Canada Gazette, Part I, Volume 159, Number 45: Regulations Amending the Medical Devices Regulations (Establishment Licences)

November 8, 2025

Statutory authority
Food and Drugs Act

Sponsoring department
Department of Health

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

The Food and Drugs Act (the Act) and the MDR govern the importation and sale of medical devices in Canada and have undergone significant changes and modernization in the last decade to increase oversight of public safety. The health technology sector continues to evolve through rapid innovation and increasingly globalized supply chains, challenging existing oversight mechanisms. As a result, ensuring Canada’s regulatory frameworks are well-equipped to adapt to the evolving market remains paramount. On December 14, 2024, new regulatory amendments to the MDR came into force with respect to recalls, establishment licensing, and terms and conditions. While these amendments are a significant milestone in modernizing the MDR and managing health and safety risks, Health Canada continues to examine ways of improving the MDEL framework to strengthen oversight of the supply of medical devices to Canada while reducing the unnecessary burden, and to help ensure that regulated parties better understand their obligations while conducting licensable activities.

Licensing barriers for stakeholders

The MDR currently require any person that imports a medical device to verify that the person they import from is an MDEL holder. The effect of this requirement is that all foreign distributors selling in Canada need an MDEL.

Industry stakeholders have raised concerns that requiring both foreign distributors and their Canadian importers to hold an MDEL creates unnecessary burden, costs, and redundancies. For example, Canadian MDEL holders must verify that all their foreign distributors hold an MDEL, even if they are subsidiary entities. Stakeholders have also shared concern that this duplicative licensing scheme is not aligned with that of other regulators, such as the United States (U.S.), where only one registration is needed for domestic or foreign establishments under the control of the same company. As a result, foreign distributors may decide not to sell to Canada, which could potentially disrupt the supply of devices to Canada.

Targeted compliance and enforcement action with supplier information

Since February 2020, Health Canada has requested that MDEL holders voluntarily provide supplier information as part of the MDEL application. Supplier information is also requested on an ad hoc basis from MDEL holders by inspectors when following up on compliance matters. Access to supplier information helps to support traceability when health and safety risks arise. Health Canada considers a supplier to be any person, other than the manufacturer, that sells a medical device to an MDEL holder. These include Canadian importers, domestic distributors selling within Canada, and foreign distributors selling in Canada.

Given the voluntary nature of this request, the majority of MDEL holders do not provide their supplier information. Therefore, Health Canada does not have sufficient information to have a comprehensive line of sight on who is supplying medical devices to MDEL holders, including those selling in Canada. This can challenge Health Canada’s ability to trace potential non-compliant medical devices through the supply chain when health and safety risks arise.

Addressing non-compliant documented procedures through explicit requirements

The MDR already require MDEL applicants (and holders) to attest to having documented procedures in place to manage health and safety risks related to the import and distribution of medical devices in Canada; however, during inspections, Health Canada has observed that documented procedures related to certain establishments’ safety management activities were missing or incomplete. The failure of MDEL holders to meet the existing obligations to establish, implement, and maintain documented procedures related to these safety management activities, such as incident reporting and the maintenance of distribution records, poses a health and safety risk to people in Canada. Therefore, Health Canada proposes to make these regulatory obligations explicit, regarding the establishment, implementation, and maintenance of documented procedures, to better facilitate compliance by industry.

Background

The Act and MDR protect public safety by regulating activities, such as the manufacture, sale and advertisement of medical devices. Health Canada is responsible for activities to help make sure that medical devices continue to be safe, effective, and of high quality. These activities include compliance and enforcement oversight, as well as administration of the MDEL framework. Any person that conducts licensable activities (i.e. importation and distribution) in respect of these products must hold an MDEL as set out in the MDR, unless otherwise exempt.

In July 2024, Health Canada completed Phase I of Modernizing the Medical Device Establishment Licensing Framework, keeping with the commitments set out in the Forward Regulatory Plan and the Regulatory Stock Review Plan. In Phase I, the MDR were amended to improve how recalls are conducted and to add new ministerial powers to impose terms and conditions on an MDEL. This current regulatory proposal further delivers on commitments made to stakeholders to modernize this framework. This proposal also builds upon consultations throughout Phase I, in which stakeholders expressed concerns that the current MDEL framework limits Health Canada’s ability to foster an innovative and competitive business environment and that it is not in alignment with the frameworks of other jurisdictions. Stakeholders noted that these perceived barriers to competitiveness and innovation may dissuade industry from doing business in Canada, which may impact the availability of medical devices to people in Canada. Further, the COVID-19 pandemic reinforced the need to have a strong regulatory framework in place to enable Health Canada to continue to provide efficient, agile, and risk-based oversight of medical devices to protect the health and safety of people in Canada.

Medical devices

Medical devices include a wide range of products, such as pacemakers, artificial heart valves, hip implants, synthetic skin, medical laboratory diagnostic instruments, test kits for diagnosis, medical masks, and contraceptive devices. Rapid innovation and advances in medical device technology have led to the development of novel devices (such as software as a medical device and 3D printed implants), growth in the number of participants that supply medical devices to Canada, and new means for consumers to access medical devices (e.g. selling and advertising online).

