Canada: A New Regulatory Regime For Consumer Product Safety In Canada

On January 29, 2009, the Canadian government introduced Bill C-6, the Canada Consumer Product Safety Act (the "Act"). This follows the introduction of Bill C-52 relating to the same Act in April 2008. That Bill died with the dissolution of Parliament in September 2008. Bill C-6 was introduced following the re-election of the government and its consultation with stakeholders. Before it becomes law, Bill C-6 must be reviewed by the House of Commons and the Senate. Although the Bill was introduced by a minority government, we do not believe that the Bill will face a lot of opposition.

If and when it becomes law, the Act will change significantly the regulatory regime applicable to consumer product safety in Canada. A summary of noteworthy provisions follows.

Consumer Products

The Act applies to "consumer products", defined as products designed to be used by individuals for non-commercial purposes, including their components, parts, accessories and packaging. Certain products will be exempted because they are subject to more specific legislation. These include food, drugs, controlled substances, plants, seeds, cosmetics, medical devices, motor vehicles and firearms.

Prohibited Activities

The Act will prohibit the manufacture, importation, advertising and sale (or lease) of a consumer product that:

  • is a "danger to human health or safety";
  • is the subject of a recall or "measure" ordered under the Act or of a voluntary recall because the product is a danger to human health or safety;
  • does not meet the regulatory requirements that apply to that product.

"Danger to human health or safety", a threshold phrase used throughout the Act, is defined as:

"any unreasonable hazard – existing or potential – that is posed by a consumer product during or as a result of its normal or foreseeable use and that may reasonably be expected to cause the death of an individual exposed to it or including an injury – whether or not the adverse effect occurs immediately after the exposure to the hazard, and includes any exposure to a consumer product that may reasonably be expected to have a chronic adverse effect on human health."

The Act also prohibits the packaging or labelling of a consumer product in a manner that creates an erroneous impression that the product is not a danger to human health or safety or regarding its compliance with safety standards or regulations.

The manufacture, importation, advertising or sale of certain products will be prohibited altogether. These products will be listed in a schedule to the Act which will replace the list of "Prohibited Products" under the Hazardous Products Act.

Mandatory Reporting

Upon becoming aware of an "incident", manufacturers, importers and sellers of consumer products must provide regulators with all related information within two days and manufacturers and importers must provide a more comprehensive report within seven days. "Incident" is defined as:

  • an occurrence in Canada or elsewhere;
  • a defect or characteristic; or
  • incorrect or insufficient information on a label or in instructions, or the lack of a label or instructions

that resulted or may reasonably have been or be expected to result in an individual's death or serious adverse effects on their health, including a serious injury.

"Incident" also includes a recall or other measure initiated by a foreign entity or provincial government for human health or safety reasons.

Duties Re: Documents

The Act requires that all persons who manufacture, import, advertise, sell or test a consumer product for commercial purposes maintain documents identifying from whom they obtained the product and to whom they sold it or, in the case of retailers, the location where and the period during which the product was sold.

Regulator Powers

The Act gives regulators the power to order manufacturers and importers of consumer products to conduct tests or studies on a product, to provide documents related to those tests and studies and to compile any information required to verify compliance with the Act. Inspectors will also have broad examination, testing, analysis and seizure powers.

Regulators will have the power to disclose confidential business information in relation to a consumer product in certain circumstances. The preamble to the Act emphasizes the importance of information sharing with foreign governments.

Recalls and Other Measures

Inspectors charged with the administration and enforcement of the Act will have new wide-ranging powers including the power to order a recall where they believe, on reasonable grounds, that a consumer product is a danger to human health or safety. Inspectors will also have the power to stop the manufacturing, importation, packaging, storing, advertising, selling, labelling, testing or transportation of a consumer product or to order any other measure to remedy a non-compliance with the Act.

These powers may be invoked even where there is a lack of full scientific certainty that there is a danger to human health or safety. The preamble to the Act provides that a lack of full scientific certainty is not to be used as a reason for postponing measures where the impact on human health could be serious or irreversible.

Penalties

Companies and their directors, officers and employees may be held criminally liable for contravening the Act, with criminal penalties including fines ranging from $250,000 to $5 million to "an amount in the court's discretion", and terms of imprisonment of up to five years. In addition to criminal liability, the Act creates an "administrative monetary penalty" regime for the violation of recall orders or other measures ordered by an inspector. The penalties for these violations will be specified in the regulations to the Act.

The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.

© Copyright 2009 McMillan LLP

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