Big changes are coming to Ontario’s restaurant landscape. As of January 1, 2017, the Healthy Menu Choices Act (Act) will require food service chains with 20 or more locations in Ontario to disclose calorie information for most standard food and drink items on menus, labels, tags and signage. The changes will require many in the food service sector to implement significant changes to update their current signage and menus. The Act is intended to help Ontario residents make healthier food and beverage choices while dining out and to raise public awareness of the calorie content of food items.
Once in force, the Act will require every person who owns or operates a “regulated food service premise” to display calorie information for each standardized food and drink item offered for sale at the premise. The calorie content must generally be displayed on each menu where a food or drink item is listed or depicted, as well as on the label or tag where the item is put on display. The regulations also set out detailed requirements on how the calorie information must be displayed, including with respect to placement, size and prominence.
The Act applies to restaurant-type food and drink items that are offered for sale in standardized portions and are ready for immediate consumption with no further preparation. The Act exempts the following items from the labelling requirements: custom orders; self-serve condiments available for free that are not listed on the menu; hospital food; and food or drink items offered for sale for less than 90 days per calendar year. Partial exemptions also exist for alcoholic beverages as well as standardized food items on display that are already labelled with a nutrition facts table. In addition, food service premises that operate for less than 60 days per year and food service premises located in a school, correctional facility or a child care centre are exempt from the menu labelling legislation.
The Act also requires owners and operators to display a specific contextual statement (i.e. information relating to the average number of calories required for a typical person per day) on menus or on a sign that is visible and legible to customers when making their order selections. Like the calorie disclosures, the contextual statement is also subject to requirements relating to placement, size and prominence. In particular, the contextual statement must contain the following information: “The average adult requires approximately 2,000 to 2,400 calories per day; however, individual calorie needs may vary”. If the regulated food service premise sells standard food items for children, then a corresponding statement for children may also be required.
The Act requires that the number of calories in a standard food item be determined by either laboratory testing or a nutrient analysis method, in either case, which the person who owns or operates the regulated food service premises reasonably believes will provide an accurate calorie count.
In addition to on-site requirements, the Act may also capture materials that are distributed outside of food service premises. In particular, “menu” is currently defined to include a document or other means of communicating information that lists standard food items offered for sale, including: an electronic menu, a menu board, a drive-thru menu, an online menu or a menu application, an advertisement and a promotional flyer. Online menus and menu applications, advertisements and promotional flyers are exempt from the requirements only if they satisfy one of the following criteria: they do not list prices for standard food items, or they do not list standard food items that are available for delivery or takeaway ordering.
As a result, certain advertisements and promotional flyers that are circulated outside of the food service premise may be required to comply with the Act. For example, direct mail or online advertisements that display prices for standard food items that are available for delivery or takeaway ordering would need to provide appropriate calorie information.
Ontario will be the first Canadian jurisdiction to bring mandatory calorie labelling laws into effect. British Columbia has a voluntary nutrition information program for restaurants known as the Informed Dining program, which was introduced in 2011.
IS YOUR BUSINESS SUBJECT TO THE ACT?
A “regulated food service premise” is a premise where meals are prepared, sold or served for immediate consumption and that is part of a chain with 20 or more locations in Ontario that operate under the same or substantially the same name, regardless of ownership. The types of establishments captured could include restaurants (including quick service restaurants), grocery stores, convenience stores, movie theatres, amusement parks, food trucks, bakeries, buffets and ice cream and coffee shops where standard food items are served.
The Act also specifies that a person who owns or operates a regulated food service premise means a person who has responsibility for, and control over, the activities carried on at a regulated food service premise, and may include a franchisor, a licensor, a person who owns or operates the premise through a subsidiary and a manager of the premise. As a result, both franchisors and franchisees may be caught by this legislation.
IMPACT ON FRANCHISORS
It is worth noting that the Act’s original draft specifically included franchisors and licensors within the definition of a person who “owns and operates” a regulated food premise. Both the Ontario Bar Association’s Franchise Law Section (in a submission dated April 7, 2015 to Ontario’s Ministry of Health and Long-Term Care) and the Canadian Franchise Association (in a submission dated April 22, 2015 to the Standing Committee on General Government) advocated to have this definition amended on the basis that it was not reflective of the franchise business model in which the franchisee is an independent contractor responsible for the day-to-day operations of their business in compliance with all applicable laws. Under the original definition, franchisors may have unfairly been liable for a franchise failing to comply with the Act in a circumstance where the franchisor did not supply the food items being served and had limited control over the operations of the franchise. The Act’s proposed application to licensors was also problematic as licensors do not typically exert any control over licensees’ method of operation other than controls relating to the protection of the licensed marks. The Act’s final version includes a more fact-based determination of who has actual responsibility for, and control over, the activities of the premise. In the result, a franchisor’s potential liability for non-compliance with the Act at the franchise level will likely be determined by the degree of control exercised by the franchisor over the franchisee’s operations.
On July 21, 2016, the Ontario government posted proposed amendments to clarify and provide guidance on portions of the regulations under the Act. These proposed amendments would, among other things:
- Add a definition for “grocery store” and exempt certain food items sold at grocery stores from the Act (e.g., deli meats and cheeses, prepared fruit and vegetables intended for multiple persons, flavoured bread, buns and rolls, and olives and antipasti)
- Revise the definition of “menu” to specifically exempt billboard, radio and TV advertisements from menu labelling requirements
- Exempt standard food items in a vending machine from the requirement to post calories
- Revise the requirements relating to the contextual statement and incorporate additional changes that would come into effect on January 1, 2018 (in particular, the content of the contextual statement would be slightly different and contain a mandatory child component from 2018 onwards)
It remains to be seen whether the Ontario government will implement some or all of these proposals before the January 1, 2017 coming into force date for the Act. In any event, businesses impacted by the Act will need to finalize their compliance preparation over the next few months. New signage and menus may entail significant costs, but might also provide an opportunity for refreshing an establishment’s signage and branding. It should also be noted that the Act provides the Lieutenant Governor in Council with regulation-making authority to require additional information about standard food items to be displayed at a later time, so the calorie disclosure requirements that come into effect on January 1, 2017 may be only the beginning of a new era of nutritional disclosure in Ontario.
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