Beauty Start-ups: Canadian Federal Regulations & the Need for Reform

 In Intro

Cosmetics and beauty products have become a staple discussion topic in various creative industries including the fashion industry.  These products have the ability to enhance any look or provide a means to achieve beauty ideals.  With the constant promotion of beauty and cosmetics including their ever-growing presence in various social media mediums such as YouTube tutorials and Instagram sponsored posts, it is no wonder that their increased presence has sparked so much discussion.  One topic of discussion relates to the capability of beauty companies and start-up beauty lines to develop, product and sell their products in Canada.  Beyond their promise to enhance your looks, it is how the product is manufactured, its ingredients and its labelling that may create an obstacle for start up beauty lines to commence activity in Canada.  It is essential for “beauty entrepreneurs” to be familiar with Canada’s Federal regulations that are applicable to the beauty and cosmetic industry.

 

Canadian Federal Regulations

 

One of the first Acts to know when looking in to beginning or getting involved with a cosmetic or beauty line is the Food and Drugs Act.  This Act, although it does not have cosmetic in its title, is one of the fundamental acts to be familiar with regarding sales of cosmetics.  Cosmetics falls under section 16 of the Canadian Food & Drugs Act which states that no person is to sell any cosmetic that: (a) has in it any substance that may cause injury while used, (b) consists of a decomposed substance or any foreign matter, or (c) was manufactured, prepared, preserved, packages or stored under unsanitary conditions. Section 17 further states that “where a standard has been prescribed for a cosmetic, no person shall label, package, sell or advertise any article in such a manner that it is likely to be mistaken for that cosmetic, unless the article complies with the prescribed standard”[1] and section 18 states that no person can manufacture, prepare, preserve, package or store for sales any cosmetic under unsanitary conditions.

 

The second act to bear in mind is Canada’s Consumer Product Safety Act.  The purpose of this Act is to protect the public by addressing and preventing dangers to human health posed by Canadian consumer goods. Similar to the Food and Drugs Act, section 7 states that no manufacturer or importer shall manufacture, import, advertise or sell a consumer product that is a danger to human health or someone’s safety.[2]

 

Packaging of a cosmetic is an extremely crucial component, which is why the Consumer Packaging and Labelling Act prohibits false and misleading representations relating to pre-packaged products. For cosmetic and beauty start-ups, the most prevalent way in which this section can be violated is in regards to the product composition representation. As per subsection 1.2, any representation (regarding included or excluded substances), which deceives a consumer with respect to the composition of a product, may be a violation of this section.[3]  Therefore the biggest take away is always to be transparent with the customer regarding the contents of the beauty product and what it can do for you.

 

These Acts clearly state the standards that are to be met as per the standard in Canada. With the amount of cosmetic products sold in stores, consumers expect all beauty companies to abide by such regulations.  Even though there are Federal regulations in place, these regulations may not be as stringent and authoritative as consumers would hope them to be. As a start-up beauty line it would be wise to fully abide by such regulations and engaged your consumers in the process by being authentic, ethical and transparent about your ability to abide by the laws set out. Not only is it one way to outshine your competition, but also promotes positive reform in the area and may lead to an increase in consumer loyalty and retention.

The Need for Reform

 

The Canadian Environmental Protection Act provides Health Canada and Environment Canada with additional authority on top of the above mentioned Food and Drugs Act. Specifically, it regulates what exactly is the legal definition of “toxic” within the Act. Companies are required to notify the Minister of Health of any ingredients and concentrations in all the cosmetics they sell.  This report, however is not required to be filed until 10 days after the product becomes available on the market. Further, many chemical ingredients have never actually been tested on their effects on human health, which makes reporting to the Minister of Health somewhat useless and inefficient.[4]

 

To make matters even worse, although Health Canada has a list – the “Hotlist” – which prohibits and restricts the ingredients that are included, the list itself has no legal authority. Further, it only restricts direct use of a “toxic” ingredient, but these ingredients may still be present as by-products.[5]

 

When speaking to the “safe doses” accepted of such questionable ingredients, it is difficult for Health Canada to assess the cumulative impact of continued small and “safe” doses on the average Canadian.[6] Holding Health Canada accountable to further understand the harmful effects of such chemicals is a necessary reform essential to the health of all Canadians.  Even though an ingredient maybe on the “hotlist” this list is treated as more of suggestive guide rather than a prohibition on harmful chemicals.  Making this list a legal authority would further protect the health of those purchasing these products.  It seems that in respect to the cosmetic industry, Health Canada still has a way to go in regards to protecting and enforcing regulations that will protect people from harmful substances now and in the future.

Why Does This Matter to Start-up Beauty and Cosmetic Companies?

 

For most companies, having less legally binding regulations in the industry may seem like a benefit. However, starting up a company in an area that is loosely legislated and in the need for serious reform actually serves as a detriment to your success. If you do plan on starting and beauty and cosmetics line, it is essential to not only follow the legislation in place, but also act ethically in a manner than consumers will appreciate. Not only does this increase authenticity and loyalty amongst consumers, but moreover, if legal reform in undergone, it ensures that your company does not need to re-strategize or reformulate products. In cases as such, it is essential to go above and beyond, rather than meeting the minimum requirements..

 

As with all Fashion By Law Posts, this information does not constitute legal advice. For inquiries, please contact info@fashionbylaw.com. 

 

[1] http://laws-lois.justice.gc.ca/eng/acts/f-27/page-2.html#h-7

[2] http://laws-lois.justice.gc.ca/eng/acts/C-1.68/page-1.html#h-5

[3] http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/01248.html#Labelling

[4] http://davidsuzuki.org

[5] Ibid.

[6] http://cela.ca

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