Canada: The Canada Consumer Product Safety Act: A Review

Last Updated: February 14 2011
Article by John F. Blakney and Margot E. Patterson

Introduction

Bill C‐36, An Act respecting the safety of consumer products (Canada Consumer Product Safety Act ("CCPSA"))1, which received Royal Assent on December 15, 2010, will substantially revise the existing regulatory scheme for "consumer products" and bring the range of regulatory tracking and enforcement powers to par with other comprehensive federal health and safety regulation statutes such as the Canadian Environmental Protection Act and the Pest Control Products Act.2

This article provides a review of most significant elements of the CCPSA which include: (1) a mandatory reporting scheme for "incidents," (2) general recall powers to be exercised by the Minister of Health, (3) inspector powers to issue conduct orders, and (4) new private sector risk information monitoring and record keeping obligations to facilitate product tracking through the supply chain. These obligations include obtaining and maintaining information on foreign manufacturers, and providing inspectors with significantly broader entry and inspection powers.

Broad Coverage

The CCPSA broadens the powers of inspectors with respect to "consumer products," which are broadly defined as "product, including its components, parts or accessories, that may reasonably be expected to be obtained by an individual to be used for non‐commercial purposes, including for domestic, recreational and sports purposes, and includes its packaging."(emphasis added).3

This definition, while elegant, is potentially broader than the definition in the United States Consumer Product Safety Act which defines consumer product as:

any article, or component part thereof, produced or distributed:
  1. for sale to a consumer for use in or around a permanent or temporary household or residence, a school, in recreation, or otherwise, or
  2. for the personal use, consumption or enjoyment of a consumer in or around a permanent or temporary household or residence, a school, in recreation, or otherwise...4

Notably, this definition focuses on the intention of the consumer in purchasing and using a product, and not on the intention of the manufacturer or the manner in which a product is distributed. Many products designed or marketed for "trade" purposes but capable of being used by consumers will therefore be subject to the Act. Consider, for example, the range of construction tools and equipment typically made available for consumer rental for DIY projects including excavation and landscaping products at "builders' supply" businesses. A reasonably cautious approach to such potentially hazardous products would assume that they qualify as "consumer products" unless consumers are prohibited from purchasing or renting them.

The Act then establishes a broad general prohibition against the manufacture, import, advertisement or sale of any consumer product that poses a danger to human health or safety, is subject to a recall under the Act, or is subject to administrative orders restricting commerce made under the Act. As with its predecessor legislation, the Hazardous Product Act,5 certain products will be expressly prohibited, or prohibited unless they satisfy safety standards established by regulations (such as toys, jewellery, household chemicals, and most recently products containing lead in children's products or that may come into contact with the mouth).

Representations and packaging that misrepresent consumer products as not being a danger to human health and safety are also prohibited.

Expanded Inspector and Ministerial Powers

The CCPSA amends and expands on the entry and inspection powers presently set out in the Hazardous Products Act.

The entry and inspection powers set out in Bill C‐ 36 include the power of entry "for the purposes of verifying compliance or preventing noncompliance with [the CCPSA] or the regulations,"6 at any reasonable time to enter a place, including a conveyance, in which the inspector believes on "reasonable grounds" that a consumer product is manufactured, imported, packaged, stored, advertised, sold, labelled, tested or transported, or a document relating to the administration of the CCPSA or the regulations is located.7 Where the place is a dwelling‐house, the inspector must have the consent of the occupant or a warrant.8

Upon entry, an inspector will have broad search and seizure powers: an inspector may examine, test or sample anything; open a receptacle or package; examine, copy or extract a document, and use any computer or other device to do so; seize or detain an article or a conveyance to which the Act or regulations apply; direct the owner or the person having possession to move a conveyance; take photographs or make recordings or sketches; direct the owner or person in charge of the place or a person who conducts an activity governed by the Act to establish his or her identity, or to stop or start the activity; and may restrict the movement of an "article to which this Act or the regulations apply."9

In addition to these entry and search and seizure powers, the CCPSA empowers an inspector to submit any samples taken to an analyst for testing or examination.10

In the two previous versions of the CCPSA, inspectors also had the power to order a recall where there are reasonable grounds for believing that "a consumer product is a danger to human health or safety."11 This power is now reserved to the Minister of Health.12 If the Minister believes on reasonable grounds that a consumer product is a danger to human health or safety, he or she 9 Ss.. 23. An "article to which this Act or the regulations apply" is defined as (a) consumer product; (b) anything used in the manufacturing, importation, packaging, storing, advertising, selling, labelling, testing or transportation of a consumer product; or (c) a document that is related to any of those activities or a consumer product (Ibid., clause 2). may order a recall. Recall orders can be made to consumer product manufacturers, importers or sellers. The order must be in writing and state the reasons for the recall and the time and manner in which the recall is to be carried out. The recall power is significant as under the Hazardous Products Act there is no mandatory recall power and all recalls must be done on a voluntary or negotiated basis.

