John Sotos & Faye Ling
Published on March 13, 2015
Posted in: Blog, Faye Lucas, John Sotos
Last November, the Ontario legislature proposed a new law as part of Bill 45, Making Healthy Choices Act, (the “Bill”). The Bill received second reading debate on December 3, 2014 and March 3, 2015. If it is passed, the Bill would create a new law called the Healthy Menu Choices Act, 2014 (the “HMCA”).
In its current form, the HMCA would require all food service providers with at least 20 locations in Ontario to display “the number of calories of every standard food item that is sold or offered for sale” and “any other information required by the regulations”. Any business that sells food prepared for immediate consumption such as restaurants, convenience stores, and cafés would need to post calorie counts (and presumably other nutritional information specified in the regulations) for every food or drink item offered in standardized portions. The HMCA specifically applies to franchisors and would appear to impose liability on franchisors in the event their franchisees do not comply with the act.
The penalties for not complying with the HMCA are significant and also extend to the directors and officers of a corporation that don’t comply with the law:
|First Offence||$5,000 per day||$500 per day|
|Second or Further Offence||$10,000 per day||$1000 per day|
In the franchise context, there are concerns that the proposed law would not only impose an added burden on franchise owners and franchisors in terms of compliance costs, but could also expose franchisors to liability for acts of their franchisees or even their suppliers. Given that the franchisor would be responsible for specifying the caloric values and other information to franchisees to display, how franchisors will effectively manage issues such as over or under-portioning product substitution and consistent supply chain management across franchisees is not known. Many ingredients are sourced from multiple suppliers in different markets and thus, potentially different caloric values. Further, it is unclear how many standardised tests would need to be done and how often. We also do not know the scope of the HMCA in terms of the additional labelling requirements that might be specified in the regulations. For example, comments made during debate of the proposed law focused on the need for sodium levels to be posted as well.
In addition to the implementation issues that food service providers would face, there would be significant challenges in terms of enforcement. Since the proposed law only applies to standardized portion, franchises offering “bespoke” food experiences might be exempt from compliance. Systems such as Subway and Druxy’s are obvious examples of bespoke menu offerings, but even the more traditional McDonald’s franchise has introduced a “Create Your Own” program that allows patrons to custom build their burger out of a selection of ingredients. The HMCA would also empower inspectors to enter a business at any time during regular hours to examine a food item, demand production of the item, and remove it from the premises for review. However, it would be unreasonable to require that all food items tested contain the exact number of calories as the posted calorie counts, given the realities of food preparation. If this is extended to salt, sugar and fat content, strict compliance would be unfeasible most of the time. Exact portioning of ingredients in more complex recipes at a sit down restaurant could prove near impossible, especially during a lunch or dinner rush.
Although it remains to be seen whether the HMCA will come into force, all affected businesses should review the proposed legislation and prepare well in advance of its implementation. In any event, considering the myriad difficulties in implementation and enforcement of the HMCA, food service providers and consumers might query whether improving the quality of ingredients (e.g., by limiting the use of antibiotics and growth hormones) would be a more effective way to achieve a healthier Ontario than mere calorie counting of a theoretical serving.