital labelling may be viewed as a means that will continue to grow and be the way of the future. One industry stakeholder suggested that the definitions for small packages should align with the criteria in the U.S.

Response: Health Canada agrees that access to ingredient information is important for consumers and is only looking to expand this flexibility when the package size limits the labelling information. In those cases, this flexibility helps maintain other safety labelling information on label. Health Canada is only adding flexibility for disclosure of ingredients on a website when the package size limits the legibility of the labelling information. In those cases, this flexibility helps maintain other safety labelling information on label. Health Canada has considered the various perspectives and will maintain the proposal to increase flexibility for disclosure of ingredients for cosmetics available in small packages only. The accessibility of the list of ingredients is a key element for consumers and helps consumers make an informed choice about the product they choose, to protect their health and safety. Manufacturers and importers are encouraged to provide to consumers who are unable to easily access their website other avenues for further information.

The U.S. requirements for small packages allow for a tear-away sheet or leaflet to be attached to the display unit and disclose the list of ingredients for products that have a package surface area of less than 12 square inches (77.4 square centimetres). Health Canada examined this option but considers that the added flexibility to disclose the list of ingredients on a website, for products available in small packages, provides a modern option while maintaining access to product information for consumers. Thus, suggestions to expand this flexibility to all sizes of packages or defining small packages as in the U.S. were not incorporated in the amended Regulations.

C. Improving oversight of cosmetics

i. Update to the definition of the term “manufacturer”

Three respondents (industry associations) expressed that they were unclear about the reason for modifications proposed to the definition of the term “manufacturer.” All industry stakeholders expressed that the proposed definition must be clarified further. It was raised that placing the onus on the third-party custom manufacturer would be inappropriate as contractual agreements may not be in place to allow this role to be taken on by the third-party manufacturer.

Response: In the amended Regulations, Health Canada has further revised the definition of the term “manufacturer” and included an application provision to further describe who is the manufacturer. This expands who will be captured as a manufacturer and will allow for a foreign brand owner to identify a person in Canada that will act on their behalf. This provides flexibility to industry while ensuring there is a responsible person in Canada for the products.

ii. Addition of the definition of the term “importer”

Industry associations supported the addition of the term “importer” and expressed that it is important the definition maintain the same scope as applied under other legislation such as the Canada Consumer Product Safety Act.

Response: Health Canada is maintaining the definition of the term “importer” in the amended Regulations. Health Canada will update accompanying guidance documents accordingly to inform stakeholders of the definition.

iii. Identification whether the cosmetic is “rinse-off” or “leave-on”

Industry associations supported the addition of the definitions for the terms “leave-on” and “rinse-off” and had no objections to their addition to the cosmetic notification form requirements. Stakeholders advised that the definitions should be aligned with how they are used outside the Regulations to reduce potential issues with compliance and enforcement.

Response: Health Canada will be maintaining the definitions as proposed. These concepts are consistent with the interpretation for similar products regulated by Health Canada, such as natural health products.

iv. Updates to the table for the concentration ranges

One respondent (individual) advised that the increased number of concentration ranges could be viewed to reduce the protection of confidential business information with respect to the formulation of cosmetics. Other respondents were supportive of the changes to the concentration ranges.

Response: Health Canada is maintaining the changes from seven to 13 concentration ranges for the cosmetic notification form because this information is needed for health and safety assessments conducted by Health Canada. The ranges remain sufficiently large to protect the formulation of the cosmetic. Health Canada consistently treats this information in a confidential manner.

v. Strengthening the cosmetic notification requirements

Industry stakeholders had various positions regarding the strengthening of the cosmetic notification requirements.

One respondent (industry association) opposed the amendment stating that there is no evidence to suggest that the system does not work currently and that it is sufficient to stop the sale of unsafe cosmetics.

Response: The new authority to issue a stop sale if a cosmetic notification has not been submitted within the timeframe provides an additional enforcement tool regarding the notification requirements. Currently, tools available under the Regulations are limited to prosecution or seizure from the market, measures that are both time-consuming and resource intensive and may not be proportional to the risk associated with a notification non-compliance. Health Canada currently uses a risk-based approach for compliance and enforcement and this approach will continue.

Two respondents (industry associations) commented on the timeframe to submit the cosmetic notification or to respond to a request for additional information. They indicated that if the regulated party needs to consult a supplier or other party that is abroad, then the ten-day timeline to respond to a request for additional information may be too short. One stakeholder recommended that Health Canada clarify whether this refers to calendar or business days. Another respondent (industry association) suggested that this timeframe be changed to be fifteen days to align with section 16 of the Natural Health Product Regulations and the section C.01.017 of the Food and Drug Regulations.

Response: As per the Interpretation Act, unless specified, the reference to “day” in a regulation is interpreted as a calendar day. The timelines associated with the notification requirements are distinct from the submission of evidence to support the safety of a cosmetic. Requests made under section 29 would specify a timeline that will be determined based on the nature of the request and risk to health. The ten-day regulatory timeline for submitting the notification is ten days after the first sale of the cosmetic. It is expected that industry is gathering relevant information pertaining to the notification before placing a product on the Canadian market so that these timelines can be met.

One respondent (industry association) commented that sending cosmetic notifications when cosmetics are discontinued for sale in Canada creates significant administrative burden. Two respondents indicated that the process for discontinuation should be simplified, either via an email or a system which allows the viewing of existing cosmetic notifications. Another respondent advised that there has been a great deal of outreach with respect to the requirement for discontinuations and that it may be necessary to include further clarity in the Regulations to address under which circumstances a discontinuation should be pursued. Two respondents asked that Health Canada clarify whether a notification for a discontinuation of sale should be submitted when the manufacturer ceases to fabricate the product or when the product is no longer available at retail.

Response: The market status of a cosmetic is pertinent information for Health Canada, namely, for exposure assessments conducted by Health Canada, for example, under the Chemicals Management Plan. Health Canada will be exploring simplification of the process for discontinued sale in the future. The requirement to submit a notification regarding the discontinuation of the sale of a cosmetic applies to the person who submitted the initial cosmetic notification (manufacture and importer). If the manufacturer stopped the sale of the product, they should inform their distributors of this action. With this amendment, compliance with submission of discontinuations to Health Canada is expected to be improved.

vi. Add the ability to request evidence of safety from the importer

One respondent (industry association) proposed that evidence of safety requirements be linked to a “responsible party” or “regulated party” instead of this amendment. Such designation would provide broader clarity and may be more effective and facilitate engagement with appropriate parties for such a request.

