Le-Vel Brands, LLC v. Canada (Attorney General)

Le-Vel Brands, LLC v. Canada (Attorney General)
Court (s) Database
Federal Court of Appeal Decisions
Date
2023-08-16
Neutral citation
2023 FCA 177
File numbers
A-92-22
Decision Content
Date: 20230816
Docket: A-92-22
Citation: 2023 FCA 177
CORAM:
DE MONTIGNY J.A.
LASKIN J.A.
MACTAVISH J.A.
BETWEEN:
LE-VEL BRANDS, LLC
Appellant
and
THE ATTORNEY GENERAL OF CANADA
Respondent
Heard at Ottawa, Ontario, on June 1, 2023.
Judgment delivered at Ottawa, Ontario, on August 16, 2023.
REASONS FOR JUDGMENT BY:
DE MONTIGNY J.A.
CONCURRED IN BY:
LASKIN J.A. MACTAVISH J.A.
Date: 20230816
Docket: A-92-22
Citation: 2023 FCA 177
CORAM:
DE MONTIGNY J.A.
LASKIN J.A.
MACTAVISH J.A.
BETWEEN:
LE-VEL BRANDS, LLC
Appellant
and
THE ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT
DE MONTIGNY J.A.
I. Overview [1] Le-Vel Brands, LLC (the appellant) sells and markets in Canada the Thrive Premium Lifestyle Derma Fusion Technology Patch (the Patch), a product that is claimed to improve the appearance of a wearer’s skin. While the Patch was initially sold as a cosmetic, Health Canada advised the appellant shortly after its launch that it took issue with the Patch’s classification as a cosmetic, and that it should instead be classified as a natural health product (NHP). Over the course of more than five years, the appellant and Health Canada exchanged correspondence where the appellant made submissions and provided evidence as to why the Patch should be classified as a cosmetic, and Health Canada responded with various concerns. Health Canada eventually issued a final decision according to which the Patch was classified as an NHP, and issued a compliance letter to the appellant requiring it to cease sales of the product in Canada.
[2] On judicial review, the Federal Court found that the appellant had failed to demonstrate that Health Canada’s decision was unreasonable or that it was denied procedural fairness: see Le-Vel Brands, LLC v. Canada (Attorney General), 2022 FC 459 (Reasons).
[3] The appellant now seeks this Court’s intervention on appeal, claiming that the Application Judge effectively re-drafted Health Canada’s reasons and failed to consider the shortcomings of the initial decision, both in form and in substance. The appellant also raises for the first time a jurisdictional argument, alleging that Health Canada could not rely on the appellant’s U.S. website to come to its determination.
[4] After having carefully reviewed the record and considered the oral and written submissions of the parties, I am of the view that the Federal Court properly determined that Health Canada’s decision to classify the Patch as an NHP, as opposed to a cosmetic, was reasonable. When read in the overall context of the entire correspondence between the parties, the impugned decision is intelligible and coherent, and is well within the applicable legal and factual constraints.
II. Factual background [5] The appellant is a self-described “premium lifestyle” company that sells a number of products in Canada, some of which are registered as NHPs, while others are sold as cosmetics. Although based in the United States, the appellant’s products are sold in Canada by its Canadian subsidiary, Le-Vel Brands Canada Inc.
[6] When the Patch was introduced in Canada in 2015, the appellant notified Health Canada of its sale as a purported “cosmetic”. At the relevant time, the marketing materials for the Patch included a Canadian product brochure and a Canadian website (le-vel.ca), whose representations concerning the product were similar. They both stated that the Patch “replenishes the skin’s moisture barrier” and “helps improve skin elasticity”, and that using the Patch results in “skin appear[ing] firm/toned” and “skin appear[ing] visibly younger”. The Patch’s label included these same four benefits, and also included application instructions at this time.