Further, in certain circumstances, including where the Minister believes on reasonable grounds that there is a contravention of the CCPSA, the Minister will be able to order a manufacturer to take certain measures including: (a) "stopping the manufacturing, importation, packaging, storing, advertising, selling, labelling, testing or transportation of the consumer product or causing any of those activities to be stopped", and (b) "any measure that the Minister considers necessary to remedy non‐compliance with this Act or the regulations, including any measure that relates to the product that the Minister considers necessary in order for the product to meet the requirements of the regulation, or to address or prevent a danger to human health or safety that the product poses".13 Under the two previous versions of the legislation, this power was left to the inspector.14

The CCPSA also retains the review procedure for orders under clauses 30 and 31, but now applies it to the Minister's orders rather than inspector's orders. A person can apply in writing to have the Minister's order reviewed by a "review officer" designated by the Minister. The review officer may confirm, amend, terminate or cancel the order. Upon termination of the review, the review officer must provide written notice of the decision (along with reasons) to the applicant.15

The CCPSA also requires that the owner and every person found in the place under inspection give an inspector "carrying out their functions all reasonable assistance and provide them with any information that they may reasonably require."16 This is a common regulatory power of inspection and is present in the Hazardous Products Act.17 Furthermore, the CCPSA provides, "[n]o person shall knowingly obstruct, hinder or make a false or misleading statement either orally or in writing to an inspector who is carrying out their functions."18 Again, this is a common obligation in regulatory statutes that is also present in the Hazardous Products Act.19

Tracking Measures – Mandatory Record Keeping

In order to provide Health Canada with adequate supply chain information to support regulatory action, the Act requires any person who manufactures, imports, advertises, sells or tests a consumer product to prepare and maintain certain documents for six years or any other prescribed period. For retailers, this covers the name and address of the person from whom they acquire a product, and the location where, and the period during which they sold the product. For all other persons, the documents must cover the name and address of the person from whom they obtained the product or to whom they sold it. Limited exemptions will apply to second hand stores and charitable donations.

Regulations may specify time frames for importers to provide all such documents to Health Canada. The objective is to provide Health Canada with supply chain information to facilitate recalls, identify persons who have violated the prohibitions of the Act, and to generate a body of knowledge in respect of likely future sources of dangerous consumer products.

Similar record keeping and tracking measures have been in place in Canada for foods, drugs, and agriculture imports for some time.

Mandatory Incident Reporting

Under the CCPSA, a consumer product manufacturer, importer or seller must submit a series of reports when an "incident" occurs. This provision has remained substantially the same through all iterations of the Bill.20 "Incident" is defined in the act as one of four possible things:

  • an occurrence in Canada or elsewhere that resulted or may reasonably have expected to result in an individual's death or in serious adverse effects on their health;
  • a defect or characteristic that resulted or may reasonably have expected to result in an individual's death or in serious adverse effects on their health;
  • incorrect or insufficient information on a label or instructions, or lack thereof, that resulted or may reasonably have expected to result in an individual's death or in serious adverse effects on their health; or
  • a recall or measure initiated by a foreign entity, a provincial government, a provincial public body, an aboriginal government, or an institution of a provincial government, public body or aboriginal government.21

When such an incident occurs, the manufacturer, importer or seller must provide the Minister and, if applicable, the supplier with the prescribed information regarding the incident within two days after becoming aware of it.22 Ten days later, the manufacturer, importer or seller must provide the Minister with a written report containing information about the incident, the product, and any products that could be involved in a similar incident as well as measures related to be taken regarding those products.23 Under Bill C‐52, the manufacturer, importer or seller only had seven days to provide the report, but this was extended to 10 days in Bill C‐6.24 This was the only change made to the reporting provision since Bill C‐52.

Health Canada has already released a draft of its Mandatory Reporting Policy for consultation purposes (Health Canada, Consultation on the Mandatory Reporting Policy for the Proposed Canada Consumer Products Safety Act, online: http://198.103.98.28/cpsspc/ legislation/consultation/_2010ccpsa_pollcspc/ index‐eng.php.

