Part 2: Legal Challenge



The Federal Government does not have specific jurisdiction over health issues.  The provinces have jurisdiction over most health matters.  That is why the provinces licence health practitioners such as doctors and nurses.  It is why the provinces run hospitals.

For regulations passed under the Food and Drugs Act to be valid, they must be within the Federal Government’s jurisdiction.  Traditionally the Act has been considered to be the exercise of Parliament’s “criminal law” power.  However, in a constitutional challenge to the Natural Health Products Regulations (the “NHP Regulations”) we can anticipate the Federal Government would try to justify the Regulations under three separate areas of federal jurisdiction:

  1. criminal law;
  2. trade and commerce, and
  3. peace order and good government.

These powers are found in s. 91 of the British North America Act, 1867 (the “BNA ACT”).

1. Criminal Law.

It is generally accepted that the criminal law power includes preventing fraud and adulteration.  So for example, sections 4 and 8 (preventing adulteration) and sections 5 and 9 (preventing fraud or misleading claims) of the Food and Drugs Act are valid under the criminal law power.

The NHP Regulations touch on fraud and adulteration.  These issues are not, however, the primary focus.  Nor are the Regulations necessary to deal with the fraud and adulteration issues which remain covered under the Act.

The criminal law power also covers things which carry enough of a risk to be considered “criminal”.  Put another way, protecting health can fall within Parliament’s criminal law power providing the risk to be protected against is significant enough to be considered “criminal”.  For example, following world war two the Federal Government outlawed margarine.  The preamble to the law explained that the Act was meant to protect against the harm of margarine.  In determining that this was not a valid exercise of the criminal law power, the Supreme Court of Canada found that the risk of margarine was not severe enough to engage the criminal law power.  Indeed, if the risk of margarine was to be considered criminal, then there was really no area of provincial jurisdiction that Parliament could not encroach upon with its “criminal law” power.

It is not clear where the risk threshold is for the valid exercise of the criminal law power.  For example, could Parliament outlaw peanuts?  Peanuts cause a number of deaths each year.  However the number of deaths is small enough that Canadians do not view peanuts as a criminal substance that warrants the use of the criminal power.  For Parliament to regulate a substance to protect health, there needs to be a risk significant enough to be considered “criminal”.

The risk of natural health products as a group has never been litigated.  That said, we expect risk analyses experts to continue to find the entire NHP industry to be safer than common foods such as peanuts or shellfish.  If the entire NHP industry is safer than common foods such as peanuts, it is unlikely that NHPs justify criminal regulation.  Otherwise there is really no area of provincial jurisdiction Parliament could not step into with its criminal law power.

It is germane to note that under the NHP Regulations to be “legal” a NHP has to be safe enough for over-the-counter use.  This means it has to be so safe that any person, regardless of education or intelligence, can purchase it without advice, without any restriction, and without supervision.  In short, NHPs must be as safe as margarine, another over-the-counter product.

As currently drafted, every time Health Canada issues a NHP license, it may be declaring that it does not have jurisdiction over that product.
Health Canada has never done a risk analysis to assess the risk posed by the removal of NHPs from the market because of the current Regulations.  If risk analysis evidence shows that this is dangerous, it would be difficult of Health Canada to argue the Regulations are protecting health.

2. Trade and Commerce.

There are two broad branches to the Trade and Commerce Power:  (1) interprovincial or international trade and commerce, and (2) general trade and commerce.

The NHP Regulations do not appear to be an attempt to regulate interprovincial or international trade.  They apply to trade and commerce that occur entirely within a single province.  Indeed, they have a disproportionate effect on parties that only conduct business within a single province.  It is the small herbalist that only sells locally that will be put out of business by the onerous conditions of the Regulations.  Small local producers do not have the economies of scale to survive the cost of the Regulations.

As drafted the NHP Regulations do not appear to be an attempt to regulate interprovincial or international trade and commerce.  For example, there is no attempt to impose national standards or conditions applicable to interprovincial or international trade.

Courts have permitted some allowance for the Federal Government to regulate “general” trade.  It has been difficult for Parliament to succeed under the “general” trade branch, especially if the law is directed at a single industry.  The NHP Regulations are directed at a single industry.

3. Peace Order and Good Government.

The Peace Order and Good Government power (referred to as “POGG”) is a residual power in the Constitution.  If a power is not specifically given to the provinces in s. 92 of the BNA Act, it goes to the Federal Government under the POGG power.  An example that is often cited is aviation.

The POGG power is difficult to describe with any certainty.  In part this is because of competing Court decisions on the topic.  For example, for a period of time Privy Council decisions limited its application to emergencies.  However, later Privy Council and Supreme Court of Canada decisions have not required emergencies.  Matters of national concern could also qualify as the legitimate exercise of the POGG power.  It is likely that there are two POGG powers.  First, where the subject matter does not fall within the jurisdiction of the Provinces and is of national concern.  Second, where there is an emergency to justify the “temporary” exercise of the POGG power despite provincial jurisdiction.

The recent regulation of natural health products would not qualify as an emergency.  It is also unlikely that the recent regulation of natural health products is a subject matter that does not fall within the jurisdiction of the Provinces and is of national concern.

Freedom of Expression.

Another avenue for challenging the NHP Regulations is on the basis of freedom of expression.  The Charter of Rights and Freedoms guarantees our right to freedom of expression.  The Regulations ban all expression about natural health products except those approved of by Health Canada.  There is no question that this violates our right to freedom of expression.  The question is whether a Court would allow this violation under s. 1 of the Charter.

Section 1 allows the government to violate Charter rights if the government can show such violation is demonstrably justified.

The problem with the current regulations is that they prohibit truthful claims which would be beneficial to the consumer.  In effect, they prevent the consumer of natural health products from accessing truthful information about products.  It is unlikely that such censorship can be demonstrably justified.

Expect an Aggressive Defence.

Past experience with challenges to Federal Legislation has demonstrated that the Federal Government aggressively defends challenges to Federal Legislation.  It must be anticipated that this challenge would be met with a well organized and well funded defence involving a team of Department of Justice lawyers.  It must also be anticipated that there would be a large number of procedural motions which will challenge resources.  It must be anticipated that all possible ways of justifying the Regulations will be sought (criminal law, trade and commerce and peace order and good government).

It must also be anticipated that the Court action will continue through one or two appeals, possibly ending in the Supreme Court of Canada.

In the past companies that have stood alone in Court challenges have found the process challenging and expensive.

A Court challenge can only proceed with substantial backing by the NHP community.

Process in Legal Action.

The first step in the proceedings will be to conduct extensive legal research into the three areas we anticipate facing in the constitutional challenge (the criminal law power, the trade and commerce power and the peace order and good government power).

The second step will be to determine issues such as:

  1. which court to commence proceedings in (the Federal Court or a Provincial superior court);
  2. who will be parties.  Companies and persons directly affected by the Regulations will need to be identified who are willing to act as parties;
  3. what evidence will be necessary.  For example, when dealing with whether the Regulations are a valid exercise of the criminal law power, expert evidence on the issues of risk and harm will be relevant.  If an injunction is sought for the parties, evidence of economic harm to the parties will be necessary.  Before commencing proceedings the evidence necessary for a successful challenge will need to be identified;
  4. what expert witnesses should be retained;
  5. what procedural motions should be anticipated, and
  6. what budget is necessary to proceed with an action to completion.

The third step will be to start the action by filing pleadings in Court.

The fourth step will be to proceed though pre-trial processes such as discovery of documents and cross-examinations.

The fifth step will be to run the trial.

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