Response: Health Canada explored this proposal; however, introducing the concept of a “responsible party” instead of using the proposed terms of “manufacturer’” and “importer” is not being pursued at this time. Importers bring products into Canada and are responsible for the health and safety aspects of the imported cosmetics. That being said, Health Canada recognizes that there may be confidentiality concerns between importers and their suppliers. Importers may continue to seek information to substantiate an evidence of safety request from third parties, such as foreign suppliers. This information can be provided to Health Canada by the importer or directly from the third party.

vii. Modernized contact information on the label

Two consumers and a non-governmental organization advised that Health Canada should adjust this provision so that manufacturers cannot require consumers to give their personal information or to create an account to access information about a cosmetic on the manufacturer’s website.

Response: The information technology structure requirements of such websites is beyond the scope of the amended Regulations. However, companies are encouraged to have their websites structured to provide unconditional access to such information via the website.

A non-governmental organization suggested that Health Canada require a timeframe for the person tasked with responding to inquiries about the cosmetic, especially when an adverse event has occurred. Furthermore, the website should not be permitted to include product advertising or promotional content, and should present Canadian-specific labels.

Response: A requirement for a specific timeframe to respond to the product-related questions sent to the website is outside the scope of the amended Regulations. The content present on such a website must be truthful as there are provisions about false or misleading representations under the Competition Act.

Three respondents (industry associations) requested that Health Canada clarify whether the foreign manufacturers can be indicated on the product label sold in Canada. They expressed that the name of the manufacturer is information that is very important for consumers and requested that this remain a requirement.

Response: Cosmetics are subject to the Consumer Packaging and Labelling Act (CPLA) and its regulations. The amended Regulations do not change the requirements of the CPLA and its regulations, and thus do not prevent the inclusion of labelling information required under the CPLA. The amendment to section 20 of the Regulations will modernize the contact information included on the label, for product-related questions from consumers. The modernized contact information requirement provides flexibility to industry with regard to format and will provide consumers a means to direct their product-related questions about the cosmetic to a contact person, which may include the foreign manufacturer. This information will also be required as part of the cosmetic notification submitted to Health Canada.

D. Coming into force provisions

Comments from industry associations were divided; some expressed that a two-year transition is reasonable, while others advised that the transition period should be aligned with the transition period of six years as described in the most recent amendments to the Natural Health Products Regulations. It was suggested that the two-year timeline does not account for delays currently experienced in the supply chain, nor the additional labelling changes being proposed under other regimes such as the Natural Health Products Regulations.

Response: Health Canada has considered the comments and acknowledges that the industry needs sufficient time to make labelling changes to meet the requirement for fragrance allergens disclosure. In seeking to balance the objective of increasing access to information about fragrance ingredients with the impact on industry, Health Canada has maintained the two-year coming-into-force timelines. This is based on information provided by industry in the 2022 CBA survey and takes into account the average time to sell existing inventories of cosmetics and to modify or redesign labels. Maintaining the current coming-into-force provision will provide people in Canada access to information about certain fragrance allergens to make informed health decisions regarding product purchase and use.

E. Cost to industry

One respondent (industry stakeholder) expressed that they believe that the costs estimated for the disclosure of fragrance allergens on cosmetic labels are likely underestimated.

Response: The costs identified were based on information submitted by industry following a survey of impacted stakeholders. Information was not provided to Health Canada outside the CBA to substantiate higher costs. That being said, Health Canada has now revised the CBA to incorporate the potential increase in costs as a result of the expanded list of fragrance allergens identified for disclosure, when present above a specified concentration.

F. Administrative changes

Two respondents (industry stakeholders) suggested that it would be more appropriate to reference the electronic (web)-based INCI dictionary.

Response: Health Canada has incorporated this change in the revised definition of the term “INCI name.”

Stakeholder engagement on the cost-benefit analysis after prepublication

Health Canada undertook additional targeted outreach in fall 2023, following prepublication, to seek additional information regarding the potential impacts of the shift from 24 to 81 identified fragrance allergens. Ten suppliers responded to the survey, and provided useful insight that further clarifies the range of potential impacts of the amendments, noted below.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an initial assessment was conducted on this regulatory proposal. The assessment concluded that the implementation of the amended Regulations will unlikely impact on the rights, interests or self-government provisions of treaty partners. All people of Canada, including Indigenous Peoples, will benefit from these amended Regulations.

Instrument choice

The following options were considered for this proposal.

Non-regulatory options — Voluntary approach

In 2014, Health Canada approached industry stakeholders to discuss the voluntary disclosure of certain fragrance allergens on the labels of cosmetics in Canada to align with the requirement in the EU. Through those discussions with industry, Health Canada determined that the adoption of a voluntary labelling approach would be low in the absence of a regulatory requirement.

Moreover, with this option, regulated parties would not have an additional flexibility to disclose the ingredients of cosmetics sold in small packages. In addition, Health Canada would not address issues with respect to clarity of definitions, or lack thereof, within the Regulations. The level of detail of information submitted on the cosmetic notification form would not be improved, and compliance and enforcement tools would continue to be limited.

For these reasons, a voluntary approach is not the preferred option.

Regulatory options — Preferred option

The preferred option is to amend the Regulations to introduce a requirement to disclose certain fragrance allergens on cosmetic labels, provide greater flexibility for disclosure of ingredients for cosmetics sold in small packages, improve the oversight of cosmetics, and include changes of an administrative nature.

This option will address the concerns identified by consumers with respect to the disclosure of fragrance allergens on cosmetic labels. In the past, the disclosure of fragrance allergens was also raised in the context of cosmetics during Self-Care Framework consultations. This option will be consistent with the long-term vision of the Self-Care Framework.

This option will also bring cosmetics into closer alignment with digital flexibilities proposed for other self-care products of similar risk, which is an objective of the Self-Care Framework initiative.

Lastly, this option will clarify terminology and responsibilities in the amended Regulations and improve the level of detail to be provided on the cosmetic notification to facilitate its use for risk assessment and risk management purposes. With this option, compliance and enforcement tools will be enhanced, supporting Health Canada’s mandate to minimize the risk associated with the use of cosmetics marketed in Canada.

Regulatory analysis

The regulatory analysis has been revised based on new data and comments received following publication of the proposed amendments in the Canada Gazette, Part I.

Benefits and costs

In 2021, Health Canada retained Cheminfo Services Inc. of Markham, Ontario, to undertake an analysis of the benefits and costs of the amended Regulations. The analysis of benefits and costs is informed by several surveys of cosmetic industry stakeholders (i.e. manufacturers, importers, wholesalers, and retailers, including direct sellers), undertaken in January and July 2022. Health Canada updated the analysis in 2023 to incorporate updated data, reflect feedback received from stakeholders following publication of the proposed amendments in the Canada Gazette, Part I, and account for the expanded list of fragrance allergens referenced in the amended Regulations. An updated CBA Report is available upon request from the contact identified below.