MDEL framework

The MDR classify medical devices into four classes, with Class I representing the lowest risk to health and Class IV representing the highest risk to health. The Minister issues MDELs to importers and distributors of all four device classes, as well as to manufacturers of Class I devices (unless otherwise exempt). An MDEL permits importation and/or distribution (sale) of a medical device in Canada.

MDEL requirement based on activity type

Under section 44(3) of the MDR, any person that imports a medical device must verify that the person they import from holds an MDEL. Section 44(4) of the MDR sets out an exemption for foreign manufacturers, so long as the importer holds an MDEL, or if the medical devices are imported directly from a Class II to Class IV manufacturer. The same exemptions do not apply to foreign distributors: foreign distributors and importers are required to hold an MDEL. Currently, Health Canada is applying a risk-based licensing approach to this duplicative licensing requirement for importers that hold an MDEL, as importers have a responsibility to ensure the safety and quality of medical devices imported into Canada.

Under section 44(2) of the MDR, health care facilities and retailers are exempt from holding an MDEL, but the person that they import from must hold an MDEL.

MDEL application

Section 45 of the MDR sets out the application requirements for an MDEL. All MDEL applicants are required to provide information, such as basic establishment and contact information, and details about the classes of medical devices and the manufacturers. MDEL holders are also required to have their licences reviewed on an annual basis under section 46.1 of the MDR.

Responsibilities of MDEL holders 

Health Canada inspects companies that manufacture, import, or distribute medical devices for sale in Canada to verify compliance with the Act and its regulations.

Paragraphs (g) to (j) of section 45 of the MDR require all MDEL holders and applicants to attest to having documented procedures in place for the maintenance of distribution records, complaint handling, recalls, incident reporting, handling, storage, delivery, installation, corrective actions, and servicing for medical devices, as well as to provide the addresses of the buildings where these activities take place. The requirement to attest to having these procedures, and to identify in which buildings they are in place, indicates that the procedures are to be established, implemented, and maintained.

Sections 52 to 63 of the MDR provide further detail on some of the safety management activities attested to under paragraphs (g) to (i) of section 45, but not all of them. The specificity regarding only some of the safety management activities has resulted in stakeholders misinterpreting what it means to have documented procedures in place. It is the responsibility of manufacturers, importers, and distributors to have oversight on the safety of medical devices throughout their lifespan. Ensuring that documented procedures for safety management activities are established, implemented, and maintained is critical for reducing the risk of exposing the public to low quality or ineffective medical devices. MDEL holders have requested clarity on their regulatory obligations with respect to the requirements regarding documented procedures for their safety management activities.

Objective

The objectives of this proposal are to modernize the MDEL framework to better respond to a rapidly innovative industry, while maintaining the oversight to better manage emerging health and safety risks. These objectives include reducing unnecessary burden to facilitate international alignment, improving Health Canada’s ability to identify and monitor non-compliant medical devices and establishments that may pose a risk of injury to health, and providing certainty with respect to the requirements in the MDR.

Description

Proposed amendments to the Medical Device Regulations

Risk-based approach to licensing foreign distributors

The proposed amendments would remove the requirement for Canadian MDEL holders to import from foreign distributors with an MDEL. Persons without an MDEL that import (i.e. retailers and health care facilities) would continue to be required to ensure that the persons that they import from hold an MDEL.

Mandatory submission of medical device supplier information

The proposed amendments would require MDEL applicants to provide, as part of their MDEL application, supplier information, including the name of the supplier, their address, and the risk classification of the devices sold to the applicant. The MDEL holder would then be required to update the supplier information once a year at an annual licence review. This requirement would allow for more targeted and efficient compliance and enforcement actions by enabling Health Canada to identify MDEL holders that may be importing and/or selling non-compliant devices. This would also support Health Canada’s risk-based licensing approach by maintaining a line of sight on foreign distributors without imposing a redundant licensing requirement.

Explicit requirements for documented procedures

The proposed amendments would include explicit provisions reinforcing the existing requirements for MDEL holders to establish, implement, and maintain documented procedures for the following safety management activities: the maintenance of distribution records; incident reporting; provision of information concerning any serious risk of injury to human health; handling, storage, delivery, installation, corrective action; and servicing of devices (where applicable). The requirement for manufacturers, importers, and distributors to establish and implement documented procedures for complaint handling and recalls is already explicit. Making the existing requirement to maintain documented procedures explicit would further reiterate stakeholders’ regulatory obligations under the MDR.

For consistency in the MDR, and to provide the clarity requested by MDEL holders, the proposed amendment would incorporate manufacturers of Class II, III, and IV medical devices (where applicable) into the explicit documented procedures provisions. Class II, III and IV manufacturers are already explicitly required to establish, implement, and maintain documented procedures as part of their quality management system (QMS) certification under CAN/CSA-ISO 13485, Medical devices — Quality management systems — Requirements for regulatory purposes (ISO 13485:2016). Therefore, making Class II, III, and IV manufacturers subject to these provisions would not impose additional burden.

Under the proposed amendments, the explicit provisions related to documented procedures would make the attestation unnecessary. Therefore, section 45 of the MDR would be updated to reduce the number of attestations required by MDEL holders and applicants during the licensing process.

These changes would align with the guiding principles of federal regulatory policy in making regulations, and their related activities, accessible and understandable.

