Regulations Amending and Repealing Certain Regulations Made Under the Financial Administration Act: SOR/2019-134

Canada Gazette, Part II, Volume 153, Number 11

Registration

SOR/2019-134 May 10, 2019

FINANCIAL ADMINISTRATION ACT

P.C. 2019-483 May 9, 2019

Her Excellency the Governor General in Council, on the recommendation of the Treasury Board and the Minister of Health, pursuant to subsection 19(1) footnote a and section 19.1footnote a of the Financial Administration Act footnote b, and, considering that it is no longer in the public interest to remit certain debts but that it is otherwise in the public interest to remit other debts, subsection 23(2.1) footnote c of that Act, makes the annexed Regulations Amending and Repealing Certain Regulations Made Under the Financial Administration Act.

Regulations Amending and Repealing Certain Regulations Made Under the Financial Administration Act

Fees in Respect of Drugs and Medical Devices Regulations

1 The title of the Fees in Respect of Drugs and Medical Devices Regulations footnote 1 is replaced by the following:

Fees in Respect of Dealer’s Licences Regulations

2 Section 1 of the Regulations and the headings before it are repealed.

3 The heading before section 2 of the Regulations is repealed.

4 Subsection 2(1) of the Regulations is replaced by the following:

Purpose — fees

2 (1) The purpose of these Regulations is to prescribe the fees for the examination of an application for, or the renewal of, a dealer’s licence under Part G of the Food and Drug Regulations or under the Narcotic Control Regulations.

5 Section 3 of the Regulations and the heading before it are repealed.

6 The heading before section 4 of the Regulations is repealed.

7 The headings before section 5 and sections 5 to 28 of the Regulations are repealed.

8 The headings before section 29 of the Regulations are repealed.

9 (1) The portion of subsection 29(1) of the Regulations before the first definition is replaced by the following:

Definitions

29 (1) The following definitions apply in sections 30, 31 and 33.

(2) Subsection 29(2) of the Regulations is replaced by the following:

Words and expressions

(2) Unless the context otherwise requires, all other words and expressions used in sections 30, 31 and 33 have the meaning assigned to them by the Controlled Drugs and Substances Act, Part G of the Food and Drug Regulations or the Narcotic Control Regulations.

10 The heading before section 30 of the Regulations is repealed.

11 (1) The portion of section 30 of the Regulations before paragraph (a) is replaced by the following:

Non-application — applicants

30 (1) These Regulations do not apply to

(2) Section 30 of the Regulations is amended by adding the following after subsection (1):

Non-application — drug for veterinary use only

(2) These Regulations do not apply to a drug that is for veterinary use only.

12 The heading before section 31 of the Regulations is repealed.

13 Subsection 31(2) of the Regulations is replaced by the following:

Remission

(2) Subject to subsection 33(2), if the fee is greater than an amount equal to 1% of the applicant’s actual gross revenue from activities conducted under a dealer’s licence during the previous calendar year, remission is granted of the difference between those amounts if the applicant provides with their application a statement signed by the individual responsible for the applicant’s financial affairs that sets out the actual gross revenue.

14 Section 32 of the Regulations is repealed.

15 The headings before section 34 and sections 34 to 53 of the Regulations are repealed.

16 Schedules 1 to 7 to the Regulations are repealed.

Repeals

17 The following Regulations are repealed:

Transitional Provisions

18 The Veterinary Drug Evaluation Fees Regulations, as they read immediately before the day on which the Regulations Amending and Repealing Certain Regulations Made Under the Financial Administration Act come into force, continue to apply in respect of an application submitted under subsection 16(2) of the Veterinary Drug Evaluation Fees Regulations before that day.

19 The Establishment Licensing Fees (Veterinary Drugs) Regulations, as they read immediately before the day on which the Regulations Amending and Repealing Certain Regulations Made Under the Financial Administration Act come into force, continue to apply in respect of

20 The Fees in Respect of Drugs and Medical Devices Regulations, as they read immediately before the day on which the Regulations Amending and Repealing Certain Regulations Made Under the Financial Administration Act come into force, continue to apply in respect of

Coming into Force

21 These Regulations come into force on April 1, 2020, but if they are registered after that day, they come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Recent amendments to the Food and Drugs Act (FDA) were made through the Budget Implementation Act, 2017, No. 1 (BIA), and gave the Minister of Health (the Minister) the authority to fix, by ministerial order, fees for activities and products that are regulated under the FDA (e.g. human and veterinary drugs as well as medical devices). These amendments allow Health Canada (the Department) to modernize its current fee regime for recovering costs for regulatory activities related to these products. Currently, these fees are set out in four sets of regulations that have been made under the Financial Administration Act (FAA):

In order to implement this new fee regime, the Fees in Respect of Drugs and Medical Devices Regulations must be repealed in part and amended. The following regulations must be repealed in their entirety: the Authority to Sell Veterinary Drugs Fees Regulations, the Veterinary Drug Evaluation Fees Regulations and the Establishment Licensing Fees (Veterinary Drugs) Regulations.

The new fee regime will apply as of April 1, 2020. However, transitional provisions are needed to allow for the continuation of existing fee deferrals and remissions past the repeal of the deferrals and the coming into force of the ministerial order.

Background

Health Canada regulates the safety, efficacy and quality of health products. Since 1995, the Department has been charging fees in accordance with the above-mentioned FAA regulations for certain services and activities related to the regulation of health products (including pharmaceutical and biologic drugs, medical devices and veterinary drugs) under the FDA. These fees apply to such activities as pre-market regulatory reviews, the ongoing surveillance of products once they are on the market, the examination of drug establishment licence applications and the inspection of drug establishments conducting regulated activities.