The analysis identified three groups that will be directly impacted by the amendments: cosmetic consumers, cosmetic suppliers and the Government of Canada. Cosmetic consumers will benefit from having access to information about the presence of fragrance allergens in cosmetics, which will strengthen consumer decision making and better protect their health. The costs of the amendments will be borne primarily by cosmetic suppliers for the disclosure of the identified fragrance allergens, although some suppliers are expected to benefit from savings associated with enhanced flexibility for digital disclosure of ingredients in cosmetics sold in small packages. Improvements to the oversight of cosmetics are expected to lead to negligible net implementation costs for the Government of Canada.

Updates to the analysis following prepublication

Two key adjustments to the analysis were made following prepublication: (1) given an increase in the number of fragrance allergens identified in the EC Cosmetic Products Regulation, and following additional targeted outreach to industry stakeholders, the anticipated share of products impacted by the proposal was increased from 5% to 15%; and (2) the estimate of the number of products in commerce in Canada, in 2021, was revised from 228 466 to 99 896 to reflect improved data, acquired by Health Canada, that is better aligned with the definition of cosmetics under the Food and Drugs Act. The latter revision enabled a shift in methodology for three of the cost elements described below. Additional minor updates to the analysis include the following:

As a consequence of these updates, the estimated net cost for quantifiable elements of the proposal increased from $9.94M to $18.31M (present value) over 10 years. However, as indicated in the analysis below, the benefits of the proposal are expected to significantly exceed the costs.

Baseline scenario versus the regulatory option

The baseline scenario describes what would likely happen in the future if the Government of Canada did not make the amendments. In the baseline scenario, there would be no requirement to disclose fragrance allergens on cosmetic labels, no additional flexibility for ingredient labelling for cosmetics sold in small packages, no improvements to oversight, and no administrative changes. However, surveys of industry in 2022 and 2023 found that a significant share of cosmetic products in commerce in Canada either (a) do not contain fragrance allergens; (b) already disclose fragrance allergens; or (c) will comply with fragrance allergen disclosure requirements under the EC Cosmetic Products Regulation, with which the amendments align.

Under the regulatory scenario, the amendments are made as described above, including the introduction of the requirement to disclose certain fragrance allergens on cosmetic labels, and the provision of flexibility for the disclosure of ingredients for cosmetics sold in small packages.

The incremental impact of the amendments is assessed by comparing these two scenarios, applying the following core assumptions.

Cosmetics industry background

The analysis uses three key market variables: the size of the Canadian cosmetic market, the share of that market supplied by domestic manufacturers, and the number of cosmetic products in commerce in Canada.

The size of Canada’s cosmetics market is used, in combination with data received via surveys of cosmetic suppliers, to estimate several variables in the analysis. Complicating any estimate of the size of Canada’s cosmetics market, however, is that the definition of cosmetics under the Food and Drugs Act is not fully aligned with definitions used by reliable data providers. For example, economic and trade data through Statistics Canada include personal care products that are beyond the scope of the definition of cosmetics under the Food and Drugs Act. Using several alternative estimates, for the purposes of this analysis, cosmetic expenditures in Canada are assumed to have been in the range of $10.32B to $11.40B in 2021, with an expected value of $10.86B, rising to between $10.95B and $12.17B in 2024, with an expected value of $11.58B, and growing at 2% per year thereafter. Estimating the number of Canadian cosmetic manufacturers is similarly challenging, given that many of the 764 manufacturers included in the NAICS soap, cleaning compound, and toilet preparation manufacturing sector (NAICS 3256), in 2022, are expected to manufacture a range of products, not all of which are relevant (i.e. cosmetics as defined under the Regulations and/or non-cosmetic products). Despite the challenge to obtaining a precise estimate of the number of impacted businesses, it is clear from the available data that many of these manufacturers are small businesses. Of the 764 establishments identified in NAICS 3256, just 26 are identified as medium or large businesses, with 738 identified as small, micro, non-employer and indeterminate-sized businesses. Potential impacts pertaining to small businesses are therefore considered below.

As noted with the market data above, it is not possible to isolate trade data specific to cosmetics as defined under the Food and Drugs Act, and it is therefore difficult to clearly establish the share of the Canadian market supplied by domestic manufacturers. For the purposes of this analysis, a number of information sources are used, and the domestic share has been revised to 43.5% (from 38% at prepublication).

Recognizing the lack of precision on the number of products in commerce in Canada, following prepublication, Health Canada procured third-party data and undertook an extensive review to identify products that are aligned with the definition of “cosmetic” under the Food and Drugs Act. This analysis identified 99 896 products in commerce in 2021 (using NielsenIQ data and accounting for an assumption that 10% of products are sold direct-to-consumer), less than the 228 466 products identified at prepublication that were estimated using a very small sample of industry survey responses. Between 2024 and 2033, the number of products is expected to increase from 106 010 to 126 692.

Costs
Direct costs to industry

The amendments are anticipated to result in incremental costs to industry as follows: (1) fragrance allergen disclosure costs; (2) re-notification costs for existing products; (3) notification costs for new products; and (4) costs associated with the identification of “rinse-off” and “leave-on” products in future notifications.

(1) One-time costs for disclosure of fragrance allergens on cosmetic labels

The requirement to disclose fragrance allergens above the prescribed concentration limit will result in disclosure costs for some cosmetic suppliers (e.g. for ingredient research, testing, label redesign and production). These impacts would be limited to cosmetic industry stakeholders that continue to supply cosmetics in the Canadian market that contain one or more of the specified fragrance allergens above the threshold limits.

The CBA consultation process asked cosmetic industry stakeholders for estimates of the one-time costs (e.g. ingredient research, label design) and recurring costs (e.g. packaging reconfigurations). It is assumed that one-time costs will include any testing and analysis to determine whether their cosmetics contain one or more of the identified fragrance allergens and whether they meet the thresholds for disclosure. A wide range of estimates were provided by the industry, from $625 to more than $10,000 per product, and it is assumed that the average disclosure cost would be $2,500 per product. Most survey respondents did not identify any ongoing incremental compliance costs.

Disclosure requirements for existing products (i.e. products introduced prior to August 1, 2026) will be introduced in two stages over four years: first, disclosure of the presence of any of the 24 EC-listed fragrance allergens will be required by mid-2026 (two years following registration); and, second, disclosure of the presence of any of the fragrance allergens from the expanded EC list will be required by August 1, 2028 (for more information, see the implementation section of the RIAS below). For the purposes of the analysis, it is assumed that: 1) ingredient research and testing costs would be incurred once, in 2025; 2) incremental label design and relabelling costs would be incurred in 2025; and 3) label design and relabelling costs prior to the requirement to disclose any of the substances on the expanded EC list, will be integrated into routine label updates between 2026 and 2028, with no incremental cost. This final assumption is consistent with feedback from survey respondents, advising that the average time a label was used before it was modified or redesigned, under the baseline scenario, was up to two years. It is therefore reasonable to expect that many suppliers would have an opportunity to update their labels as part of a routine update schedule, reducing the associated incremental costs of the amendments. In fact, although full incremental costs for existing products are assumed in 2025, this insight suggests that suppliers may have time to further reduce costs by integrating fragrance allergen labelling as part of routine label updates prior to 2026 as well. These earlier potential savings are excluded from the analysis.