Miscellaneous and consequential amendments

In line with reducing administrative burden, the requirement for MDEL applicants (or holders) to provide information on the medical specialities in respect of which the device is imported or distributed for each manufacturer, would be repealed. Currently, this information does not serve any use for Health Canada in protecting the health and safety of people in Canada.

Coming into force

The proposed amendments to the MDR would come into force six months from the date of registration.

MDEL applications still being processed when the proposed amendments come into force (i.e. no decision has been made to grant the licence) would be required to submit supplier information before a licence would be issued.

Regulatory development

Consultation

In 2018, during sectoral consultations, stakeholders identified that the MDEL requirements were overly burdensome and were not in alignment with other jurisdictions. Stakeholders raised similar concerns again during broad consultations with MDEL holders in 2019.

On November 9, 2024, Health Canada published the Notice of Intent — Consultation on modernizing the medical device establishment licensing framework (Phase II), followed by a 30-day comment period. This notice was meant to inform stakeholders of the policy direction for the current proposal and to provide opportunities to be heard. In addition, on November 21, 2024, Health Canada published a Medical Devices Compliance Program Bulletin and issued a mass mail-out to all MDEL holders to notify impacted stakeholders of the notice and direct them to provide feedback.

Overall, the proposal was well received and no major objections were raised. Many stakeholders supported efforts to reduce administrative burden by way of reducing redundancies in the MDEL licensing scheme.

Notably, this is the first time stakeholders were consulted on the proposal to amend the MDR to require supplier information at the time of the initial MDEL application and at the annual licence review. Some stakeholders had been under the impression that this was already a regulatory requirement, as some of them have been submitting this information on a voluntary basis. This misinterpretation fed into stakeholders’ desire for clarity around their obligations as regulated parties, which included a request to clarify the language around documented procedure requirements. Stakeholders indicated that providing supplier information now on a mandatory basis would result in a negligible incremental impact and that the cost per company would be low if the required information and frequency (once per year) remain identical to current requirements.

On November 28, 2024, Health Canada sent a targeted survey to foreign MDEL holders. The purpose of this survey was to better understand the business profile of these companies, as well as how the proposed removal of the MDEL requirement for foreign distributors when their importer already holds an MDEL may affect their business decisions. The stakeholder survey yielded 25 total responses.

Modern treaty obligations and Indigenous engagement and consultation

Having consulted the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, these amendments are not expected to have an impact on the Government’s modern treaty obligations. Health Canada completed an initial assessment that examined the geographical scope and subject matter of the initiative in relation to rights protected by section 35 of the Constitution Act, 1982, modern treaties, and international human rights obligations, and did not identify any potential modern treaty impacts.

Instrument choice

Health Canada assessed each of the following options using the objective of modernizing the MDEL framework to better respond to a rapidly innovative industry, as well as managing emerging risks.

Option 1: Non-regulatory measures and maintaining status quo

Continuing to rely on policy and guidance to set expectations for MDEL holders would not meet Health Canada’s objective of modernizing the MDR outlined in the Forward Regulatory Plan and the Regulatory Stock Review Plan. Stakeholders have explicitly requested regulatory amendments to provide predictability and certainty for their operations.

Risk-based approach to licensing foreign distributors

A risk-based approach to enforcing MDEL requirements in respect of foreign distributors has created uncertainty and unpredictability for the industry. Maintaining the status quo would not align with the principles of regulatory modernization in reducing regulatory burden commensurate to risk and would not address the disparities that exist between Canada’s regulatory framework and those of other regulators.

Mandatory supplier information from all MDEL holders

Relying on the voluntary submission of supplier information cannot currently achieve the desired level of oversight of medical devices on the market. Requiring an MDEL applicant or holder to provide supplier information to fulfil the licensing obligations under the MDR, when it is only referenced in guidance and policy, is not enforceable unless specified in the MDR. Maintaining the status quo would not align with the goal of improving regulatory oversight.

Documented procedures

The existing requirements for MDEL holders to establish, implement, and maintain documented procedures related to safety management activities may be insufficient in aligning with the guiding principles of the Cabinet Directive on Regulation to help ensure that regulations are accessible and understandable. Maintaining the status quo would not align with the principle of this proposal to provide certainty by responding to concerns raised by industry around the interpretation of the MDR.

Overall, only regulatory amendments to the MDR would achieve the departmental modernization commitments to reduce regulatory burden, improve regulatory oversight, and provide certainty and transparency in the MDR. Continued reliance on policies with regard to risk-based licensing, the solicitation of supplier information, and documented procedure requirements leaves uncertainty in approaches taken based on risk.

Option 2: Proposed regulatory amendments to improve oversight and modernize establishment licensing requirements for medical devices

This is the preferred option, as it would contribute to strengthening Health Canada’s oversight of medical devices while reducing burden duplication.

Risk-based approach to licensing foreign distributors

The MDR require any person that imports a medical device to verify the person that they import from is an MDEL holder. This means that all foreign distributors selling in Canada need an MDEL. Currently, Health Canada has taken a risk-based approach to enforcing the regulatory requirement for importers that hold an MDEL, as this is considered lower risk due to the fact that the Canadian importer already holds an MDEL. Removing the duplicate licensing scheme would help to reduce burden in this regulatory framework, while prioritizing the health and safety of people in Canada.

