We would like to reiterate our strong opposition to Health Canada’s proposed cost recovery program for natural health products (NHPs). This policy was already putting Canadian businesses at a severe disadvantage compared to U.S. competitors, but with newly proposed tariffs, it has now become an even bigger threat to the industry.
For over five years, we have warned that Canada’s regulatory policies create an unfair playing field, allowing U.S. companies to exploit the 90-day import loophole while Canadian businesses are burdened with extensive compliance requirements. A small to mid-sized Canadian supplement company with 400 products could face annual fees of $500,000 under the new cost recovery program, while foreign businesses operating through the loophole pay nothing. This discrepancy makes it impossible for Canadian companies to compete in their own market.
With new U.S. trade barriers looming, Canadian businesses face mounting pressure. Without urgent action, Canada risks losing control of its own supplement industry, allowing the U.S. to dominate the market. While Canada considers retaliatory measures, escalating tariffs on both sides threaten to drive up costs, fuel inflation, and slow economic growth. Additionally, supply chain disruptions will create further delays and increased operational costs for businesses that rely on cross-border trade.
It is important to acknowledge that this cost recovery program is not about enhancing public health or safety—it is about revenue generation to maintain government staffing levels. The Canadian NHP industry already contributes millions in tax revenue through GST/HST, and if businesses are forced to shut down or relocate, the government risks losing that revenue entirely. Consumers, in turn, will be left with fewer choices and higher risks as they turn to unregulated international sources.
There is a critical opportunity to reconsider this policy before it causes irreversible harm. We strongly urge Health Canada to halt the implementation of cost recovery and work with industry to develop a fair regulatory framework that ensures Canadian businesses can compete while maintaining high standards for consumer health and safety.
We would welcome the opportunity to discuss this further at your earliest convenience.
Sincerely,
Aaron Skelton
President & CEO
Canadian Health Food Association