[7] On August 25, 2015, Health Canada sent the appellant an acknowledgement letter of its cosmetic notification and assigned a cosmetic product number. It nevertheless stated that the assignment of a cosmetic product number was not the result of a product evaluation or of an approval procedure, and did not constitute Health Canada’s agreement that the product was a cosmetic pursuant to the regulatory requirements: Reasons at para. 11. Pursuant to section 2 of the Food and Drugs Act, R.S.C. 1985, c. F-27 (the Act), a cosmetic is defined as including “any substance or mixture of substances manufactured, sold or represented for use in cleansing, improving or altering the complexion, skin, hair or teeth […]”. Unlike NHPs, cosmetics do not require a licence for sale, nor are they subjected to the same manufacturing, labelling, packaging, distribution, or inspection requirements as NHPs.
[8] On the other hand, NHPs are a subset of “drugs” within the meaning of the Act, and were defined at subsection 1(1) of the Natural Health Products Regulations, S.O.R./2003-196 (NHP Regulations) at the time of Health Canada’s decision in the following manner:
natural health product means a substance set out in Schedule 1 or a combination of substances in which all the medicinal ingredients are substances set out in Schedule 1, a homeopathic medicine or a traditional medicine, that is manufactured, sold or represented for use in
produit de santé naturel Substance mentionnée à l’annexe 1, combinaison de substances dont tous les ingrédients médicinaux sont des substances mentionnées à l’annexe 1, remède homéopathique ou remède traditionnel, qui est fabriqué, vendu ou présenté comme pouvant servir :
(a) the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state or its symptoms in humans;
a) au diagnostic, au traitement, à l’atténuation ou à la prévention d’une maladie, d’un désordre, d’un état physique anormal, ou de leurs symptômes chez l’être humain;
(b) restoring or correcting organic functions in humans; or
b) à la restauration ou à la correction des fonctions organiques chez l’être humain;
(c) modifying organic functions in humans, such as modifying those functions in a manner that maintains or promotes health.
c) à la modification des fonctions organiques chez l’être humain telle que la modification de ces fonctions de manière à maintenir ou promouvoir la santé.
However, a natural health product does not include a substance set out in Schedule 2, any combination of substances that includes a substance set out in Schedule 2 or a homeopathic medicine or a traditional medicine that is or includes a substance set out in Schedule 2. (produit de santé naturel)
La présente définition exclut les substances mentionnées à l’annexe 2, toute combinaison de substances qui contient une substance mentionnée à l’annexe 2 et tout remède homéopathique ou remède traditionnel qui est une substance mentionnée à l’annexe 2 ou qui contient l’une de ces substances. (natural health product)
[9] There is no dispute between the parties that the Patch’s medicinal ingredients are identified in Schedule 1 of the NHP Regulations, such that it meets the substance requirement. It is the functional aspect of the definition that is at issue in the present dispute. More particularly, what divides the parties is whether the Patch can be said to be “modifying organic functions in humans, such as modifying those functions in a manner that maintains or promotes health”.
[10] On February 5, 2016, the Consumer Product Safety Directorate (CPSD) of Health Canada informed the appellant that the Patch could not be classified as a cosmetic because the notification form or product label referred to “fat reduction (including control, reduce and prevent cellulite, weight management)”.
[11] The appellant requested clarification and provided a draft product label, which it said demonstrated that the Patch would not be marketed in Canada as a fat-reduction product. The CPSD responded that the draft label did not alter its view, pointing to the appellant’s website, which described the Patch as being part of a “wearable product nutrition line”, and to the draft label, which described the Patch as containing ingredients that increased bioavailability and topical permeation in a manner that the CPSD determined to go beyond the scope of a cosmetic. The appellant replied in February 2016 with further explanations as to why the Patch should be classified as a cosmetic, but nothing further happened until October 2018 regarding the classification of the Patch.
[12] The appellant received a letter from the Regulatory Operations and Enforcement Branch of Health Canada, dated October 15, 2018, stating that Health Canada had been notified that the Patch was being sold as an unlicensed NHP. The letter referred to the sale and advertisement of the Patch on the appellant’s U.S. website, and requested that the appellant stop the sale and advertisement of the Patch since it was not a licensed product. The appellant responded three days later, noting that it has a separate Canadian website where Canadian products, which may have the same names and similar formulas and/or packaging as U.S. products but are not identical, are advertised and sold to Canadian consumers. The appellant reiterated that the Patch is intended to “replenish the skin’s moisture barrier, improve skin elasticity and promote an appearance that is firm/toned/visibly younger”, which are all benefits that do not require licensing as an NHP.