To trigger the incident reporting requirements, a "responsible person" must become aware of the incident. A responsible person is a directing mind of the organization who, through the exercise of due diligence, should become aware of an incident. To determine if an individual is a directing mind, Health Canada will look at factors such as the size and decision‐making structure in the organization, that there may be multiple responsible persons in an organization and the nature of the information available to the organization. This interpretation suggests that those who are not "responsible persons" may not be eligible to trigger the reporting requirements such that, for example, a part time employee accepting defective product returns may not create the obligation to report the defect. The policy, therefore, goes some ways to limiting manufacturer, importer and seller liability under the CCPSA.

The draft Mandatory Reporting Policy also provides some guidance on what constitutes an incident under section 14 of the CCPSA. For instance, Health Canada considers serious adverse health effects to include injuries necessitating hospitalization or the use of emergency services, non‐fatal threats to breathing incidents, and fire or other property damages that could have resulted in death or serious adverse effect on health. For defects or characteristics that could have reasonably resulted in death or serious adverse health effects, Health Canada considers that noncompliance with regulations, certification requirements or health and safety standards, manufacturing or production errors or flaws in product designs trigger the reporting requirement. For this type of non‐compliance and for incorrect or insufficient information on labels, an injury does not have to occur to engage the obligation to report.

Lastly, Health Canada has provided its expectations for what and how to report when an incident occurs. Health Canada will require manufactures, importers and suppliers to fill out the Industry Form for Mandatory Reporting, which uses the same format as the current Consumer Incident Reporting Form but tailors the information from the manufacturer, importer and supplier perspective. Within the two day reporting time period, Health Canada will require the manufacturer, importer or supplier to fill out Parts 1 (information about the report), 2 (information about who is reporting the incident), 3 (information about the incident), 4 (information about the product), and 6 (information about the source of the product). For Part 3, the manufacturer, importer or supplier need only provide as much information as is currently available for the information about the incident.

Within 10 days, a complete form will have to be submitted. The further information would include information about the manufacturer from the product label or package (part 5), information about corrective measures (part 7), and any attachments of pictures or documents to supplement the report (part 8). If further analysis or information gathering is required, the timelines for doing so should be indicated in the report and the Minister may specify a greater period to make the report.

The Health Canada Mandatory Reporting Policy goes some way to making the clause 14 reporting requirements clear and workable and it remains to be seen whether industry consultation will bring changes to the draft policy.

Mandatory Testing

Unlike certain product regulation statutes in other countries, the CCPSA will not require regulatory compliance or general safety tests to be conducted as a prerequisite for Canadian sales. However, it will continue to be prudent for Canadian suppliers of products subject to an express regulatory safety standard (such as children's toys) to require proof of compliance with the standard as a condition of the supply contract.

In light of the broadened scope and administrative powers under the CCPSA, it will likely also be prudent for Canadian suppliers of potentially unsafe products to obtain objective assurance that the product does not contain any hidden safety risks and that fully developed consumer instructions are prepared where the product necessarily presents some operating risks, such as home electricity products and kitchen appliances. It should be noted that statements in operating manuals arguably constitute representations that would be subject to the new safety‐specific misrepresentations prohibition of the CCPSA.

The CCPSA contains a new general power of the Minister to order, by written notice, any person who manufactures or imports a consumer product for commercial purposes to conduct tests or studies on the product, to provide the Minister with the information that he or she considers necessary to verify compliance, or to prevent noncompliance with the act or the regulations.

Ministerial orders may also extend to complying information relevant to ascertaining compliance and to providing other documents and test results. This potential obligation to conduct specific tests for the Minister is separate from the ongoing general obligation to advise the Minister of all information relevant to an "incident", as discussed above, which can comprehend existing product test information wherever generated by the "person" (including its international affiliates).

More extensive product testing before Canadian sales and more carefully drafted consumer use instructions will probably be elements of future tort liability mitigation strategies, given that a breach of the Act's prohibitions will often form a basis for a tort chain. Retailers and other supply chain members downstream from the importer and manufacturer can be expected to require such information in the future in their purchasing agreements so they can demonstrate their own due diligence for civil liability purposes.

Implications for Advertisers

As noted in this article, the CCPSA will have various repercussions specifically for advertisers. As under the Hazardous Products Act, "advertisement" is defined broadly to include "any representation by any means for the purpose of promoting directly or indirectly the sale of a consumer product". Under the Act, however, advertising has a more prominent place among the prohibitions. In particular:

  • " Clause 8 prohibits advertising any consumer product that the advertiser knows is a danger to human health or safety, or is subject to recall orders, a voluntary recall, and an order to take measures or review orders.
  • " Clauses 9 and 10 prohibit making false, misleading or deceptive claims on a consumer product's package or label, or when advertising products, in a manner
    • that may reasonably lead to a wrong impression about the product's safety; or
    • o that misrepresents its safety certification or compliance with safety standards or regulations.