One-time costs would also be borne for any new products containing fragrance allergens (i.e. products introduced after August 1, 2026). Although these new products may not incur incremental costs for activities such as label redesign (the initial design of the label could incorporate fragrance allergens, if applicable), it is assumed that other incremental costs would be incurred (e.g. for ingredient research and testing). In the absence of a clear breakdown of costs for these activities, the full disclosure cost is assumed to be incurred by impacted new products. The number of new products is assumed to be equal to the incremental growth in product count (2% per year).

The one-time costs for disclosure of fragrance allergens on cosmetic labels were calculated as follows: Number of products × Canadian manufacturer share of the market (43.5%) × 15% of products containing fragrance allergens × $2,500 average disclosure cost per product. This calculation yields a one-time cost of $17.64M in 2025 and $0.35M to $0.41M per year from 2026 to 2033, or $18.58M (present value) over 10 years, accounting for approximately 99% of the costs of the amendments.

(2) Costs to submit an amended cosmetic notification for existing products containing fragrance allergens

Under the Regulations, suppliers are required to submit a cosmetic notification form within 10 days of the first sale of a cosmetic in Canada. The form includes information regarding the formulation of the products, such as ingredients and their concentration or concentration ranges. With the amendments, suppliers of products that are required to disclose additional fragrance ingredients would be required to amend their forms and resubmit them to Health Canada.

With the availability of improved product data (see above), the methodology for estimating these costs has changed, relative to prepublication. One-time costs of amending cosmetic notifications for the disclosure of fragrance allergens were calculated as follows: Number of products disclosing fragrance allergens in 2025 × seven minutes (time taken to access the notification form, amend it, and review it) × average wage of $50 per hour. This calculation yields a one-time cost of $41,157, or $38,465 (present value) over 10 years.

(3) Costs to submit a cosmetic notification for new cosmetics that contain fragrance allergens

Once the amendments are in force, cosmetic suppliers will be required to identify fragrance allergens in their cosmetic notification forms for any new notifications submitted to Health Canada, when present above the prescribed limit. The incremental cost of including fragrance allergens on new notifications is expected to be very low.

As with the preceding cost estimate, with the availability of improved product data, the methodology for estimating these costs has changed, relative to prepublication. Annual costs, from 2026 to 2033, were calculated as follows: Number of notifications associated with new products × Canadian manufacturer share of the market (43.5%) × 15% of products containing fragrance allergens × four minutes (incremental time taken for the identification of fragrance allergens in the form) × average wage of $50 per hour. This calculation yields annual costs increasing from $470 in 2026 to $540 in 2033, or $2,797 (present value) over 10 years.

(4) Costs to identify whether a cosmetic is “rinse-off” or “leave-on” on the cosmetic notification

Prior to the amendments, suppliers were not required to include, in the online cosmetic notification form, information on whether a cosmetic is “rinse-off” or “leave-on.” The amendments add this requirement, and in practice, a “check box” will be added to the online form. This would be required for any new or amended cosmetic notification. This requirement is not retroactive; however, cosmetics that had a previous notification would have to identify whether the product is “leave-on” or “rinse-off” when future amendments are submitted.

Annual costs, from 2025 to 2033 (this requirement would come into force six months after registration), were calculated as follows: Anticipated number of notifications × Canadian manufacturer share of the market (43.5%) × ½ minute (incremental time taken to check the box) × average wage of $50 per hour. This calculation yields annual costs increasing from $12,405 in 2025 to $14,534 in 2033, or $86,820 (present value) over 10 years.

Other potential impacts on industry

Industry stakeholders identified costs associated with product reformulation and product withdrawal as potential impacts. These impacts are not included in the analysis because there is no requirement in the amendments for suppliers to reformulate or discontinue product lines containing fragrance allergens. Details about these and other potential impacts are described below.

(1) Product reformulation costs

The amendments do not require that companies reformulate their products, and reformulation costs are therefore not included in the cost calculation. Some companies may decide that their lowest-cost or preferred option would be to reformulate rather than disclose fragrance allergens. This would be considered a business decision and, as such, a voluntary action not required by the amendments. Six of the 123 companies in one survey indicated that they would reformulate some products. The market value of these products was approximately $0.25M in the survey sample, or about $1.3M when extrapolated to the national context.

For illustrative purposes, Health Canada has estimated potential reformulation costs. Surveyed suppliers identified a total of $50,000 in one-time reformulation costs (anticipated in 2024) and annual cost increases of $7,500 (e.g. for higher-cost ingredients as replacements of the fragrance allergens). This would translate into national cost estimates of $270,000 in one-time costs and approximately $40,000 in annual costs, or nearly $640,000 (undiscounted value) over 10 years.

(2) Product withdrawal costs

Six of the 123 companies that responded to one survey reported that they would withdraw products from the Canadian market. One large company reported that it might withdraw approximately 10% of its products rather than disclose the fragrance allergens or reformulate. The market value of these products may total approximately $70M. The remainder of the companies suggested they might withdraw approximately $20M in products. This extrapolates to a market total of about $110M in other withdrawn products — containing fragrance allergens — or about 1% of the national annual market.

(3) Supply chain de-harmonization

One company identified a significant cost to de-harmonize its supply chains for Canada and the United States, since the United States does not require fragrance allergen disclosure. These costs were described as including any cost associated with de-harmonizing North American packages, including the creation of separate manufacturing lines, as well as maintenance and management of additional product lines (e.g. inventory and distribution controls, duplicate artwork) on an ongoing basis. This respondent also assumed that all of their products contain fragrance allergens. As this information appears to be an outlier in the overall survey, this cost was not included in the analysis; however, a higher-cost scenario is considered in the sensitivity analysis.

(4) Stranded inventory

Stakeholder surveys found that the average time to sell existing inventories of cosmetics is eight months and the average time that a label is used before it is modified or redesigned is approximately two years. Given the two-year coming-into-force period, it is expected that there will be negligible costs associated with stranded inventories.

Other potential impacts
(1) Impacts on cosmetic prices

The analysis assumes that costs incurred by suppliers would not be “passed on” to consumers as higher prices, primarily due to the competitive nature of the market and the overall low magnitude of these costs as a share of Canada’s cosmetic market. Given that costs are not expected to be passed on, costs incurred by foreign suppliers are not included in the analysis since these would not be incurred in Canada. Comments were received following prepublication challenging this assumption. While the analysis retains the assumption, Health Canada has assessed the potential impact, if costs were passed along to consumers, and found that impacts on cosmetic prices remain negligible.