[13] The appellant provided a more detailed response to Health Canada on November 1, 2018. It confirmed that Canadian consumers can buy the U.S. products directly from the U.S. website, but that it does not actively market those products in Canada. Le-Vel Brands Canada Inc. has its own separate website, and employs its independent contractors in Canada to promote and sell its Canadian products. It also enclosed a number of documents and prior correspondence with Health Canada, including correspondence in respect of the Patch’s cosmetic classification, a draft label, and information on the cosmetic nature of the ingredients within the Patch.
[14] Health Canada reviewed the appellant’s response and material, and its view that the Patch was a cosmetic. Then, on April 18, 2019, Health Canada sent an email to the appellant, confirming that the Patch is not a cosmetic but an NHP without providing any explanation for this statement. It concluded that the appellant was in violation of subsection 4(1) of the NHP Regulations for selling an NHP without a product license, and demanded that the appellant immediately stop the sale and advertisement of the Patch.
[15] The appellant responded to Health Canada’s email on April 26, 2019, explaining why the Patch could not reasonably be considered to fall within the scope of the definition of an NHP. The appellant stated that the Patch was not manufactured, sold, or represented for one of the purposes identified in the NHP Regulations, and more particularly, as “modifying organic functions in humans, such as modifying those functions in a manner that maintains or promotes health”. The appellant further submitted that the Patch is specifically sold and represented “to replenish the skin’s moisture barrier, improve skin elasticity and promote an appearance that is firm/toned/visibly younger”, all of which are cosmetic purposes within the meaning of the Act’s definition of a “cosmetic”. The appellant also requested further information as to the basis of Health Canada’s decision, and clarification as to whether that decision was final.
[16] Health Canada replied to the appellant in a letter dated May 21, 2019. In its letter, Health Canada advised that it had determined that the claims described by the appellant suggested that they are achieved by modifying organic function, and thus, the Patch falls within the definition of an NHP. Specifically, the letter referenced statements that the Patch used a “DFT [Derma Fusion Technology] delivery system” designed to “infuse the derma (skin)” and “to provide greater bioavailability and absorption”. Health Canada found these statements on the product label, the Canadian website, and a linked product brochure. The letter also referenced the Health Canada “Guidance Document: Classification of Products at the Cosmetic-Drug Interface” (Guidance Document), which provides in section 3.3 that “[i]n order to be a cosmetic, the product must exhibit a lack of percutaneous absorption and should not have to be absorbed systemically to achieve the effect”. The letter also explained that the product ingredients fall within Schedule 1 of the NHP Regulations. The letter ended with the caveat that it did not constitute a final decision, and that Health Canada would consider further submissions from the appellant.
[17] Following further discussions, Health Canada wrote to the appellant again on July 5, 2019. This letter clarified that the reference in Health Canada’s previous correspondence to the website and brochure statements concerning the DFT delivery system was not meant to imply that the statements were therapeutic claims. Rather, Health Canada was concerned that these statements suggested that the Patch required systemic absorption to achieve its purported benefits, such as “appear firm/toned” and “appear visibly younger”. Thus, the representations of a systemic mechanism of action met the function aspect of the NHP definition.
[18] The letter also noted that a cosmetic should only achieve its desired effect locally. Consequently, Health Canada took issue with the fact that the claims “appear firm/toned” and “appear visibly younger” were not qualified by the term “skin”. It also noted how the photos and a video on the Canadian website showed individuals wearing the Patch on their arm or shoulder; these are unlikely locations for customers seeking younger looking skin or improved elasticity. These representations, together with a lack of clear directions as to where to apply the Patch and absence of any indication to the consumer that the Patch exerts a benefit only where locally applied, suggested therapeutic effects.