Mandatory supplier information from all MDEL holders

Supplier information is currently submitted on a voluntary basis at the time of the MDEL application or annual licence review. Since only some MDEL holders have been providing supplier information, Health Canada does not have the desired line of sight on who is supplying devices into Canada. It is imperative that the submission of supplier information be tied to a regulatory requirement in order to allow Health Canada to create a comprehensive database that does not rely on voluntary submission of information, which would help to efficiently identify persons selling in and within Canada to enable risk-based and targeted compliance and enforcement. Comprehensive supplier information would lead to greater operational efficiency when a supplier may have sold to several importers. With a more robust understanding of the medical device supply chain, Health Canada could target MDEL holders and inform them if they were sold a defective device from a single supplier, or a combination of suppliers, which would help streamline recalls and may curtail the exposure of people in Canada to non-compliant or defective medical devices.

The supplier information requirement would also allow Health Canada to have continued line of sight on foreign distributors that would no longer be required to hold an MDEL if their importer already holds one. This would reduce licensing burden, while continuing to maintain oversight of health and safety risks to ensure that they continue to be sufficiently managed.

Documented procedures

Despite MDEL holders and applicants attesting to having documented procedures regarding their safety management activities in place, Health Canada has observed non-compliance during MDEL inspections, and stakeholders have indicated to Health Canada that there is a lack of clarity regarding their regulatory obligations to establish, implement, and maintain documented procedures. It is imperative that every such activity have an associated documented procedure to ensure that processes are clearly defined, monitored, and systematically reviewed so that a rapid response can be employed if health and safety issues arise with marketed medical devices. The proposed amendments would put forward explicit regulatory requirements for stakeholders’ obligations to establish, implement, and maintain all of these documented procedures.

Taken together, these proposed amendments would deliver regulatory modernization commitments outlined in the Forward Regulatory Plan and the Regulatory Stock Review Plan to create more agile, flexible regulations that reduce burden, provide certainty in regulatory obligations, and improve regulatory oversight in managing emerging health and safety risks.

Regulatory analysis

Benefits and costs

This section provides a description of the methodology used in the cost-benefit analysis, as well as a quantitative and qualitative depiction of the estimated costs and benefits of the regulatory proposal. There are no new costs expected for people in Canada, and there are limited costs estimated for industry and the Government of Canada. The estimated costs and benefits of the Regulations Amending the Medical Devices Regulations (Establishment Licences) [the proposed Regulations] are determined by incremental differences between two future scenarios, one where the current regulatory framework does not change (baseline scenario) versus one where the proposed amendments come into force (regulatory scenario). Key assumptions are as follows:

• all costs and benefits are presented in 2025 dollars;
• a discount rate of 7% was used in the analysis;
• the proposed Regulations would come into force after a six-month transition period once the proposed Regulations are registered; and
• the analysis evaluates the costs and benefits over 10 periods of 12 months (i.e. annually over 10 years).

Data collection

In November 2024, a targeted survey was distributed to all foreign MDEL holders. The survey was used to better understand the business profile of these companies, as well as how the proposed removal of the MDEL requirement for foreign distributors when their importer already holds an MDEL could affect their business decisions. The stakeholder survey yielded 25 total responses.

In addition, in 2022, a survey was sent to all MDEL holders that asked stakeholders to provide information on the impacts of compiling and submitting information to Health Canada. The survey yielded 122 total responses.

The information obtained from the surveys, internal discussions, and publicly available information provides the basis for the cost estimates presented below.

Costs to industry

Cost of submitting a list of medical device suppliers

Health Canada currently requests that MDEL applicants and holders voluntarily provide supplier information. The proposed amendment would require MDEL applicants and MDEL holders to identify and provide supplier information during the initial application and once a year during their annual licence review (if they are an importer or distributor). There are expected to be approximately 2 300 importers and distributors that would be required to submit supplier information to Health Canada during their licence application and reviews. Analysis of historical data suggests that this value is expected to remain relatively stable throughout the analysis period. Currently, of the 2 300 importers and distributors, there are around 800 organizations that submit their annual supplier information voluntarily to Health Canada. Therefore, the proposed amendment would result in approximately 1 500 organizations that would be required to submit supplier information in the first year after the coming into force.

After the first year, it is estimated that around 240 organizations would apply for a new MDEL each year, requiring them to provide full supplier information. It is also estimated that 1 260 organizations would only update their supplier information during an annual licence review, if it is different from the initial application.

The average cost to compile and submit supplier information to Health Canada for a new application is estimated to be $400 (in 2025 dollars) as reported by industry respondents during a 2022 MDEL stakeholder survey. After the initial application, the cost for an organization to update supplier information for subsequent years (as required during annual licence review) is estimated to be approximately $70 per year.

In summary, the estimated first-year cost of compiling and submitting supplier information is approximately $600,000. After the first year, the ongoing cost of compiling and submitting supplier information for new organizations is estimated to be approximately $96,000 per year, and updating supplier information for existing organizations is estimated to be approximately $88,000 per year. Therefore, the total cost would be $1.68M (PV) over the 10-year analysis period.

