Agricultural administrative monetary penalties
On May 1, final regulations amending the Agriculture and Agri-Food Administrative Monetary Penalties Regulations (AAAMPR), were published in Canada Gazette II. AAAMPR has been around since the mid-1990s, but the application of administrative monetary penalties (AMP), to food labelling is new. May 1 has also seen amendments to the Food and Drug Regulations (FDR), modernizing the standard for beer. The new beer rules see the consolidation of beer, ale, stout, porter and malt liquor standards. The standard now recognizes flavoured beers that are citrus flavoured, which in turn would extend the exemption from including a list of ingredients on its label, something beer currently enjoys, but not unstandardized alcoholic beverages. The trade-off, however, is that beer is no longer exempt from allergen, gluten and sulphite labelling. Labels will need to be brought up to speed by December 14, 2022. That date is not a coincidence, as that is the end of the transition period proposed for front-of-packaging nutrition symbols, the new ingredient and new nutrition labelling rules under the FDR. It looks like CFIA and Health Canada are aligning their regulatory modernization ducks on this date.
AMPs are administrative fines for not complying with the rules within the AAAMPR. The rules in this case would be those under the Safe Food for Canadians Regulations (SFCR), which came into effect earlier this year. Typically, monetary penalties (fines), such as those under the Food and Drugs Act (FDA), are applied by the courts after a person is convicted of an offence. For example, under the FDA a person who contravenes the FDA’s or the FDR’s food laws on a summary conviction could be liable to a fine not exceeding $50,000, and on an indictment to a fine not exceeding $250,000. In the case of an AMP, the CFIA would apply that administratively. This would more than likely result after CFIA first investigates a matter and issues and inspection report. A review at CFIA headquarters might then result in the AMP notice of violation being issued. The factors that influence the issuance of an AMP most likely will involve the past compliance history of the person, as well as the severity of the violation. As a recourse, a person may request a review of the violation notice by the Minister of Agriculture and Agri-Food or the Canada Agricultural Review Tribunal (CART). A decision by the minister can be requested to be reviewed by the CART, whose decisions are also subject to judicial review by the Federal Court of Appeal. AMPs will not replace the possibility of prosecution under the FDA or Safe Food for Canadians Act. AMPs are simply just more efficient and effective for CFIA under the right circumstance.
AMPs can be issued as a warning or with a monetary penalty. Those penalties can range from $500 to $10,000 depending on the seriousness of the violation. In the case of fines of at least $2,000, the CFIA may enter into a compliance agreement with a person where all or part of the fine might be reduced if that amount is used in support of future compliance. The intent is for the money to be used for financial gain for CFIA, but for companies to invest in their own compliance so that the CFIA does not have to chase the problem repetitively.
The new AMPs applying to the SFCR include many types of violations such as importing a food that fails to meet a prescribed standard or that might be mistaken for such a food; failing to provide proper import documents; and failing to store food in a prescribed manner. Foods that are labelled in a manner that is false, misleading or deceptive or likely to create an erroneous impression, is considered “very serious.” This could include a claim that a food is made without preservatives, when in fact it does contain preservatives. It may also involve creating a false uniqueness even where statements may be factual. For example, a claim that a poultry product is raised without hormones without stating that all similar products are the same. A label that does not bear the required information in the prescribed manner is considered “minor.” An interesting scenario involves Section 218(1)(c) of the SFCR. That sections speaks to the labelling of foods that must also be labelled with information prescribed by the FDR. The AAAMPR includes Section 218(1)(c) of the SFCR in its schedule of violations as “very serious.” What makes this fascinating is that AMPs cannot be applied to offences under the FDA and FDR. The latter is subject to the Criminal Code of Canada. However, AMPs can be applied to the SFCR. So, if the SFCR requires labels to include information prescribed by the FDR, that in theory could be subject to AMPs. What does the FDR require? Well that list is long and includes nutrition labelling, ingredient labelling, etc.
CFIA has many compliance tools in its belt, including seizure and detention, suspension and/or cancellation of a licence, a recall order, written warnings, stop orders for activities and a corrective action request. The new AMP is locked and loaded, ready for action.