[19] The letter ended with a warning that the above-quoted statements (“DFT delivery system was designed to infuse the derma (skin)” and “to provide greater bioavailability and absorption”) would not change the Patch’s NHP classification. Classification is not based on individual claims, but on the “net impression” created by representations as to the product’s use.
[20] The appellant provided further lengthy submissions to Health Canada on July 19, 2019 (Appeal Book (AB), pp. 445-450). It advised that the above-quoted statements were present by error and had been removed. It also noted that Health Canada claimed to consider the totality of information without providing any specific examples of the information relied upon to classify the Patch as an NHP. It made reference to a study (the “Platt Study”), previously submitted to Health Canada, which analyzed the cosmetic aspects of a similar product and supported the cosmetic nature of the Patch. The appellant claimed that the key ingredients in the Patch already exist in Canadian cosmetics (of which it provided examples), and are in Health Canada’s NHP Ingredient Database. It further advised that the website had been amended to implement the changes requested by Health Canada (the addition of the word “skin” to the appearance claims).
[21] The appellant’s letter also made a number of submissions on the proper interpretation of the NHP definition, including the fact that it does not manufacture, sell, or represent the Patch as a product that modifies an organic function. Even if the Patch did modify an organic function, the appellant submitted such effect, in isolation, would not result in classification as an NHP. With respect to the location of the Patch, the appellant submitted that many cosmetics sold in Canada are for use on more difficult areas of the skin, and that neither the definition of a cosmetic nor that of an NHP considers the location of the body where there is a topical skin application. Finally, the appellant disagreed with Health Canada that a cosmetic patch should only achieve the desired effect locally, but in any event, asserted that the intended use of the Patch was local.
[22] More than two years went by before Health Canada responded to the appellant by way of letter dated August 5, 2021, but sent on November 3, 2021. In that letter, Health Canada indicated that it considered the totality of information currently available, including:
a)the Canadian website, which linked to a brochure that described the Patch as being associated with weight management, appetite management, nutritional support, mental acuity, and improved energy and circulation, which are considered therapeutic effects;
b)the Canadian website also linked to a video in which the Patch is described as being part of a “premium naturopathic and synergistic formula” and as delivering “vitamins, minerals, plant extracts, digestive enzymes, probiotics, antioxidants, protein fiber, amino acids” via a multi-layer process that involved systemic absorption;
c)the video also showed the dosage from the Patch spreading throughout the body, apparently being absorbed systemically;
d)a web search in Canada for “Thrive DFT” or “Thrive patch” brought up the appellant’s U.S. website and other affiliated websites that promote therapeutic uses of the Patch, which Health Canada noted could mislead Canadian consumers as to the product’s recommended use, particularly as the U.S. and Canadian labels were almost identical; and
e)the ingredients of the Patch are Schedule 1 substances.
[23] In a follow-up letter dated November 3, 2021, but sent together with the August 5, 2021 letter, Health Canada concluded that the Patch was classified as an NHP product on the basis that it is represented for use in a manner set out in the NHP Regulations, and requested the appellant to stop selling the Patch in Canada.
[24] The appellant provided a detailed response to Health Canada on November 8, 2021. The appellant explained that its Canadian website had inadvertently included links to content beyond the website that was “clearly inconsistent with the intended and longstanding promotion of the [Patch] as a cosmetic”. However, the appellant explained that it had taken corrective action as of November 4, 2021, and that it was committed to implementing further unspecified process controls to reduce the risk of this recurring in the future. The appellant, having taken these corrective actions, submitted that “the only information available to classify the [Patch] is cosmetic in nature”. This was consistent with its reading of the August 5, 2021 letter, which in the appellant’s view, erroneously reclassified the Patch as an NHP on the basis of product representations rather than its actual composition.
[25] On November 26, 2021, Health Canada issued the final decision that became the subject matter of the underlying judicial review (Final Decision). In its opening paragraph, the email stated: “Based on the information available at this time, Health Canada stands firm on the classification of Thrive DFT Patch as a Natural Health Product”. The Final Decision also included a compliance letter which was attached to the email dated the same day. In this letter, Health Canada demanded that the appellant cease all sales of the Patch. In its most salient part, the letter provided the following rationale for the decision:
As indicated in the classification recommendation NNHPD provided previously, NNHPD considers the “THRIVE DFT patch” to be a Natural Health Product (NHP).
