If a company is looking to start selling food products in Canada, are there strict requirements for labelling foods?
At a very high level, there are significant and detailed regulatory requirements on what must, may and cannot be placed on a food label.
Is there a particular Canadian law that governs food labelling requirements?
There are actually quite a few laws that set out the requirements for food labelling. The Food and Drugs Act (FDA) is the primary legislation that applies to food sold in Canada:
- The FDA has a general prohibition on misleading labelling. In particular, it prohibits the labelling, selling or advertising of any food in a manner that is false, misleading or deceptive to consumers or is likely to create an erroneous message regarding the character, value, quantity, composition, merit or safety of the product.
- The regulations under the FDA also have very detailed labelling requirements that prescribe, among other things, requirements for ingredients themselves, ingredient lists, nutrition labelling, expiry dates, nutrient content claims and health claims. They also set out bilingual labelling requirements. Food that is not labelled as required by the regulations is deemed to be misleading.
- The Canadian Food Inspection Agency (CFIA), the primary regulator, has also provided significant additional guidance on the interpretation of the FDA .
- In June 2015, the federal government announced a proposal to change some of the specific labelling requirements (e.g., how to display ingredient lists and nutrition facts, how to declare sugar ingredients), which may be implemented in the next few years.
What happens if you don't comply with the labelling requirements?
The FDA sets out criminal penalties for non-compliance (fines of up to C$250,000 and imprisonment for three years), although the reality is that the CFIA will generally work with companies to fix issues of non-compliance, and it is relatively rare to see charges being laid. The regulator can also order recalls and has a number of other powers. Of course, beyond the regulator's powers, there can be other consequences for non-compliance, including public relations issues, the risk of litigation and particularly class actions.
What other laws govern food labelling?
In addition to the FDA, there are a number of other pieces of federal legislation that govern the labelling of specific types of food:
- The Canada Agricultural Products Act (CAPA) and its regulations regulate a variety of commodities, including dairy products, eggs, organic products, processed fruit and vegetable products. There are some specific labelling requirements set out in these regulations that are in addition to the labelling requirements in the FDA .
- There is also the Fish Inspection Act (FIA) and the Meat Inspection Act (MIA) that provide additional labelling requirements.
- It's worth noting that there is new legislation known as the Safe Food for Canadians Act that has passed but is not yet in force. This legislation will consolidate the CAPA, FIA and MIA. The law also includes tougher penalties for activities that put health and safety at risk as well as new licensing requirements for imports and other activities, and institutes a more consistent inspection regime across all food commodities. It is not expected to affect labelling but is a trend towards additional regulation of the food industry more generally.
There are also a number of more general non-food specific federal statutes that provide additional regulation of labelling, including the Trade-marks Act and the Consumer Packaging and Labelling Act, which applies to all prepackaged consumer products imported or sold in Canada, including prepackaged food products. It sets out a broad prohibition on labels containing false and misleading representations.
Another applicable general federal statute is the Competition Act, which prohibits making a representation to the public that is false or misleading in a material respect among other relevant requirements. The prohibition applies to food labelling:
- The Competition Act explicitly requires that the general impression conveyed by a representation, as well as its literal meaning, be taken into account when determining whether or not the representation is false or misleading in a material respect.
- In terms of penalties, there is both a criminal and civil track with very significant penalties under both.
Is there any provincial regulation of food labelling that companies should know about?
There is definitely some relevant legislation at the provincial level.
Most provinces have consumer protection legislation that may be relevant and generally prohibits misleading, deceptive or unfair business practices, which is broad enough to apply to statements on packages and labels. However, depending on the province, the legislation does not always apply to companies that do not contract directly with consumers.
The potential for food labelling litigation, particularly class actions, under provincial consumer protection legislation is a large topic for a separate discussion. But it is worth noting that the potential for such food labelling litigation differs significantly from province to province, with British Columbia and Quebec generally considered to have the most broad and generous schemes favouring consumers. However, recent court decisions may dampen the enthusiasm of Canadian plaintiffs' lawyers for these kinds of class actions.
A number of provinces also have additional food-specific labelling requirements and it is important to check what might be relevant for each specific type of food product. As an example, Ontario has additional regulations regarding labelling of maple and honey products, various provinces regulate meat and dairy products, and British Columbia, Quebec and Manitoba regulate organic labelling (which is in addition to the federal legislation on organic labelling).
For anyone familiar with the generally regulatory environment in Canada, you will likely not be surprised that Quebec has more food-specific regulations than other provinces. For example, Quebec has detailed regulations regarding bottled water products that are quite unique in Canada.
In addition, Quebec has strict French language labelling requirements. However, even if you choose not to sell your product in Quebec (which is a large market in Canada), the bilingual labelling requirements under federal law are still substantial. Subject to very limited exceptions, you will still need to have a significant amount of French on your food label, including bilingual nutrition information and ingredient lists.
If you comply with U.S. labelling requirements, will your label be compliant in Canada?
The very quick answer is no.
As already mentioned, there are significant bilingual requirements for food labelling in Canada both inside and outside of Quebec.
The nutrition facts table, which is required on almost all food labels in Canada and the U.S., is not identical in Canada versus the U.S. There are formatting differences, but there are also differences in terms of the nutrients that are required to be displayed as well as the calculation of the nutrition information. There is a movement to try to standardize and harmonize nutritional information between the two countries, but it is very unlikely that the nutrition facts required on U.S. and Canadian labels will be the same in the near future.
Canada and the U.S. have different laws on which product and health claims are acceptable:
- As an example, nutrient content claims (e.g., "low in fat"; "good source of potassium") are strictly regulated in both the U.S. and Canada. However, the disclosure statements that must accompany these claims and requirements for these types of claims are different under U.S. and Canadian legislation.
- "Natural" claims (e.g., "all natural granola bars") are the source of a lot of controversy and litigation in the U.S. While there is no legal definition in either country, the CFIA has published detailed guidance on the term that has resulted in many companies being more cautious about making "natural" claims in Canada.
Even allowable ingredients may be different in the U.S. compared to Canada. A food additive that is allowed in the U.S. may not be allowed in Canada. As a result, it is necessary to do a complete review of any food product that you wish to sell in the Canadian market to ensure Canadian compliance.
What are some tips regarding best regulatory compliance practices?
Ensure compliance with Canadian regulatory requirements as U.S. compliance is not sufficient:
- It's not enough to just translate the label and add a Canadian NFT. In fact, you cannot have a foreign NFT on a Canadian label.
- Don't make Canadianization of labels a last-minute project. Instead, put in place a compliance program to ensure a process for considering labels fairly early on.
Ensure labelling isn't generally misleading:
- After considering the specifics, take a broader look at your labels and the impression they might convey.
Note that claims on labels can be higher risk than other forms of advertising:
- Labelling claims are harder to remove from circulation (requires product recall).
- Labelling claims are closer to consumers' purchasing decisions, which may increase the litigation risk.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.