Health Canada last updated its fees relating to human drugs and medical devices in 2011, based on 2007 costs. Fees for veterinary drugs were implemented in stages between 1995 and 1998, and have not been updated since that time. Prior to 2017, fees relating to therapeutic products could only be changed through a regulation made by the Governor in Council that met requirements found under the former User Fees Act. This process took several years. As a result, Health Canada’s fees for activities/services related to drugs (human/veterinary) and medical devices were not able to keep up to date with the evolving costs associated with these activities/services. As a consequence, Health Canada’s fees for drugs and medical devices no longer reflect current costs to the Department, nor are they well aligned with fees charged by regulatory partners. This means that the portion of the costs covered by fee payers has decreased over time, with the remaining costs being paid by Canadian taxpayers.

In 2017, amendments made to the FDA through the BIA provided the Minister with the authority to fix fees through a ministerial order. These amendments require the Minister to consult stakeholders prior to fixing fees, they prohibit fees from exceeding the cost of providing a service, and they exempt these fees from the requirements of the Service Fees Act (formerly the User Fees Act).

By being able to set fees through a ministerial order under the FDA, the Minister now has the flexibility to set and adjust fees in a timely way so that they better reflect actual costs and allow Health Canada to more effectively deliver its regulatory programs.

While the Department can set fees under the FDA in a timely manner, all fee updates and revisions will continue to respect transparency and accountability principles, including provisions for financial consequences for not meeting performance standards and annual reporting.

Objectives

Amendments to the Fees in Respect of Drugs and Medical Devices Regulations and the repeal of the Authority to Sell Veterinary Drugs Fees Regulations, the Veterinary Drug Evaluation Fees Regulations and the Establishment Licensing Fees (Veterinary Drugs) Regulations, all of which fall under the FAA, will provide clarity to stakeholders on which set of fees are in force and prevent duplicative fees. Establishing transitional provisions will also allow for the continuation of existing fee deferrals and remissions past the implementation of the ministerial order. Ultimately, stakeholders will be subject to the fees fixed by a new ministerial order under the FDA.

Description

The Fees in Respect of Drugs and Medical Devices Regulations will be repealed in part and amended. The provisions that remain will be those that relate to the fees for dealer’s licences that are issued under the Narcotic Control Regulations and Part G of the Food and Drug Regulations, both of which fall under the purview of the Controlled Drugs and Substances Act (CDSA). As these FAA fees relate to activities governed under the CDSA, they cannot be prescribed through ministerial orders under the FDA. Also, the name of the Fees in Respect of Drugs and Medical Devices Regulations will be changed to “Fees in Respect of Dealer’s Licences Regulations,” which more accurately reflects the fact that the remaining provisions under the FAA only cover fees with regard to dealer’s licences governed under the CDSA.

The Authority to Sell Veterinary Drugs Fees Regulations, the Veterinary Drug Evaluation Fees Regulations and the Establishment Licensing Fees (Veterinary Drugs) Regulations will be repealed in their entirety.

Through the establishment of transitional provisions, the application of regulations that deal with fee deferrals and remissions will continue. As an example, if a company qualifies for a fee deferral in February 2020, the deferral will continue to apply past the repeal of the deferral and the coming into force of the ministerial order. These transitional provisions will allow for the deferral and any requirements associated with it to continue to apply once the ministerial order comes into force.

The partial repeal and amendments to the Fees in Respect of Drugs and Medical Devices Regulations, the repeal of the Authority to Sell Veterinary Drugs Fees Regulations, the Veterinary Drug Evaluation Fees Regulations, and the Establishment Licensing Fees (Veterinary Drugs) Regulations, and the respective transitional provisions will come into force on April 1, 2020, the same day that the ministerial order comes into force.

“One-for-One” Rule

The “One-for-One” Rule applies since three regulations are repealed; as a result, three titles are counted “out” under the Rule.

Small business lens

The small business lens does not apply, as these regulatory amendments do not impose any costs on businesses.

Consultation

Between October 2017 and June 2018, the Department conducted extensive consultations with affected stakeholders on the new cost recovery proposal to be set by ministerial order. It proposed changes to the fees for human/veterinary drugs and medical devices, fee mitigation strategies, financial consequences provisions for when performance does not meet set performance standards, and annual fee adjustments tied to the consumer price index. Consultations ranged from WebEx presentations, sector-specific face-to-face sessions, and teleconferences. In October 2017, the Department published an initial consultation document to seek stakeholder feedback. In May 2018, a revised proposal responding to reactions from stakeholders was published to seek additional feedback. All stakeholder comments resulting from these extensive consultations have been considered. The Regulatory Impact Analysis Statement accompanying the ministerial order replacing the repealed regulations explains this further.

Rationale

The Fees in Respect of Drugs and Medical Devices Regulations must be repealed in part and amended and the Authority to Sell Veterinary Drugs Fees Regulations, the Veterinary Drug Evaluation Fees Regulations, and the Establishment Licensing Fees (Veterinary Drugs) Regulations must be repealed in order to avoid the duplication of fees, and to provide clarity to stakeholders on which set of fees are in force, once the Department’s new fees under the ministerial order are made. Transitional provisions are also necessary to allow for the continuation of existing fee deferrals and remissions at or after the time of the repeal.

Contact

Bruno Rodrigue
Policy, Planning and International Affairs Directorate
Health Products and Food Branch
Health Canada
Holland Cross, Tower A, Suite 14, Ground Floor
11 Holland Avenue
Ottawa, Ontario
K1A 0K9
Address locator: 3000A
Email: hc.lrm.consultations-mlr.sc@canada.ca