For many years, cosmetic regulation in Canada was viewed as relatively low risk. Brands focused on label compliance and submitting a Cosmetic Notification Form (CNF) to Health Canada, and enforcement activity was minimal. Environment and Climate Change Canada (ECCC) rarely appeared on the radar for cosmetic companies. The Canadian government plays a central role in introducing and enforcing the regulatory framework for cosmetics, covering various aspects of environmental and public health protection through agencies like ECCC and Health Canada.
That has changed. The regulatory framework now covers a wide range of consumer products, including those produced by home based businesses, and addresses various aspects of compliance and safety.
Over the past two years, ECCC has taken clear and public enforcement action against cosmetic companies under the Canadian Environmental Protection Act, 1999 (CEPA). These actions signal a fundamental shift in how cosmetics are regulated in Canada and highlight a growing compliance gap that many companies, and some regulatory consultants, may be overlooking.
Recent Canadian Environmental Protection Act (CEPA) Enforcement Against Cosmetic Companies
In March 2024, Groupe Marcelle Inc. was fined $500,000 for violating CEPA after marketing cosmetic products containing a PFAS substance without submitting the required Significant New Activity (SNAc) notification. The affected products included eye and lip pencils sold under well-known Canadian brands.
More recently, Estée Lauder Cosmetics Ltd. was fined $750,000 for violating the Canadian Environmental Protection Act, 1999, after an Ontario court found the company guilty of selling finished products—specifically eyeliner—containing polyfluoroalkyl substances (PFAS), also known as forever chemicals, which are considered toxic substances under CEPA. The Ontario court ordered Estée Lauder Cosmetics Ltd. to notify its shareholders about the conviction and to add its name to the Environmental Offenders Registry. In addition to failing to meet CEPA reporting requirements, the company was also found to have failed to comply with an environmental protection compliance order issued as a result of a routine inspection. The compliance order was a formal directive to address the violations, and failure to comply resulted in further legal consequences.
Together, these actions represent more than $1 million in fines against cosmetic companies in Canada within a relatively short period. Just as importantly, they demonstrate that ECCC enforcement of CEPA obligations for cosmetics is no longer theoretical or discretionary. It is active, visible, and financially material. Fines collected from such cases are directed to Canada’s Environmental Damages Fund to support environmental restoration.
What Changed?
CEPA has applied to substances used in cosmetics since September 2001, including obligations related to new substances, significant new activities (SNAc), and environmental risk management. What has changed is enforcement intensity.
ECCC has increasingly focused on substances of concern, including PFAS, and has expanded inspections, compliance verification, and enforcement actions across multiple sectors, including cosmetics. CEPA regulates the importation, sale, and distribution of cosmetic products that contain certain harmful chemical substances, including restricted substances. This reflects a broader shift toward stronger environmental oversight and greater accountability for importers and manufacturers.
Cosmetic products are no longer treated solely as consumer goods regulated by Health Canada. They are also viewed as formulations containing substances with potential environmental and human health impacts. The Chemical Management Plan (CMP) is Canada’s strategy for assessing, monitoring, and managing chemicals that may pose safety concerns or adverse effects to human health or the environment.
CEPA provides a framework for the assessment and management of substances that may have an adverse impact on the environment or human health, and companies are encouraged to develop safer alternatives to toxic cosmetic ingredients.
Where Many Cosmetic Reviews Are Incomplete
Despite this shift, many cosmetic compliance reviews in Canada still focus narrowly on:
- Cosmetic label review
- Cosmetic Notification Form submission
Companies must also check the Domestic Substances List (DSL) and Non-Domestic Substances List (NDSL) before formulating or importing products to ensure compliance with CEPA regulations.
While these steps are necessary, they do not assess whether a product meets its obligations under CEPA.
A cosmetic notification does not evaluate whether an ingredient triggers a SNAc requirement, whether a substance is subject to CEPA controls, or whether additional environmental reporting obligations apply. As the recent enforcement actions demonstrate, a product can be properly notified to Health Canada and still be non-compliant under CEPA.
This creates a risk for companies that assume cosmetic notification equals full regulatory compliance. To sell cosmetics in Canada, companies must adhere to strict safety standards and maintain sanitary conditions in manufacturing to protect consumers from harmful chemicals and unsafe practices. The primary objective of the Cosmetic Regulations is to protect consumers from harmful chemicals and unsafe manufacturing practices.
The Role of the Cosmetic Ingredient Hotlist in Compliance
The Cosmetic Ingredient Hotlist is a cornerstone of regulatory compliance for the cosmetic industry in Canada. Maintained by Health Canada, this comprehensive list identifies substances that are either strictly prohibited or subject to specific restrictions in cosmetic products sold on the Canadian market. The Hotlist is regularly updated to reflect new scientific findings, evolving environmental risks, and regulatory changes, ensuring that it remains a relevant tool for protecting both human health and the natural environment.