The patch includes substances set out in Schedule 1 of the Natural Health Products Regulations (NHPR) and is represented as providing a whole body effect on the skin and not limited to the local application, thereby via systemic absorption and modifying organic function. Therefore, the product meets the definition of an NHP as defined in the NHPR. Furthermore, as per Section 3.3 of the Guidance Document: Classification of Products at the Cosmetic-Drug Interface, in order to be a cosmetic, the product must exhibit a lack of percutaneous absorption and should not have to be absorbed systemically to achieve the effect.
While the ingredients may be found in cosmetics and there may be no explicit therapeutic claims made on the Canadian label or website, the product is represented for therapeutic and systemic use and therefore is considered an NHP.
Given the product “Thrive DFT Patch” is confirmed to be an NHP, effective immediately, you are required to stop sale, importation and cease all licensable activities of the above-mentioned health product as well as any other unauthorized health products and remove any associated advertisement including websites and/or promotional materials.
(Emphasis in the original)
[26] The Final Decision also requested that the appellant provide certain information by December 3, 2021, including confirmation that it had ceased sales of the Patch, and reminded the appellant that failure to comply with any legislation could result in more stringent compliance and enforcement actions.
III. The impugned decision [27] The appellant sought judicial review of the Final Decision to have the Federal Court quash the decision and remit it back to Health Canada for reconsideration. It claimed that the Final Decision was not sufficiently justified and supported, and that the decision was therefore unreasonable because it was impossible to understand how and why the conclusions were reached. It also argued that Health Canada breached its duty of procedural fairness because it relied on the appellant’s representations that were inadvertent and were no longer applicable at the time of the Final Decision, and that Health Canada was trying to “lock in” conclusions reached in its August 5, 2021 letter.
[28] Before dealing with these substantive submissions, the Federal Court (per Justice Aylen) found, as a preliminary matter, that several portions of the appellant’s affidavit evidence were irrelevant, argumentative, or had not been before Health Canada at the time of the decision, and should therefore be afforded no weight. That portion of the decision has not been challenged before us.
[29] On the merits, the Application Judge made the following key findings:
Although the Final Decision is comprised of the email and attached compliance letter dated November 26, 2021, the Final Decision also incorporated by reference reasons provided by Health Canada in earlier correspondence. As such, in determining whether Health Canada’s reasons are justified, intelligible, and transparent, the Application Judge found that she could consider the detailed exchange of the appellant’s earlier submissions and Health Canada’s preliminary determinations (Reasons at paras. 56, 59);
Within these exchanges, Health Canada identified its concerns at various points in time with the representations being made by the appellant. Some of those concerns were addressed and remedied, whereas others were not. For example, the appellant did not fully address Health Canada’s concerns with respect to the fact that Canadian consumers were not insulated from the promotional materials employed in the United States, where the Patch was being represented as being about nutrition (Reasons at paras. 56-57);
Health Canada made it clear that classification decisions are based not only on the submitted product label, but also on how the product and product line are marketed, and the overall representation of the product. Health Canada made it clear that it was not concerned with therapeutic claims, but was of the view that the claimed benefits of the Patch were represented as being achieved through a systemic mechanism of action, by modifying organic action. Such representations included images of the Patch on the model’s arm/shoulder, claims that benefits appeared to be achieved by systemic absorption and were not limited to the application area, and representations on the U.S. website that the Patch was associated with weight management, nutrition, energy, and circulation. Therefore, the Application Judge determined that Health Canada has provided intelligible reasons as to why the Patch was represented as providing a whole body effect, as opposed to a local one (Reasons at paras. 62, 66-70);
Health Canada also reasonably determined that the appellant suggested a systemic therapeutic use for the Patch, based on the lack of clear directions for its area of application, and the absence of any indication that its benefits are limited to the local area of application (Reasons at paras. 71-82);