These and related provisions in the CCPSA significantly raise the standard of diligence on the part of advertisers. They provide a further reason why it is important for risk managers to review advertisements, or in fact any promotional material included in instructions or other product information, when there is a potential product safety risk. More to the point, the CCPSA creates potential offences of omission, arising, for example, from failure to provide information regarding the safe use or operation of a consumer product. Advertisers will need to carefully review those instances where product information and product promotion intersect, for example, in product packaging and inserts, instructions, and other guidelines for use.

As noted earlier, it will also be incumbent upon all those interacting with the product, including advertisers, to maintain adequate information and records to facilitate product tracking through the supply chain. This can extend to allowing inspectors to exercise broadened entry and inspection powers.

Because sections 8, 9 and 10 of the CCPSA concern "false, misleading or deceptive claims" by the advertiser, and the "impressions" of the consumer, it can be expected that the interpretation of the prohibitions will be guided by competition law, where these concepts are fairly well understood. Their particular application under the CCPSA in the circumstances of product safety, however, are not yet clear, making the advertiser's due diligence in this area especially important.

Operation with Existing Legislation

The sheer scope of products covered by the CCPSA raises some concerns about how the legislation will operate with existing federal legislation. As noted above, the CCPSA covers every product, including its components and packaging, that may reasonably be expected to be obtained by an individual for non‐commercial purposes.25 Only two products listed in clause 4 and the 20 types of products in Schedule 1 of the CCPSA are excluded.26 Those products are essentially ones covered by other federal legislation, such as cosmetics (covered by the Food and Drugs Act) or pest control products (covered by the Pest Control Products Act).27 Outside of these 22 types of products, the range of application is limitless, covering anything from consumer electronics, to furniture, to clothing.

Virtually every Canadian manufacturer, importer or supplier will be subject to the obligations and liabilities in the CCPSA and all will be subject to the discretionary powers of Ministers and inspectors. Health Canada and its inspectors will have to be versed in many consumer product areas to be able to adequately exercise their powers. This is in stark comparison with existing consumer protection legislation, which typically only grants such far reaching powers in very defined circumstances. For instance, inspectors have similar powers under the Pest Control Products Act as they do under the CCPSA. However, the Pest Control Products Act is targeted legislation dealing with a specialized area of consumer products: those which have as their object the elimination of injurious, noxious or troublesome animals, plants and organisms.28 Or compare with even broader legislation, the Canadian Environmental Protection Act, which isstill nevertheless restricted to releases of toxic substances or pollution into the environment.29

Another problem with such a wide scope of application is that the legislation may create situations of overlap with provincial legislation governing consumer safety. For example, in Ontario, a manufacturer, wholesaler, importer, product distributor or retailer of electrical products or devices has reporting obligations under the Electricity Act, 1998 Product Safety Regulations.30 Such persons must report to the Electrical Safety Authority as soon as possible upon the discovery of: any serious electrical incident or accident; or any defect in the design, construction or functioning of an electrical product or device that affects or is likely to affect the safety of any person or cause damage to property.31 This broad obligation essentially covers any situation where a consumer or his or her property becomes damaged by an electrical product, whether or not electricity was involved. For example, defective mounting brackets on a television which could cause injury by dislodging and falling on a consumer would be caught by this provision since it is a defect in the construction of the electrical product that is likely to affect the safety of a person or cause damage to property.

The boundaries between the CCPSA and existing legislation such as the Ontario Product Safety Regulations will have to be established. One possibility would be imposing dual compliance on individuals, which would bring with it the possibility of dual penal sanctions under the respective legislative regimes. Such double aspect is not uncommon in Canadian regulation and courts have considered this to be a hallmark of Canada's constitutional structure.32 Another is the possibility that the Federal CCPSA will completely displace any provincial regulations by operation of the doctrine of paramountcy. The doctrine of paramountcy states that where there are inconsistent or conflicting federal and provincial laws, the federal law prevails.33 The problem with this scenario is that there must be clear conflict in order for paramountcy to apply, such that compliance with one law would mean noncompliance with the other.34 A final possibility is that through dialogue, federal and provincial governments create some sort of cooperative scheme whereby compliance with one of the reporting requirements satisfies the reporting requirements of the other.

In any event, because of the sheer breadth of the CCPSA's subject matter coverage, it remains to be seen how it will be implemented in such a way that is manageable for both manufacturers and sellers of consumer products, and for the government itself.