For cosmetic companies, adherence to the Hotlist is not optional—it is a critical requirement under the Canadian Environmental Protection Act (CEPA) and the Food and Drugs Act. Before the first sale of any cosmetic product, companies must notify Health Canada and provide a full list of cosmetic ingredients. The Hotlist is divided into two main sections: Prohibited Ingredients, which cannot be used in any cosmetics sold in Canada, and Restricted Ingredients, which may be used only under certain conditions or with specific cautionary statements on product labels. For example, camphor is permitted only up to a 3% concentration, while ethyl methacrylate requires a clear warning to avoid skin contact.
The Hotlist is designed to address substances that pose risks to consumer safety or the environment, but it is not exhaustive. If a new ingredient is found to present a health risk or environmental hazard, it can be subject to immediate regulatory action—even before formal inclusion on the Hotlist. This proactive approach helps ensure consumer safety and supports sustainable development in the cosmetic industry.
To ensure compliance, companies must go beyond simply checking the Hotlist. They should assess potential health and environmental risks associated with all cosmetic ingredients, referencing the Domestic Substances List (DSL) to confirm regulatory status and following Good Manufacturing Practices (GMP) to maintain hygienic production and product safety. Accurate, bilingual labeling is also required under the Consumer Packaging and Labelling Act, and companies must avoid misleading claims that could trigger enforcement action.
Recent enforcement cases, such as the significant fines levied against Estée Lauder Cosmetics Ltd. for CEPA violations, underscore the importance of strict adherence to all regulatory requirements. Non-compliant products can result in Environmental Protection Compliance Orders from Environment and Climate Change Canada, and fines are directed to Canada’s Environmental Damages Fund to support environmental restoration.
In summary, the Cosmetic Ingredient Hotlist is an essential tool for companies aiming to ensure compliance with Canadian cosmetic regulations. By staying informed about regulatory changes, working closely with regulatory authorities, and rigorously assessing the safety and environmental impact of their products, cosmetic companies can protect both consumers and the environment—and avoid the costly consequences of non-compliance.
Dell Tech’s Integrated Approach to Health Canada Cosmetic Compliance
Recognizing this evolving regulatory landscape, Dell Tech incorporated a formal CEPA review into its cosmetic evaluation process two years ago. Dell Tech assists businesses in navigating the regulatory framework and associated regulations for cosmetic compliance, helping manufacturers and importers meet legal requirements and avoid compliance pitfalls. Our cosmetic regulatory support includes:
- Cosmetic label review, including assessment of fragrance allergens, inner label requirements, and compliance with international nomenclature (INCI) for ingredient listing
- Cosmetic notification submission
- A comprehensive ingredient assessment against
- Health Canada Hotlist
- Fragrance Allergen requirements
- Microbeads assessment
- CEPA regulatory requirements including:
- DSL listing
- Ministerial conditions that may apply
- SNAcs that may apply
- VOC regulations
- Microbeads ban
Cosmetic product labels must comply with specific requirements outlined in the Food and Drugs Act, Cosmetic Regulations, and Consumer Packaging and Labeling Act, and all mandatory information must appear in both English and French. The label must include the identity of the cosmetic, net quantity, name and principal place of business of the dealer, list of ingredients, and avoidable hazards and cautions. Bilingual labeling is a legal requirement across all Canadian provinces and is strictly enforced. The INCI name shall be used for each ingredient on cosmetic labels. The review process covers both rinse off products and leave on products, and includes deodorants as part of the definition of cosmetics. Natural health products are regulated separately but are considered in the broader regulatory context. The assessment includes consideration of oil resistance and water or oil resistance properties in cosmetic formulations. Cosmetics must be produced, preserved, packaged, and stored under hygienic conditions to ensure consumer safety, and Health Canada conducts post-market surveillance and has the authority to take corrective action if safety regulations are violated.
This approach reflects how regulators now assess cosmetic products: through both a health and an environmental compliance lens.
By identifying CEPA obligations early, companies can address potential issues proactively rather than responding to inspections, enforcement letters, or fines after the fact.
What This Means for Cosmetic Companies in Canada
The recent CEPA enforcement actions against Estée Lauder and Groupe Marcelle are not outliers. They are clear indicators of a changing regulatory environment for cosmetics in Canada.
Companies relying on outdated assumptions about “low enforcement” or working with regulatory support that does not include CEPA review may be exposed to unnecessary risk. As enforcement continues to increase, incomplete cosmetic compliance reviews are becoming a liability. All cosmetics sold in Canada must be safe for use and must not pose any health risk to humans. The primary objective of the Cosmetic Regulations is to protect consumers from harmful chemicals and unsafe manufacturing practices, addressing any safety concerns that may arise.
Cosmetic regulation in Canada is no longer just about notification. It is about understanding how multiple regulatory frameworks intersect and ensuring products are compliant across all of them.