Health Canada’s determination that the Patch meets the definition of an NHP on the basis that it represented systemic therapeutic use was reasonable. While it may be, as asserted by the appellant, that systemic absorption alone is not sufficient to meet the “modifying organic functions” requirement of the NHP definition, what matters are the representations made. When viewed in their totality, the appellant’s representations suggest more than just local absorption and local effect. Moreover, Health Canada conducted an independent analysis of whether the Patch was an NHP, and did not rely on the Guidance Document entitled “Classification of Products at the Cosmetic-Drug Interface” to render its decision. The issue was not whether the Patch was a cosmetic, but rather, whether the Patch meeting the definition of an NHP was reasonable (Reasons at paras. 83-92);
Health Canada’s request that the appellant stop selling the Patch was not a penalty, but simply a statement of the applicable law (Reasons at paras. 93-97);
The appellant’s assertion that Health Canada had a closed mind and denied it procedural fairness is not borne out by the evidence. On the contrary, the appellant had numerous opportunities to fully respond to the concerns raised by Health Canada. There is no indication that Health Canada’s Final Decision was based on the now-removed product brochure and video link referenced in Health Canada’s August 5, 2021 letter.
IV. Issues [30] The appellant does not challenge the Federal Court’s ruling on the weight to be afforded to the appellant’s affidavit evidence, nor does it pursue its procedural fairness argument. However, the appellant raises for the first time a jurisdictional argument, alleging that Health Canada could not rely on statements made on Le-Vel’s U.S. website to come to its determination.
[31] Since the parties agree that the Application Judge was correct in selecting reasonableness as the standard of review, the questions to be decided on appeal are the following:
Was Health Canada’s decision reasonable, both in its outcome and in the reasoning process leading to that outcome?
Did Health Canada exceed its jurisdiction by considering foreign promotional materials in its Final Decision?
Did Health Canada exceed its jurisdiction by ordering the appellant to cease all sales?
V. Analysis [32] An appeal from the Federal Court on an application for judicial review requires this Court to determine whether the application judge identified the appropriate standard of review for each issue, and whether it was applied correctly: Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, [2013] 2 S.C.R. 559 at paras. 45-46; Northern Regional Health Authority v. Horrocks, 2021 SCC 42 at para. 12 [Horrocks]; Rouleau-Halpin v. Bell Solutions Techniques Inc., 2023 FCA 139 at para. 16. This approach accords no deference to the reviewing judge’s application of the standard of review: Horrocks at para. 10. Instead, this Court effectively “steps into the shoes” of the Court below to focus on the administrator’s decision. That being said, where the Federal Court appears to have given a complete answer to an argument advanced on judicial review, an appellant bears a tactical burden to show a flaw in the Federal Court’s reasoning: Bank of Montreal v. Canada (Attorney General), 2021 FCA 189 at para. 4; Canada RNA Biochemical Inc. v. Canada (Health), 2021 FCA 213 at para. 7.
[33] As previously mentioned, there is no debate between the parties on whether the Federal Court appropriately selected the reasonableness standard for reviewing Health Canada’s decision. The only issue for this Court, therefore, is to determine whether the Federal Court erred in its application of that standard. When performing that function, the role of this Court is not to ask what decision it would have made in place of the administrative decision-maker, or to seek the correct solution to the problem, but rather whether the decision made by the administrative decision-maker was reasonable. In other words, our analysis must focus on the reasons provided by the decision-maker, as opposed to the reasons that the reviewing court could have come up with: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653 at paras. 83-84, 116 [Vavilov].
[34] I pause to stress that the reasons provided by the administrative decision-maker must be examined with “respectful attention”, with a view to understand how the conclusion was arrived at. In so doing, the reviewing court must pay attention to the administrative setting in which the reasons have been given. In particular, judges should pay attention to a decision-maker’s demonstrated expertise. Such expertise, after all, is one of the reasons why a legislature may have decided to delegate decision-making authority to a particular administrative decision-maker, and courts must be sensitive to that choice: Vavilov at paras. 75 and 93.