Conclusion Limits on Regulatory Powers

The CCPSA will broaden the scope of entry and inspection powers and conduct order powers available to the inspectors or the Minister. Nevertheless, the exercise of these powers is limited by Charter rights and general principles of administrative law. The legislation establishes a number of common restraints on unilateral inspector and Ministerial action, for example, requiring a warrant for entry into a dwelling house, requiring that certain inspector actions only be taken on "reasonable grounds." The Act should also ensure some protection against unilateral Ministerial action by providing for a form of internal review.

However, depending on the particular facts of any given situation, additional restraints on the unilateral exercise of inspectors' and Minister's powers may still apply. Where, for example, an inspection has become an investigation, section 7 (in the case of an individual) and section 8 (in the case of an individual or a corporation) of the Charter would be triggered and, consequently, inspectors may no longer rely on their entry and inspection powers.

Furthermore, inspectors and the Minister are bound to some level of procedural fairness, particularly in the exercise of conduct order powers. The level of protection afforded to the subject of inspector or Minister actions will vary depending on the particular facts of any given situation. Where the inspector action or order is particularly intrusive, e.g., conduct order powers, and where the risk to human health and safety is neither imminent nor serious, the restrictions on inspector or Minister power will be relatively high. Conversely, where the impact of the inspector or Ministerial action or order is minimal, and where the risk to human health and safety is both serious and imminent, the reverse will likely be true.

Finally, Bill C‐36 will create a very strict and detailed reporting regime for product safety incidents. It is still unclear how this regime will be implemented in light of the scope of Bill C‐36's application and possible conflicts with provincial product safety legislation that also carry reporting requirements. Although the draft Health Canada Policy provides some guidance on what Health Canada will expect manufacturers, importers and sellers to report and how to report, it still leaves unanswered how the administrative scheme itself will be managed by Health Canada agents given the increased scope and powers given to it by Bill C‐36.

Footnotes

1 3rd sess., 40th Parl., 2010 (assented to December 15, 2010)

2 S.C. 1999, C. 33, and S.C. 2002, C. 28

3 Supra note 1, clause 2

4 15 USC s. 2052(a)(5)

5 R.S.C. 1985, c. H‐3

6 ss. 21(1).

7 Currently under the Hazardous Products Act, an inspector may only enter a place "where the inspector believes on reasonable grounds any hazardous product is manufactured, prepared, preserved, processed, packaged, sold or stored for sale, processing or packaging" (Hazardous Products Act, s.22(1).

8 Bill C‐36, supra., clause 22(1)

9 Ss.. 23. An "article to which this Act or the regulations apply" is defined as (a) consumer product; (b) anything used in the manufacturing, importation, packaging, storing, advertising, selling, labelling, testing or transportation of a consumer product; or (c) a document that is related to any of those activities or a consumer product (Ibid., clause 2).

10 Bill C‐52, An Act respecting the safety of consumer products, 2nd Sess., 39th Parl., 2010 (as passed at First Reading, June 9, 2010), clause 30 ["Bill C‐52"]; Bill C‐6, An Act respecting the safety of consumer products, 2nd Sess., 40th Parl., 2010 (as passed by the House of Commons, June 12, 2009), clause 30 ["Bill C‐6"].

11 Bill C‐52 s. 32; Bill C‐6 s. 30.

12 CCPSA ss. 31(1).

13 CCPSA s. 32.

14 Bill C‐52, supra note 10, clause 33; Bill C‐6, supra note 10, clause 31.

15 CCPSA, clause 35.

16 Ibid., clause 21(5).

17 Hazardous Products Act s.. 22(2).

18 CCPSA s. 20.

19 Hazardous Products Act s.23.

20 See Bill C‐52 clause 14; Bill C‐6 clause 14.

21 CCPSA ss. 14(1).

22 CCPSA ss.14(2).

23 CCPSA ss..14(3).

24 Bill C‐52, supra note 10, clause 14(3); Bill C‐6, supra note 10, clause 14(3).

25 CCPSA s. 2.

26CCPSA s. 4, Schedule 1.

27 CCPSA, Schedule 1.

28 See Pest Control Products Act sections. 2, 6.

29 See Canadian Environmental Protection Act, S.C. 1999, c. 33 s. 95.

30 Product Safety, O. Reg. 438/07, s. 8(1).

31 Ibid.

32 See, e.g. W.R. Lederman, "Concurrent Operation of Federal and Provincial Laws in Canada" (1963) 9 McGill L.J. 188 at 188.

33 Peter W. Hogg, Constitutional Law of Canada, 5th ed. (Toronto: Carswell, 2007) at 16.1 [looseleaf].

34 Ibid. at 16.3(a).

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The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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