It should also be noted that a) in the event that suppliers do pass costs on to consumers, there would be a corresponding decrease in costs borne by suppliers; b) the total annualized net cost, if all costs (and savings, described below, due to the enhanced flexibility for digital disclosure) associated with domestic and imported products were passed on to consumers, would represent just 0.05% of the total market; and c) costs would only be passed along for products containing fragrance allergens that do not disclose these allergens under the baseline scenario (the majority of products that do not contain fragrance allergens or already identify fragrance allergens on their labels would be unaffected, as would their consumers).

(2) Costs for Government

Incremental costs for Health Canada to modify the cosmetic notification form (e.g. addition of checkboxes for “leave-on” and “rinse-off”) and incorporate compliance and enforcement activities for the fragrance allergen disclosure requirement (e.g. costs for testing, compliance verification, sampling and inspection) are expected to be negligible, as they will be incorporated into planned updates to the cosmetic notification form and regular compliance verification cycles.

Benefits

The amendments are anticipated to yield three main benefits: (1) benefits for cosmetic consumers due to fragrance allergen disclosure; (2) savings for suppliers due to the availability of digital disclosure flexibilities for cosmetics sold in small packages; and (3) compliance and enforcement cost savings for the Government of Canada.

(1) Benefits of fragrance allergen disclosure

The primary benefit of the amendments would accrue to people in Canada who may suffer from ACD if exposed to any of the 81 fragrance allergens that are currently captured by the term “parfum.” For the purposes of this analysis, this population was estimated following a literature review of analyses undertaken in the European context,footnote 11 and assumes a comparable prevalence in Canada. Based on this review, it is assumed that between 1.5% and 9.0% of people in Canada may suffer from ACD if exposed to these allergens. Using Statistics Canada’s population projection, the analysis assumes that 0.60M to 3.59M individuals may be susceptible in 2024, and that this range would increase to 0.66M to 3.97M in 2033.

With the amendments, affected Canadians will be better able to avoid using cosmetic products that contain these ingredients, thereby reducing the likelihood that they will experience an allergic reaction, such as skin rashes, hives, redness or other irritation. These benefits could not be quantified or monetized given uncertainty regarding a) the prevalence of ACD in Canada; b) the share of consumers who, under the baseline scenario, proactively seek out reliably fragrance-free products; c) the extent to which consumers will change their habits based on improved labelling; and d) the value of avoiding impacts associated with medical and dermatologist consultations and treatments, lost time and income resulting from the need to take sick days from work, reduced productivity at work, and a lower quality of life from the discomfort and impacts of ACD.

In addition, the amendments will enhance transparency about the presence of chemicals, helping all people in Canada make informed decisions about the products that they use and the ingredients in those products that may impact their health.

Although these benefits could not be reliably quantified or monetized, Health Canada has undertaken a break-even analysis (see below) and expects that these benefits will significantly exceed the costs.

(2) Supplier savings due to enhanced flexibility for digital disclosure for cosmetics sold in small packages

The amendment adds flexibility for the disclosure of ingredients for cosmetics sold in small packages. This flexibility will allow for the list of ingredients, including fragrance allergens, to be disclosed on a website instead of the current options of a tape, tag or card. The cosmetics would need to have an appropriate bilingual statement advising where the list of ingredients can be found.

Based on survey responses, it is not expected that the digital disclosure of ingredients will generate one-time savings. However, it is expected that there will be annual savings that will accrue from 2025 and beyond. Survey respondents with a combined market share of $2B (18.4% of the expected 2021 market size of $10.86B) reported that annual cost savings of $22 500 would have accrued, in 2021, with this flexibility, or $122 178 market-wide. By 2025, when the flexibility comes into force, the market-wide savings are projected to be $132 863. The Canadian supplier share of these savings is estimated to be $57 795 in 2025, increasing to $67 624 in 2033.

Overall, the supplier savings due to this enhanced flexibility is estimated to be $404 253 (present value) over 10 years.

(3) Compliance and enforcement cost savings for the Government of Canada

The amendments will yield several incremental benefits for the Government of Canada:

Results of break-even analysis

A review of the limited available literature was undertaken to assess the impact of fragrance allergens and the potential benefits of the amendments in terms of avoided medical costs, improved quality of life and other impacts. Ultimately, there is strong evidence of the significant, negative impact of fragrance allergen exposure in the European context, and Health Canada expects that these impacts are also relevant in the Canadian context.

A break-even analysis can be used to inform the analysis of benefits and costs, and conclusions regarding the merits of a proposal, when a lack of data prevents the robust estimation and monetization of key variables. A break-even analysis, which can take many different approaches, explores what thresholds specific uncertain variables would need to reach for the analysis to yield a net benefit.

Efforts were made to identify existing estimates of the “willingness-to-pay” (WTP) to avoid specific fragrance allergens in cosmetic products; that is, the “maximum amount an individual is willing to pay to acquire an outcome.”footnote 12 However, none were found, and undertaking primary research through revealed and stated preference studies, which can be costly and time consuming, was considered to be outside the scope of work for the amendments.

A break-even analysis was conducted to determine a WTP threshold that would be required to offset the net discounted costs of the regulatory proposal. This analysis gives an indication of the value Canadians with allergies and sensitivities to fragrance allergens would need to place on this information for the imposed costs to be justified.

As indicated in the cost-benefit statement below, the amendments are estimated to result in a monetized net cost of $18.31M. The required WTP was estimated by solving for the value that, when multiplied by the estimated number of people in Canada with ACD in each year, would result in a total present value equal to or greater than monetized net costs (this analysis assumes that between 1.5% and 9.0% of people in Canada may experience ACD if exposed to fragrance allergens). The analysis finds that, if people in Canada living with ACD were each willing to pay between $0.65 and $3.88 per year, then the amendments would yield a net benefit. Given that on average Canadian households spend $699 on cosmetics per year (approximately $291 per person based on an average household size of 2.4), this amount would be considered a relatively small additional expense for Canadian households (an average increase of one half of 1%). A value of $0.65 to $3.88 per year is also small in relation to the cost of a dermatologist visit and many over-the-counter medicines.

Health Canada has also taken into consideration literature, not specific to fragrance allergens in cosmetics, that seeks to value the WTP to avoid mild and chronic ACD and related skin conditions, and their impacts, in the EU. Converting to 2022 Canadian dollars, the WTP to avoid a single, mild episode lasting two weeks was estimated to be $371, while the estimate for a severe, chronic case was $1 723.footnote 13 Although these estimates were not derived in the Canadian context or for cosmetic fragrance allergen disclosure, they illustrate the potential order of magnitude of individual WTP to avoid ACD. Consider that, if it is assumed, conservatively, that just 1.5% of people in Canada may experience ACD if exposed to fragrance allergens, and it is assumed that the value of avoiding a mild episode is $371, the amendments would need to prevent between 6 293 and 6 947 mild episodes per year (i.e. by enabling individuals to avoid fragrance allergen exposure through enhanced disclosure), in order for the amendments to yield a net benefit. This would mean preventing episodes for just 1.05% of the population in Canada who may experience ACD if exposed to fragrance allergens. Relaxing these assumptions, to allow for a larger population and the potential to prevent severe episodes, and the net benefit of the amendments would grow significantly.