[35] Reasonableness review is concerned both with the reasoning process and its outcomes. In other words, a reasonable decision must be based on an internally coherent reasoning, and justified in light of the relevant legal and factual constraints: Vavilov at paras. 85 and 99. According to the appellant, the reasons provided by Health Canada fail on both counts.
A. Was Health Canada’s decision reasonable, both in its outcome and in the reasoning process leading to that outcome? [36] The appellant argues that Health Canada failed to identify how it reached its conclusion in its decision. The appellant argues, more specifically, that Health Canada failed to identify which specific representations were relied on to conclude that the Patch claimed to have a systemic effect, and that Health Canada provided no explanation for how the representations at issue meet the legislative NHP definition of “modifying organic functions in humans”.
[37] The appellant further argues that the Application Judge incorrectly relied on the previous correspondence between the appellant and Health Canada to complete the decision itself. While the appellant agrees that administrative decisions may incorporate elements of the administrative history such that they are read in light of their context, the appellant contends that a court cannot supplement the reasons or draw a conclusion from positions that are inconclusive or absent. In other words, a reviewing court cannot draw a line on a page when the dots are not present: Komolafe v. Canada (Citizenship and Immigration), 2013 FC 431 at para. 11 [Komolafe]. According to the appellant, this is precisely what the Application Judge did: she improperly selected discrete items in the record independent of their context or other exchanges.
[38] The appellant highlights that the marketing materials changed over time and claims the Application Judge made a clear error when she referred to the 2019 correspondence because the marketing at the time of the Final Decision was different. The appellant also emphasizes that Health Canada’s affiant testified that the Final Decision letter incorporated only the correspondence sent on November 3, 2021. Finally, the appellant reviewed the administrative history and argued that there was no specific position taken by Health Canada in its previous correspondence and that there was a 2.5-year gap between the appellant’s response to Health Canada’s letter of July 5, 2019, and Health Canada’s response to that letter in 2021 (which, moreover, made no reference to the 2019 exchange of letters between the parties).
[39] In my view, all these arguments were addressed by the Application Judge and were convincingly put to rest. While I agree that the specific reasons provided by Health Canada in its Final Decision for the classification of the Patch as an NHP could have been more detailed, they have to be read in their entire context. As the Supreme Court stated in Vavilov, the history and context of the proceedings may explain an aspect of the decision-maker’s reasoning process that is not readily apparent from the reasons themselves or show that what may appear at first sight to be an omission has in fact been dealt with elsewhere: Vavilov at para. 94. Of course, this is not an invitation for the reviewing court to provide reasons that were absent to bolster the administrative decision, nor is it a license to come up with findings that might have been made or even to speculate as to why or how the decision was arrived at: Vavilov at paras. 95-97; Williams Lake Indian Band v. Canada (Aboriginal Affairs and Northern Development), 2018 SCC 4, [2018] 1 S.C.R. 83 at para. 155; Komolafe at para. 11. The Application Judge was well aware of that tension and did not cross the line; she used the context of the proceeding to flesh out the reasons Health Canada provided in its final letter, but at no point engaged in a redrafting exercise.
[40] It was entirely appropriate, given the wording of the Final Decision, to incorporate by reference the reasons provided by Health Canada in earlier correspondence. In the first paragraph of the Final Decision, Health Canada states:
Based on the information available at this time, Health Canada stands firm on the classification of [the Patch] as a Natural Health Product and regulatory requirements outlined in the [NHP Regulations] apply including site licensing and product licensing requirements.
[41] Similarly, the opening paragraph of the compliance letter reads:
As indicated in the classification recommendation NNHPD provided previously, NNHPD considers the [Patch] to be a Natural Health Product (NHP).
[42] As found by the Application Judge, these statements clearly provide the basis to read the Final Decision in light of the previous correspondence between the parties: Reasons at para. 59. As she further noted, the promotional materials used by the appellant in relation to the Patch were somewhat of a moving target as they changed repeatedly over time in response to Health Canada’s concerns. While some of these concerns were addressed and remedied by the appellant, in whole or in part, others were not.
