The regulatory agency made the remark in a statement in which it reported having found mould in what should have been a sterile manufacturing area in the building where ImmuCyst is made.
A spokesperson said Sanofi has decided to halt production and repair the building. That work will begin shortly.
The Toronto plant is the only one within the Sanofi network that makes ImmuCyst.
The contamination problem, which stems from flooding that occurred last October, has also knocked out Canada's only source of tuberculosis vaccine.
"We don't anticipate BCG back on the market until the end of 2013," Nancy Simpson said in an email.
BCG stands for Bacille Calmette-Guerin. It is a live but weakened strain of Mycobacterium bovis, the bacterium that causes tuberculosis in cows. It is related to the bacterium that causes TB in people and is used in the production of tuberculosis vaccine. (BCG is named after Albert Calmette and Camille Guerin who developed the live-bacteria strain in the early 1900s.)
The bacterium is also used as a therapy for bladder cancer.
Last month Health Canada announced that Sanofi was recalling all existing vials of its tuberculosis vaccine because of concerns it might have been contaminated in the production process.
Sanofi's BCG vaccine is the only one currently licensed for use in Canada, and the move left authorities scrambling to find an alternative to the Sanofi product.
The search has not yet borne fruit.
The Public Health Agency of Canada, which is taking the lead on finding an alternative source of vaccine, said Wednesday that it and Health Canada are using all the tools at their disposal to secure a safe replacement.
When Sanofi's TB vaccine was recalled, Health Canada said it would allow the company to continue to distribute the bladder cancer drug, even though it was produced in the affected building.
And on Wednesday, the agency said it was still willing to let the company release supplies of ImmuCyst, though it said each lot would have to undergo safety testing before being shipped.
"After conducting a health risk assessment, Health Canada believes that the benefits of the ImmuCyst (bladder cancer) product continue to outweigh any risks," the department said in an emailed response to questions.
"Undistributed lots of ImmuCyst will be made available in Canada if they pass a quality test."
Health Canada has asked Sanofi to advise Canadian doctors of the situation. And it suggested that patients who have concerns about taking the medication should speak with their health-care provider.
Health Canada said it will consult with international regulatory counterparts about the ImmuCyst situation and is working with the company to expedite a resolution of the problems at the plant.