Given the available evidence, Health Canada expects that the benefits of the amendments will significantly exceed the costs.

Cost-benefit statement
Table 2: Monetized costs
Impacted stakeholder Description of cost Year 1 Year 2 Year 10 Total
(present value)		 Annualized value
Industry Fragrance allergen disclosure costs $0 $17,638,733 $405,227 $18,582,214 $2,645,689
Re-notification costs for existing products $0 $41,157 $0 $38,465 $5,476
Notification costs for future notifications $0 $0 $540 $2,797 $398
"Rinse-off" or "leave-on" notification costs $0 $12,405 $14,534 $86,820 $12,361
All stakeholders Total costs $0 $17,692,294 $420,301 $18,710,295 $2,663,925
Table 3: Monetized benefits
Impacted stakeholder Description of benefit Year 1 Year 2 Year 10 Total
(present value)		 Annualized value
Industry Cost saving from the use of a website for disclosure of ingredients for cosmetics sold in small packages $0 $57,795 $67,624 $404,253 $57,556
All stakeholders Total benefits $0 $57,795 $67,624 $404,253 $57,556
Table 4: Summary of monetized costs and benefits
Impacts Year 1 Year 2 Year 10 Total
(present value)		 Annualized value
Total costs $0 $17,692,294 $420,301 $18,710,295 $2,663,925
Total benefits $0 $57,795 $67,624 $404,253 $57,556
NET COSTS $0 $17,634,499 $352,678 $18,306,042 $2,606,369
Quantified (non-$) and qualitative impacts

Positive impacts

Negative impacts

Sensitivity analysis

Health Canada recognizes that there is uncertainty related to several key variables in this analysis, and has therefore undertaken a sensitivity analysis to estimate impacts using plausible alternative values for these variables. As indicated above, disclosure costs represent approximately 99% of the total cost of the proposal, and key inputs to the disclosure cost estimate are therefore the focus of this sensitivity analysis, specifically: (1) the share of products impacted by the proposal, (2) the average disclosure cost per product, and (3) the ability of suppliers (including foreign suppliers) to pass costs on to consumers. The results of the sensitivity analysis are presented using three outcome variables: the total and net cost of the amendments, the annualized net cost as a share of the Canadian cosmetic market (using average market size from 2024 to 2033 of $12.6B), and the WTP threshold (as per the break-even analysis above). As shown in Table 5, adjustments in these key variables would increase the overall cost of the proposal; however, in all cases the expected annualized cost as a share of the market remains very low (less than 0.09%), and the break-even WTP thresholds remain well below plausible benefit estimates identified above ($371 to 1 723).

Table 5: Sensitivity analysis
Variable Total and Net Cost Annualized costs / cosmetics market Break-Even WTP Threshold Notes
Main estimates

Total cost = $18.71 M

Net cost = $18.31 M

 0.021% $0.65 to $3.88  
Sensitivity estimates

Share of cosmetic products impacted by the amendments

Main: 15%

Sensitivity: 20%

Total cost = $24.92 M

Net cost = $24.54 M

 0.028% $0.87 to $5.20 The estimates of the share of products that would be impacted, both the 5% used at prepublication and the 15% used in the current analysis, were based on relatively small samples of suppliers. To account for the possibility that the share has been underestimated, a higher share, 20%, is tested in this sensitivity analysis.

Average disclosure cost per product

Main: $2 500

Sensitivity: $10 000

Total cost = $74.46 M

Net cost = $74.05 M

 0.083% $2.62 to $15.70 Stakeholder feedback indicated that disclosure costs could be higher for some suppliers. While Health Canada believes that the average cost estimate is appropriate ($2 500), this sensitivity analysis considers a high-cost scenario.

Costs passed on to consumers

Main: 0%

Sensitivity: 100%

Total cost = $43.01 M

Net cost = $42.08 M

 0.047% $1.48 to $8.90 The main analysis assumes that costs would not be passed on to consumers via higher prices (see above). Consequently, costs incurred outside Canada (i.e., by foreign suppliers) would not be passed on to consumers in Canada and are excluded from the analysis. One stakeholder challenged this assumption, and for illustrative purposes, the sensitivity analysis assesses a scenario whereby all costs are passed on from suppliers to consumers, including costs incurred by foreign suppliers. While costs are presented in aggregate in this scenario, it is noted that for the anticipated 85% of products that are not incrementally impacted by the amendments, there would be no costs associated with fragrance allergen disclosure and thus no impact on prices. For the remaining 15% of products, annualized costs as a share of the impacted product market would be just 0.317%. If all these costs were passed on to consumers, this would imply a price increase of approximately three cents per $10 of cosmetic products.

Small business lens

Analysis under the small business lens concluded that the amendments will impact small businesses. During consultations with cosmetic industry stakeholders, businesses were explicitly asked whether they were smallfootnote 14 and whether they would face any unique impacts due to their smaller size.

Eighty-one of the businesses identified themselves as a small business. Of these, 73 (90%) did not identify any additional impacts. The remaining small businesses that identified unique impacts indicated the following:

Small businesses may face challenges in obtaining information through the supply chain on the exact fragrance ingredients in their manufactured products. This could be due to factors, such as unwillingness from the fragrance ingredient supplier to identify fragrance allergens in their ingredients/mixtures for businesses with only limited buying power. If a supplier does not provide the requested information, the business would need to incur costs to independently test products for the presence of the specified fragrance allergens.

Monetizing the impact of the amendments on individual small businesses is complicated by the uncertainty regarding a) the overall number of small businesses supplying cosmetics in Canada, b) the share of total cost attributable to small businesses, and c) the share of small businesses impacted by the amendments. Assuming that all 738 non-medium- or large-sized businesses can be considered small (from NAICS 3256, as described above), that these small businesses account for up to 45% of domestic-manufactured, impacted products and costs, and that up to 50% of small businesses manufacture impacted products (369 businesses), then total costs attributable to small businesses would be $8.42M (present value) over 10 years, including $8.36M in compliance costs and $57,636 in administrative costs, or $22,817 in total cost per impacted business (present value) over 10 years. In order to reduce impacts for all businesses (including small businesses) while achieving the policy objectives, the proposal adds a flexible option to disclose ingredients (including fragrance allergens) on a website for cosmetics sold in small packages. This flexibility will be available to businesses six months after the amendments to the Regulations are registered. The cost savings for small businesses from the added flexibility to disclose the list of ingredients on a website for cosmetics sold in small packages is estimated to be $181,914 (present value) over 10 years (see Table 6, Table 7 and Table 8 below).