Cost of implementing and maintaining documented procedures

Section 45 of the MDR currently requires MDEL applicants to attest to having documented procedures in place to manage health and safety risks related to the importation and distribution of medical devices in Canada. Health Canada is proposing to make current requirements more explicit for MDEL holders with respect to the establishment, implementation, and maintenance of documented procedures pertaining to safety management activities, which are designed to better manage health and safety risks related to medical devices sold in Canada.

Manufacturers of Class II to IV medical devices are already required to have a QMS in compliance with ISO 13485:2016, and this QMS requires manufacturers to establish, implement, and maintain documented procedures related to their safety management system. Therefore, the requirement for Class II to IV manufacturers to implement and maintain documented procedures are not treated as incremental costs because firms are already bearing these costs in the baseline.

In summary, the proposed amendments would provide certainty on the requirement for MDEL holders to establish, implement, and maintain documented procedures, and no new costs are expected for industry.

Costs to Government

Cost of taking a risk-based approach to licensing foreign distributors

Foreign distributors that only sell through Canadian importers would no longer be required to hold an MDEL under the proposed amendment. However, foreign distributors that sell to Canadian health care facilities or retailers in addition to Canadian importers would still be required to hold an MDEL.

The proposed amendment would result in fewer MDELs due to some foreign distributors no longer requiring an MDEL. It is estimated that Health Canada would no longer be collecting approximately $333,000 from foreign distributors per year. The reduction in the value of fees collected would be reflected in the next fee update, thus is not treated as an incremental cost for cost-benefit analysis purposes.

Cost of collecting new medical device supplier information

There is an expected cost impact to Health Canada from receiving additional medical device supplier information requiring manual data entry. Medical device supplier information is currently provided to Health Canada voluntarily by some organizations; however, it is not a regulatory requirement. The proposed amendment would require medical device supplier information to be submitted by all MDEL applicants and MDEL holders.

Internal data suggests that approximately 800 MDEL holders voluntarily provided supplier information, while 1 500 MDEL holders did not. Therefore, it is anticipated that the information of 1 500 suppliers would be reviewed, verified, and entered into Health Canada’s supplier database in the first year in response to the proposed amendment. After the first year, it is assumed that 240 importers and distributors would apply for a new licence each year, and that approximately 1 260 organizations would update their supplier information each year if it is different from the initial application.

The estimated cost to review, verify, and enter initial supplier information from one MDEL holder or applicant is estimated to take around 45 minutes, resulting in a cost of approximately $39. The cost of updating existing supplier information for one organization is estimated to take 8 minutes, resulting in a cost of approximately $7. This is based on internal data that suggests that, when an organization updates its supplier information each year at annual licence review, there are on average two supplier changes that would need to be manually entered in a Health Canada database.

Therefore, the first-year cost of managing the additional supplier information is estimated to be approximately $58,000, with an ongoing cost of approximately $9,000 per year to enter new supplier lists. In addition, after the first year, it is estimated that managing supplier information each year during annual licence review would cost approximately $8,700 per year. The total cost over the 10-year analysis period is estimated to be $163,000 (PV).

Cost of compliance promotion and updating guidance documents

Health Canada is expected to incur minimal costs associated with compliance promotion and updating guidance documents due to the proposed amendments. The primary expenses would include developing communication products to be distributed to affected stakeholders as well as updating guidance and procedural documents.

These costs are expected to be negligible, and Health Canada expects to manage additional workload costs within existing resources.

Benefits to industry

Benefit of a risk-based approach to licensing foreign distributors

The proposed amendment would result in some foreign distributors no longer requiring an MDEL. The benefit to foreign distributors is estimated to be approximately $333,000 in saved fees per year. However, for CBA purposes, costs and benefits to foreign companies do not have standing, and thus the impacts are acknowledged but not included in the total monetized benefits.

Importers that currently import or will import in the future from foreign distributors would benefit from no longer verifying if a foreign distributor has an MDEL.

The cumulative impact of the proposed amendment for risk-based licensing, including supplier lists and documented procedures, provides additional clarity to industry.

Benefits to Government

Benefits of implementing and maintaining documented procedures

The proposed amendment would make requirements to establish, implement, and maintain documented procedures more explicit. Explicit requirements for establishing and maintaining documented procedures would provide additional clarity to industry, which should make compliance, and by extension inspections, more efficient.

Benefits of receiving medical device supplier information

Additional supplier information would allow for more targeted and efficient compliance and enforcement actions by enabling Health Canada to identify MDEL holders who may be importing and/or selling non-compliant devices, thereby improving Health Canada’s ability to trace potential non-compliant medical devices through the supply chain when health and safety risks arise.

Table 1: Cost statement

Impact	Base year	Other relevant years (year 2)	Final year	Total (PV)	Annualized value
Cost of submitting a list of medical device suppliers (industry)	$600,000	$184,000	$184,000	$1,680,000	$240,000
Cost of collecting new medical device supplier information (Government)	$58,000	$18,000	$18,000	$163,000	$23,000
Total costs	$658,000	$202,000	$202,000	$1,843,000	$263,000

Positive impacts

• The proposed amendments would result in foreign distributors no longer requiring an MDEL. The benefit to foreign distributors is estimated to be approximately $333,000 in saved fees per year. However, for CBA purposes, costs and benefits to foreign companies do not have standing, and thus, the impacts are acknowledged but not included in the total monetized benefits.
• Explicit requirements for establishing and maintaining documented procedures would provide additional clarity to industry, which should make compliance, and by extension inspections, more efficient.
• Supplier information would allow for more targeted and efficient compliance and enforcement actions by Health Canada.