[43] Throughout its correspondence with the appellant, Health Canada reiterated on a number of occasions that classification is not only based on individual statements on the product label or website, but also on the overall impression left by the representation of the product and how the product or product line is marketed: see, for example, the email from Tracy McCamis dated February 9, 2016 (AB, p. 330); letter of July 5, 2019 (AB, pp, 437-438); letter of August 5, 2021 (AB, p. 560).
[44] As noted by the Application Judge, Health Canada made it clear throughout that it did not consider the appellant to be making therapeutic claims. Rather, it was of the view that the Patch was being represented as operating systemically and thereby modifying the body’s internal organic function. Health Canada identified such representations in its May 21, 2019 and July 5, 2019 letters, where it referred to the information on the appellant’s Canadian website stating that the Patch used a “DFT delivery system” to “infuse the derma” and “provide greater bioavailability and absorption”, which in Health Canada’s view suggested that the Patch achieved benefits through a “systemic mechanism of action” and therefore, by “modifying organic function”. I note that at the hearing, counsel for the appellant mentioned that the statement about providing greater bioavailability was no longer on the website at the time of the Final Decision. Even if that was the case, nothing turns on this; indeed, it would merely confirm the moving target analogy discussed above, and the ongoing nature of this classification exercise.
[45] Another concern raised by Health Canada in relation to the promotional material for the Patch was the images and video on the appellant’s website showing a model wearing the Patch on her upper arm or shoulder. In its July 5, 2019 letter, Health Canada considered that these were “unlikely locations to achieve younger looking skin or an improvement in skin elasticity”.
[46] Finally, the Application Judge noted that Health Canada repeatedly alerted the appellant that Canadian consumers were not insulated from the American promotional materials that extolled the therapeutic uses of the product sold under the same name in the United States. This included the fact that a web search in Canada for “Thrive DFT” or “Thrive patch” brought up the U.S. website and other product-affiliated websites that directly promoted the use of the Patch for weight management and other therapeutic purposes. As Health Canada stated in its August 5, 2021 letter, “websites promoting therapeutic uses of this product can be misleading to the average Canadian consumer about the recommended use of the product, particularly in the context of a label that is almost identical”: AB, p. 561; see also email dated February 9, 2016, AB, p. 330 and letter of October 15, 2018, AB, p. 318.
[47] In my view, when read in conjunction with the earlier correspondence, the Final Decision does provide an internally coherent and rational chain of analysis. As previously mentioned, the Final Decision must be read in the context of the previous exchanges between the appellant and the respondent. The representations upon which Health Canada relied to conclude that the Patch was represented as having a systemic therapeutic effect were clearly identified, and the appellant’s argument that it was left in the dark is simply untenable. This is not one of those instances where there are no dots to connect, nor is it one where the reviewing court has to make up its own reasons to justify the administrative decision. Quite the contrary, it is very clear that Health Canada relied on the promotional material (especially the photo), coupled with the broad claim of improved skin and systemic delivery system, to classify the Patch as an NHP. As the Application Judge aptly summarized (at paragraph 80 of her Reasons):
Health Canada determined that when you look at the image of the model wearing the Patch on her upper arm/shoulder (which it found was an unlikely location to achieve younger looking skin or an improvement in skin elasticity), the lack of clear direction as to where to place the patch, and the absence of any language that the represented product benefits (replenished moisture barrier, improved skin elasticity, skin appearing firm/toned and skin appearing visibly younger) are limited to where the Patch is locally applied, taken together, the [Appellant] suggests a systemic therapeutic use for the Patch.
[48] The appellant, however, claims that the Application Judge erred by considering that the exchanges from 2019 were being incorporated into the Final Decision, for three reasons.
[49] First, the appellant submits that Health Canada’s own affiant, who was part of the team that made the classification decision, confirmed on cross-examination that Health Canada’s position of “stands firm” was intended to reference the earlier November 2021 exchange. I fail to see how this statement could have the significance the appellant would like to attribute to it. It is well established that an official cannot suppl