During consultations for the CBA, stakeholder responses revealed that the average time reported to sell existing inventories of cosmetics was eight months, and that, on average, a label was modified or redesigned within two years. Health Canada therefore developed a transition plan that takes this turnover into consideration, to mitigate impacts for all businesses, including small businesses. A two-year period following registration, before the disclosure requirements come into force, is expected to offer sufficient time to sell inventory and update labels, if required. Small businesses are therefore likely to have an opportunity to update their labels as part of their routine update schedules, significantly reducing the associated incremental costs. It is also important to note that costs would not be incurred by all small businesses. For any business (including small businesses) that a) does or will not produce cosmetics containing any of the listed fragrance allergens, or b) discloses the presence of fragrance allergens under the baseline scenario (including to comply with aligned requirements in the EU), incremental disclosure costs are likely to be significantly lower or nil. Costs will be most significant for those businesses that, in the absence of the amendments, would supply cosmetics containing undisclosed fragrance allergens that pose a risk to the health of many people in Canada.

Small business lens summary
Table 6: Compliance costs
Activity Annualized value Total (Present value)
Cost of fragrance disclosure (one time) $1,190,560 $8,361,996
Cost savings from digital disclosure (ongoing) −$25,900 -$181,914
Net compliance cost $1,164,660 $8,180,083
Table 7: Administrative costs
Activity Annualized value Total (Present value)
Cost of renotification (for cosmetics containing fragrance allergens) $2,464 $17,309
Cost of future notifications (for cosmetics containing fragrance allergens) $179 $1,258
Cost of future notifications (for "rinse-off" or "leave-on") $5,563 $39,069
Total administrative cost $8,206 $57,636
Table 8: Total compliance and administrative costs
Totals Annualized value Total (Present value)
Total net cost (all impacted small businesses) $1,172,866 $8,237,719
Cost per impacted small business $3,179 $22,324

One-for-one rule

The one-for-one rule applies since there would be an incremental increase in administrative burden on business, and the proposal is considered a burden “in” under the rule, as per the Policy on Limiting Regulatory Burden on Business. The Policy defines “administrative costs” as the direct, monetized increase or decrease in costs to businesses that result from a regulatory change that increases or decreases administrative burden in relation to a baseline scenario.

The following three components of the amended Regulations, also described in the CBA, will lead to an increased administrative burden:

For the purposes of the one-for-one rule, these costs are adjusted as per the Red Tape Reduction Regulations, which require that estimates are calculated using 2012 dollars, and discounted to 2012, using a 7% discount rate. With these adjustments, annualized administrative costs to industry are estimated to be $6,517, or $8.53 per business (assuming 764 businesses incurring these costs). These estimates are reduced, relative to the estimates provided at prepublication, due to adjustments described throughout the CBA, notably the improved product count estimates.

Regulatory cooperation and alignment

In developing this regulatory proposal, Canada considered the requirements of its largest trading partners of cosmetics (the EU and the United States), as well as those of other international regulatory authorities. The elements of these amendments increase alignment with certain jurisdictions, remain neutral with others, and do not introduce any trade barriers.

Fragrance allergen disclosure
European Union

The amendments will increase alignment with current requirements for disclosure of certain fragrance allergens in the EU. With these amendments, Canada and the EU will be aligned with respect to the substances, minimum concentration, and format of disclosure, as well as the transition time for any future additional substances that are identified as fragrance allergens in the EU.

United States

The U.S. Food and Drug Administration (USFDA) does not require the disclosure of fragrance allergens on cosmetic labels at this time. On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act, 2023, which includes the Modernization of Cosmetics Regulation Act of 2022 (MoCRA). The USFDA must establish regulations that identify fragrance allergens that must be disclosed on the label of a cosmetic. The USFDA must consider international, state, and local requirements for allergen disclosure, including the EU’s substances and format for these requirements. Additionally, Congress has authorized the USFDA to establish threshold levels of substances subject to disclosure. A proposed rule must be issued by the USFDA within 18 months after the enactment of MoCRA (i.e. by June 29, 2024), and a final rule must be issued no later than 180 days after the close of the public comment period for the proposed rule. When the rule is finalized, the list of fragrance allergens identified for disclosure will be known. It is expected that, at the minimum, disclosure of internationally recognized fragrance allergens will be required.

Other jurisdictions

Many other cosmetic regulators around the globe follow the same approach in regulating cosmetics as the EU, including in the disclosure of fragrance allergens, with which Canada will be aligned. For example, health authorities in Brazil and Turkey currently require the disclosure of 24 fragrance allergens as per the EC Cosmetic Products Regulation prior to the adoption of the expanded list by the EC. The United Kingdom and Norway incorporate the latest EC requirements for cosmetics.

Greater flexibility for ingredient lists of cosmetics sold in small packages
European Union

The flexibilities available in the EU for ingredient lists of cosmetics sold in small packages do not include publication on a website. Currently, cosmetics sold in small packages in the EU are permitted to disclose ingredient information on a fixed sign at the point of sale. Therefore, the flexibility to publish on a website (for Canada), coupled with the current flexibility when sold in the EU (use of a fixed sign), could allow for a single Canada-EU label.

In addition, the EU is presently consulting on a broad initiative for digitalization of information required on the labels of various products available to consumers, including cosmetics. Some of the considerations include what kind of label information should be on-pack, off-pack (i.e. digital), or both.

United States

The flexibilities available in the United States for ingredient lists of cosmetics sold in small packages do not explicitly include publication on a website. However, off-pack disclosure of ingredients in the form of a tear-away pad or leaflet is permitted under the following conditions:

Therefore, the flexibility to publish the list of ingredients on a website (for Canada), coupled with the current flexibility when sold in the United States (use of leaflets or tear-away pads at the point of sale), will allow for a single Canada-U.S. label.

Other jurisdictions

Health Canada is not aware of any other jurisdictions that expressly permit the digital publication of ingredient lists of cosmetics sold in small packages. For those jurisdictions that follow the EU regulatory framework, the proposed amendments could allow for a single label as described above.

Within Canada, this added flexibility for disclosure of ingredients of cosmetics sold in small packages complements labelling approaches being proposed under the Self-Care Framework.

Improving the oversight of cosmetics

Generally, the Canadian regulatory framework for cosmetics was more aligned with the EU. For example, both jurisdictions require the notification of products and use lists to manage hundreds of cosmetic ingredients described as prohibited or whose concentration is restricted in cosmetics. Under MoCRA, the notification of cosmetics, including their ingredients, became mandatory as of December 29, 2023 (although the USFDA has announced their intention to delay enforcement of the requirements related to cosmetic product listing for an additional six months after the initial December 29, 2023, deadline). With product listing requirements under MoCRA, the Canadian regulatory framework will also be closely aligned with the U.S. framework for cosmetics.

Below are the elements relating to the improvement of the oversight of cosmetics.