Negative impacts

• Health Canada would no longer be collecting fees from some foreign distributors.
• Health Canada is expected to incur minimal costs associated with compliance promotion and updating guidance documents due to the proposed amendments.

Small business lens

Approximately 50% of MDEL holders that responded to the 2022 stakeholder survey indicated that they were a small business. It is assumed that the costs are distributed evenly across businesses; hence, of the estimated $1.68 million (PV) in costs, approximately $840,000 would be carried by small businesses.

While there are no compliance flexibilities considered specifically for small businesses, the proposed amendments to the MDR are written in a manner that minimizes costs to small businesses by being less prescriptive and more outcome-based. The proposed Regulations are not prescriptive with respect to the submission format of mandatory supplier information, allowing businesses to use existing or open-source formats to comply with this requirement. And by not dictating how MDEL holders must implement and maintain documented procedures, the proposed amendments will give businesses the flexibility to implement strategies to meet the regulations within the parameters of their capacity.

The removal of the requirement for foreign distributors to hold an MDEL would increase the pool of distributors available to small businesses, allowing them greater choice to source medical devices.

One-for-one rule

As per the Red Tape Reduction Regulations, the one-for-one rule applies, since there is an incremental increase in administrative burden on business. The proposal is considered burden in under the rule, but no regulatory titles are repealed or introduced. The assessment of administrative impacts was conducted for a period of 10 years commencing from registration. All values listed in this section are presented in 2012 dollars, discounted to 2012 at a rate of 7%.

Cost of submitting a list of medical device suppliers

The proposed amendment to require importers and distributors to provide supplier information to Health Canada represents an annualized total cost in 2012 dollars of $76,935.

This is based on an estimated 1 500 businesses in the first year that would spend nine hours to complete the task once, with an estimated average wage, in 2012 dollars, of $33.61.

After the first year, it is estimated that 240 organizations per year would apply for a new MDEL, requiring them to provide full supplier information, which would result in the new organizations spending nine hours to complete the task once, with an estimated average wage, in 2012 dollars, of $33.61. In addition, approximately 1 260 organizations are expected to update their supplier information each year and would spend approximately one and a half hours to complete the task with an estimated average wage, in 2012 dollars, of $33.61.

Risk-based approach to licensing foreign distributors

The application for an MDEL is currently considered administrative burden. Under the proposed Regulations, foreign distributors that sell solely to importers that hold an MDEL would no longer be required to hold an MDEL, which would remove administrative burden. However, the purpose of the one-for-one rule is to identify impacts on Canadian industry; therefore, these savings are not counted in the one-for-one analysis.

Regulatory cooperation and alignment

Risk-based approach to licensing foreign distributors

Adopting a risk-based approach to licensing foreign distributors would improve international alignment with jurisdictions that only require the importer to have a licence/registration to sell medical devices (e.g. United Kingdom, European Union [EU], Australia). Most foreign distributors selling into Canada are from the United States. The proposed amendment would also improve alignment with the U.S. requirement that only one registration is needed for domestic or foreign establishments under the control of the same company (i.e. no redundant registrations).

Mandatory supplier information from all MDEL holders

Canada is a unique market, as it is estimated that approximately 70% of medical devices are imported, 42.6% of which are imported from the United States.^{footnote 1} Therefore, it is important to have oversight of who supplies medical devices to Canada. This is critical, considering that only 30%^{footnote 2} of devices in the United States are internationally sourced and that the United States already has a system for tracking this information, whereas Canada does not.

The requirement for MDEL applicants and holders to maintain and submit supplier information is tailored to meet the Canadian context for the sale and importation of medical devices. Most jurisdictions require information about importers, including a list of the devices and the manufacturers from whom they import, but they do not require a list of suppliers. While the United States does not require supplier information, it maintains oversight by requiring foreign establishments to register devices that they intend to sell in the country, which provides the U.S. Food and Drug Administration (U.S. FDA) with information on foreign distributors. Now that foreign distributors would be exempt from MDEL requirements, Health Canada aims to have similar oversight without introducing an overly burdensome registration scheme.

In addition, by requiring MDEL applicants and holders to submit and maintain supplier information, Canada would be adopting guiding principles recommended by the World Health Organization (WHO). The WHO recommends that regulatory authorities make available information on the registration of establishments and the listing of medical devices so that users can determine the identity and location of manufacturers, distributors, exporters, and importers.

Therefore, the current regulatory proposal would align Canada with the United States by allowing Health Canada to have better insight into the foreign supply chain and would enhance transparency, in line with WHO best practices.

Documented procedures

All MDEL holders are currently required to establish, implement, and maintain documented procedures for safety management activities. MDEL holders comprise Class I medical device manufacturers, as well as importers and distributors of all classes of medical devices. Health Canada’s current practices align with the WHO’s recommendation for manufacturers, importers, and distributors to have procedures and records in place to manage health and safety incidents. Canada is a net importer of medical devices; therefore, requirements imposed on importers and distributors are critical in proactively mitigating risks to health and safety and filling gaps where direct oversight of manufacturers is limited. Australia and Brazil were examined as comparable jurisdictions, since, like Canada, they are net importers of medical devices. The U.S. framework was also examined, given its role as a major exporter of medical devices to Canada.

Australia, which has a similar medical device market to Canada, has oversight of importers and distributors via the Australian Code of Good Wholesaling Practice for Medicines in Schedules 2, 3, 4 and 8 (the Code). Manufacturers, importers, wholesalers, and distributors are expected to have established and put in place procedures with respect to complaint handling, recalls, handling, etc., and to maintain them. While the Code is not legislation, compliance with it may be mandatory in the states and territories of Australia.

The proposed amendments to make requirements for documented procedures explicit align with Brazil’s Resolution RDC 665/2022, which requires manufacturers, distributors, and importers to establish and maintain procedures for storage and handling, complaint handling, distribution records, recalls, and incident reporting.

The U.S. FDA’s Code of Federal Regulations (21 CFR 803.17) requires device user facilities (e.g. hospitals, diagnostic facilities), importers, and manufacturers to develop, implement, and maintain written procedures for medical device incident reporting. The proposal partially aligns with the U.S. requirement, since importers and manufacturers must establish, implement, and maintain written procedures for medical device incident reporting. In Canada, health care facilities are exempt from holding an MDEL; therefore, these facilities are not required to establish, implement and maintain documented procedures.

The proposed amendments for documented procedures align in principle with International Organization for Standardization (ISO) standards to minimize compliance burden for Class II–IV device manufacturers. Class II–IV device manufacturers are already required to establish, implement, and maintain documented procedures as part of their QMS certification under ISO 13485:2016. Class II–IV device manufacturers would not need to modify their QMS to meet the proposed amendments, as the QMS already captures the activities.

International obligations

This proposal is not associated with the ratification of any international obligations. Removing the licensing requirement for foreign distributors would deliver on current international priorities to reduce technical barriers to trade while maintaining an appropriate level of safety oversight.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment (SEEA), a preliminary scan concluded that a SEEA is not required.

Gender-based analysis plus

These proposed amendments are expected to broadly benefit the health of all people in Canada who use, or may use, medical devices. The proposed amendments are not expected to negatively impact people in Canada based on their gender, race, culture, language, age, or other personal or group characteristics.

Reducing barriers on the importation of medical devices

All people in Canada would benefit from having their supply of medical devices secured, but some communities in Canada are more affected by medical device shortages than others. For example, in the early waves of the COVID-19 pandemic, medical device shortages were more acute in Northern and Indigenous communities. Immigrants and visible minority community members were also disproportionately represented in sectors that faced shortages of personal protective equipment and greater exposure to COVID-19, including frontline and service workers.

While the proposal to remove the redundancies in foreign distributor licensing is not intended to target issues around supply or shortages, removing administrative burden by way of risk-based licensing could facilitate access to medical devices for people in Canada, as importers would no longer need to seek out distributors that already hold an MDEL.

Enhanced oversight over medical devices

The severity and frequency of health risks associated with medical devices varies based on several biological and physical factors, such as age and sex, as well as race and gender biases in research design, product development, diagnosis, and treatment. The burden of illness or injury does not fall equally on people in Canada and disproportionately affects vulnerable populations who face greater health risks and have fewer resources to maintain and improve their health, such as racialized and Indigenous peoples, and people with lower socio-economic status. Other groups, such as seniors and people with disabilities, also use therapeutic products more frequently than other populations.

Evidence suggests that certain populations may be at greater risk of adverse reactions to medical devices. In Canada and abroad over the last 60 years, several medical devices have caused serious health problems leading to recalls or safety advisories, with a disproportionate impact on women.

The proposed amendments to request supplier information from MDEL holders would improve Health Canada’s ability to efficiently identify persons selling into and within Canada and allow for more targeted and efficient compliance and enforcement actions. This would support traceability when health and safety risks related to the import and distribution of medical devices in Canada arise.

Enhanced oversight over medical devices would also be achieved by making the requirements to establish, implement, and maintain documented procedures for safety management activities more explicit. The proposed amendments would provide certainty to regulated parties, pushing industry towards adopting more streamlined processes to manage risk and thereby reducing exposure to defective products once they are on the market.

Overall, these proposed amendments would benefit women, seniors, neonates, Indigenous peoples, and people with disabilities and health conditions to a greater extent than the general population, given their more prevalent exposure to medical devices.

Implementation, compliance and enforcement, and service standards

Implementation

Implementation activities, such as the training of staff, the development of standard operating procedures, and the updating of forms, internal databases, and the Department’s website, would be needed to support these amendments. Updated guidance documents and any corresponding templates and forms created by the Department would be available to aid regulated parties in coming into compliance before the need of any compliance and enforcement actions.

Compliance and enforcement

Compliance and enforcement of the proposed Regulations would be in accordance with a risk-based approach, aligned with existing departmental policies, including compliance promotion and monitoring and enforcement activities. Health Canada employs a wide range of compliance and enforcement actions and tools. The actions, tools and level of intervention used are dependent on the situation, context, and risk to health. Some actions and tools are designed to help regulated parties understand their responsibilities under the law (e.g. compliance promotion), while other actions and tools are designed to induce compliance with the law. When necessary, enforcement actions are used to address non-compliance with the law. This could result in the Department taking compliance and enforcement action in accordance with POL-0001.