Update the definition of “manufacturer” and add a definition for “importer”

Strengthen the cosmetic notification requirement

Removal of distributor information from the cosmetic notification

Add a requirement to identify products as “rinse-off” or “leave-on” on the cosmetic notification

Add a requirement to identify ingredients by their INCI names on the cosmetic notification

Amend the table of concentration ranges for the cosmetic notification

Add the ability to request evidence of safety from the importer

Administrative updates

None of the amendments identified as being administrative in nature introduce trade barriers or misalignment. All modifications either update or provide clarity to existing requirements.

Strategic environmental assessment

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

The label changes requiring the disclosure of certain fragrance allergens on cosmetic labels are expected to have minimal environmental impact. The coming-into-force period of two years will provide ample time to incorporate the new labelling requirement without having to relabel or dispose of products that are currently available for sale at retail.

Gender-based analysis plus

These amended Regulations are not expected to have any negative impacts on particular groups of people in Canada on the basis of sex, gender, race, or ethnicity. However, it is likely that some population groups could be differentially impacted.

Considerations for the disclosure of certain fragrance allergens on the cosmetic labels, when present above a specified limit

The amended Regulations are expected to protect the health and safety of all people in Canada, regardless of their gender, age, education, language, geography, culture and income. The list of ingredients disclosed on cosmetic labels is a cornerstone requirement for cosmetics, which helps people in Canada make informed decisions when purchasing and using cosmetics.

According to Health Canada’s public opinion research, the brand name of a cosmetic is the most common element on a product label that is reviewed at every purchase. Dosage, directions on how to use the product, and product warnings are the next most frequently looked at labelling elements on cosmetics. However, only a minority of people in Canada (39–49%) do so at every purchase or during every use. Women and older people in Canada (55 years or older) are both more likely to search for safety information from various sources. For all three categories of self-care products (natural health products, non-prescription drugs, and cosmetics), women are significantly more likely than men to rely on the name brand or reputation of a product, to read product labels or inserts, and to do research online.footnote 15 Thus, this initiative could have a greater positive impact on women, as it will facilitate access to safety information (presence of certain fragrance allergens) disclosed on cosmetics labels.

It has been reported that women use more cosmetic products; as a result, they tend to report adverse reactions more frequently. On average, adults use 9 cosmetic products daily, and more than 25% of women use 15 or more. Similarly, data from North America estimates that the average woman uses 12 personal care products daily, while the average man uses 6 personal care products each day.footnote 16 There is no evidence, however, to suggest that women are more frequently allergic to fragrance allergens than men, nor that they would benefit more from the disclosure of fragrance allergens, as this will benefit all individuals who are aware they have ACD to a fragrance ingredient. It could potentially be an added benefit for patients with eczema, as the frequency of ACD in reaction to fragrance ingredients appears to be higher for such individuals (between 6% and 14%).footnote 17

Considerations for the amendment to add a flexibility for disclosure of ingredients for cosmetics sold in small packages

The amended Regulations will add a flexibility for the disclosure of all ingredients on cosmetic labels when sold in small packages. In addition to the option currently available that allows the list of ingredients to be set out on a tag, tape or card attached to the container if the legibility requirements cannot otherwise be met, the amendment will add the option to disclose the list of ingredients on a website, including on the label only a statement advising where consumers will be able to find this information.

The use of a tag, tape or card affixed to the container to disclose the list of ingredients for cosmetics sold in small packages will still be permitted. At this time, it is unclear if the use of a website will be widely implemented by manufacturers and importers of cosmetics.

This added flexibility will require access to the Internet. The vast majority of people in Canada have access to the Internet in their homes or use a smartphone device. However, people in Canada with no access to the Internet, or with limited, slow, or unreliable Internet access, could be negatively impacted. This could impact those who live in remote or rural communities, seniors, individuals of lower socio-economic status and households on First Nation reserves.

Although most people in Canada had access to the Internet in 2020, 6% reported that they did not have Internet access at home. Of those without home access, 26% reported the cost of Internet service as the reason, and 13% cited the cost of equipment. With regard to households of those aged 65 and older, 83% had access to the Internet.footnote 18

Manufacturers and importers are encouraged to provide, to consumers who are unable to easily access their website, other avenues to obtain information about the list of ingredients for cosmetics available in small packages.

Implementation, compliance and enforcement, and service standards

Implementation

The amended Regulations will come into force in two parts: (1) all amendments, with the exception of those related to the disclosure of fragrance allergens on cosmetic labels, will come into force 180 days following registration; and (2) the provisions regarding the disclosure of fragrance allergens will come into force two years following the date of registration.

During the period between registration and the first coming-into-force date, the Regulations will remain in force, and Health Canada will take steps to implement the amendments affecting the cosmetic notification form, such as adding narrower concentration ranges, providing a way to indicate whether the cosmetic is leave-on or rinse-off, removing the need to provide the name and address in Canada of the distributor, and adding a functionality that requires ingredients in the product formulation to be identified by their INCI names.

The proposed changes to the cosmetic notification will not apply retroactively to notifications received prior to the first coming-into-force date. Following this date, regulated parties will have to comply with the new requirements on the cosmetic notification form when submitting a new cosmetic notification or an amendment to an existing notification.

As described above, the amendments to the Regulations to require the disclosure of certain fragrance allergens on cosmetic labels will come into force two years following registration. With the incorporation of the EU transition period, all new products will have to comply with the requirement to disclose the expanded list of fragrance allergens on cosmetic labels as of August 1, 2026. Requirements for existing products (products on the market before August 1, 2026) will be introduced in two stages over approximately four years: 1) cosmetic labels will be required to disclose the presence of any of the 24 fragrance allergens from the EC two years following the date of registration of the amended Regulations; 2) disclosure of the presence of any of the fragrance allergens from the EC expanded list on cosmetic labels will be required as of August 1, 2028. Health Canada intends to engage in proactive outreach to industry to promote compliance with the new requirements. In addition, the Department will develop guidance and educational materials for consumers regarding fragrance allergen disclosure to help them better understand the new information on cosmetic labels.

Compliance and enforcement

Compliance and enforcement of the amended Regulations will be in accordance with a risk-based approach, aligned with departmental policies. Compliance and enforcement activities will follow established Health Canada approaches and procedures, including the sampling and testing of products, inspections at business locations, and follow-up on incidents reported by the Canadian public and public health organizations. Non-compliant products will be subject to the enforcement actions available to Health Canada inspectors under the Food and Drugs Act, which could include voluntary commitments to product correction by industry, negotiation with industry for the voluntary removal of non-compliant products from the market, seizure or prosecution.

Contact

Magdalena Jurkiewicz
Consumer and Hazardous Products Safety Directorate
Healthy Environments and Consumer Safety Branch
Health Canada
269 Laurier Avenue West
Ottawa, Ontario
K1A 0K9
Address locator: 4908A
Email: cosmetics@hc-sc.gc.ca