Service standards

Health Canada does not anticipate a change in service standards associated with an MDEL as a result of the proposed amendments.

MDEL applications still in queue when the proposed amendments come into force (i.e. no decision has been made to grant the licence) would be required to submit supplier information before a licence would be issued. The proposed amendments to the MDR would permit the solicitation of supplier information under the Pause-the-clock policy, where MDEL applications, which have a 120-day performance standard, can be paused to solicit missing information.

Contact

Jillian Andrews
Acting Associate Director
Compliance Policy and Regulatory Affairs Division
Policy and Regulatory Strategies Directorate
Regulatory Operations and Enforcement Branch
Health Canada
Address locator: 1907A
200 Eglantine Driveway, 7th Floor
Ottawa, Ontario
K1A 0K9

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council proposes to make the annexed Regulations Amending the Medical Devices Regulations (Establishment Licences) under subsection 30(1)^{footnote a} of the Food and Drugs Act ^{footnote b}.

Interested persons may make representations concerning the proposed Regulations within 70 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website but if they use email, mail or any other means, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Jillian Andrews, Acting Associate Director, Compliance Policy and Regulatory Affairs Division, Policy and Regulatory Strategies Directorate, Regulatory Operations and Enforcement Branch, Health Canada, Address Locator: 1907A, 200 Eglantine Driveway, 7th Floor, Tunney’s Pasture, Ottawa, Ontario K1A 0K9 (email: prsd-questionsdspr@hc-sc.gc.ca).

Ottawa, October 31, 2025

Janna Rinaldi
Acting Assistant Clerk of the Privy Council

Regulations Amending the Medical Devices Regulations (Establishment Licences)

Amendments

1 Subsection 44(4) of the Medical Devices Regulations ^{footnote 3} is replaced by the following:

(4) Subsection (3) does not apply to

• (a) a person who imports a Class I medical device from the manufacturer of that device and who holds an establishment licence;
• (b) a person who imports a Class II, III, or IV medical device from the manufacturer of that device; or
• (c) a person who imports any medical device from a person other than the manufacturer of that device and who holds an establishment licence.

2 (1) Paragraph 45(e) of the Regulations is repealed.

(2) Section 45 of the Regulations is amended by adding the following after paragraph (f):

• (f.1) the name and address of any person, other than the manufacturer, who sells a medical device to the establishment for the purposes of importation or distribution;
• (f.2) for each person referred to in paragraph (f.1), other than the manufacturer, the classes of the devices that are being imported or distributed; and

(3) Paragraphs 45(g) to (i) of the Regulations are repealed.

(4) Paragraph 45(j) of the Regulations is replaced by the following:

• (j) the address of each building where the procedures described in any of sections 52, 58, 58.1 and subsections 59(3) and (4) and 61.2(4) are in place.

3 Subsection 46.1(1) of the Regulations is replaced by the following:

46.1 (1) The holder of an establishment licence that is not suspended must submit an application for the review of their licence to the Minister before April 1 of each year and include with it the information and documents referred to in section 45, including any updates to the information or documents, as the case may be.

4 Section 52 of the Regulations is amended by adding the following after subsection (2):

(3) The manufacturer, importer and distributor of a medical device must each establish, implement and maintain documented procedures for maintaining the distribution records.

5 The portion of section 58 of the Regulations before paragraph (a) is replaced by the following:

58 The manufacturer, importer and distributor of a medical device must each establish, implement and maintain documented procedures that enable them to carry out

6 The Regulations are amended by adding the following after section 58:

58.1 The manufacturer, importer and distributor of a Class II, III or IV medical device must each establish, implement and maintain documented procedures for, as applicable, handling, storing, delivering, installing and servicing the device and taking corrective action in respect of it.

7 Section 59 of the Regulations is amended by adding the following after subsection (2):

(3) The manufacturer and importer of a Class I medical device must each establish, implement and maintain documented procedures for making any preliminary and final reports referred to in subsections (1) and (1.1).

(4) The manufacturer and importer of a Class II, III or IV medical device must each establish, implement and maintain documented procedures for making any preliminary and final reports referred to in subsection (1).

8 Section 61.2 of the Regulations is amended by adding the following after subsection (3):

(4) The holder of a medical device licence and the importer of a Class II, III or IV medical device must each establish, implement and maintain documented procedures that enable the effective and timely provision of information referred to in subsection (2).

Transitional Provision

9 (1) Unless the context requires otherwise, the words and expressions used in this section have the same meaning as in the Medical Devices Regulations.

(2) A person who has submitted an application for an establishment licence under section 45 of the Medical Devices Regulations, as it read before the day on which these Regulations come into force, and in respect of which no decision has been made before that day must not be issued the licence unless, by that day and in the form established by the Minister, the person provides the Minister with the information referred to in paragraphs 45(f.1) and (f.2) of those Regulations, as amended by these Regulations.

Coming into Force

10 These Regulations come into force on the 180th day after the day on which they are registered.

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