With the recent coming into force of the Canada Consumer Product Safety Act (the "CCPSA") on June 20, 2011, the Canadian product safety landscape has changed. The introduction of the CCPSA, has brought Canada's consumer product legislation more in line with that of its closest trading partners including the United States.
The stated purpose of the CCPSA is to protect the public by addressing or preventing dangers to human health or safety posed by consumer products. Consumer Products are broadly defined in the CCPSA to mean "a 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 ("Consumer Products"). The CCPSA applies to all Consumer Products save and except those that are governed by other product safety legislation and which are expressly exempted from the ambit of the CCPSA (i.e. explosives, cosmetics, drugs, pest control products, etc.).
The most significant features of the CCPSA are the general prohibitions, the requirements to prepare and maintain documents, and the reporting obligations imposed on manufacturers, importers and retailers of Consumer Products in Canada.
(i) Specific Prohibition
The CCPSA prohibits the manufacture, import, sale or advertising of enumerated consumer products which have been specifically determined to pose a danger to human health or safety. The specified prohibited Consumer Products are listed on a schedule which forms part of the CCPSA. Presumably, this list of specific prohibited Consumer Products will be expanded over time as more and more Consumer Products are determined to pose a danger to human health and safety.
(ii) General Prohibition
In addition to prohibiting specific Consumer Products, the CCPSA contains a general prohibition precluding a manufacturer or importer of Consumer Products from manufacturing, importing, selling or advertising a Consumer Product that is a danger to human health and safety.
The CCPSA provides that a danger to human health and safety is "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 have an adverse effect on the individual's health --including an injury--whether or not the death or adverse effect occurs immediately after the exposure to a consumer product that may reasonably be expected to have a chronic adverse effect on human health."
In contrast to the absolute liability placed on manufacturers and importers of Consumer Products, retailers and advertisers are prohibited by the CCPSA from selling or advertising a Consumer Product which is known by them to pose a danger to human health or safety. Accordingly, unlike in the case of manufacturers and importers, there is an element of knowledge required by a retailer or advertiser before it will be liable for a breach of the general prohibition against the sale or advertising of a Consumer Product which poses a danger to human health or safety.
(iii) Misleading claim labeling and packaging prohibition
The third prohibition under the CCPSA relates to packages and labels. In this regard, the CCPSA prohibits any individual or corporation from packaging or labeling a Consumer Product:
a. in a manner--including one that is false, misleading or deceptive--that may reasonably be expected to create an erroneous impression regarding the fact that it is not a danger to human health or safety; or
b. in a manner that is false, misleading or deceptive regarding its certification related to its safety or its compliance with a safety standard.
Again, retailers and advertisers are prohibited from selling or advertising a Consumer Product that they know is advertised, packaged or labeled in a manner that contravenes the foregoing packaging and labeling prohibitions. It is not presently clear from the language of the CCPSA whether these labeling and packaging requirements would apply equally to those consumer products which are otherwise expressly excluded from the ambit of the CCPSA. However, the better view appears to be that this misleading labeling and packaging prohibition would apply equally to those Consumer Products which are governed by other legislation (i.e. explosives, cosmetics, drugs, pest control products, etc.).
Preparing and Maintaining Documents
In order to achieve its goal and to assist Health Canada in dealing with Consumer Products which are discovered to pose a threat to human health and safety, the CCPSA mandates the preparation and maintenance of documents (the "Documents") as follows:
a. in the case of retailers -- the name and address of the individual or corporation from whom the retailer obtained the Consumer Product, and the location where and period during which the Consumer Product was sold by the retailer;
b. in the case of any other individual or corporation, the name and address of the person from whom the Consumer Product was obtained and/or to whom the Consumer Product was sold, as the case may be.
The Documents are required to be maintained for a period expiring six (6) years after the end of the year to which they relate.
Reporting Requirements in the Event of an Incident
The CCPSA requires that an individual or corporation that manufactures, imports or sells a Consumer Product in Canada for commercial purposes shall provide the Minister of Health and, where applicable, the individual or corporation from whom the Consumer Product was received, with all of the information in their control regarding any "incident" related to the Consumer Product within two (2) days after the day on which they become aware of the incident. In the case of a Consumer Product, an "incident" means:
a. an occurrence in Canada, or elsewhere that resulted or may reasonably have been expected to result in an individual's death or in serious adverse effects on their health, including a serious injury;
b. a defect or characteristic that may reasonably be expected to result in an individual's death or in serious adverse effects on their health, including a serious injury;
c. incorrect or insufficient information on a label or in instructions--or lack of a label or instructions--or the lack of a label or instructions--that may reasonably be expected to result in an individual's death or in serious adverse effects on their health, including a serious injury; or
d. a recall or measure that is initiated for human health or safety reasons by
(i) a foreign entity;
(ii) a provincial government;
(iii) a public body that is established under an Act of a provincial legislature; ( iv) an aboriginal government;
(v) an institution of an entity referred to in (ii) to (iv).
In addition, the manufacturer of a Consumer Product, or where the manufacturer carries on business outside of Canada, the importer, is required to provide the Minister of Health with a written report within 10 days after the date upon which they became aware of the Incident. The report will set out information about the Incident, any products that they manufacture or import, as the case may be, that to their knowledge could be involved in a similar incident and any measures they propose be taken with respect to those Consumer Products.
In light of these recent changes to the consumer protection landscape, businesses--whether manufacturers, importers or retailers--now have to ensure that they have the infrastructure and capability to comply with the CCPSA. In doing so, those doing business in Canada must have procedures in place to ensure that they can be aware of, assess, document and report Incidents. To accomplish this, employees must be trained to:
- Receive information and process documents following an event involving a Consumer Product
- Assess events and determine whether those events qualify as Incidents and thereby trigger the reporting obligations;
- Investigate Incidents; and
- Meet reporting deadlines
The Anticipated Effect of the CCPSA on Product Liability Litigation in Canada
While it is too soon to know for certain what effect the CCPSA will have on product liability cases, it would seem likely that the prohibitions under the CCPSA will result in more recalls and, in turn, more class action lawsuits. Meanwhile, the record keeping and incident reporting obligations will result in the public (and potential litigants and class action lawyers) having greater access to information relating to Consumer Products that have been found to pose a threat to human health and safety, the incidents relating to Consumer Products, and the actions or omissions of the businesses which manufacture, import, sell or advertise these Consumer Products.
It is, therefore, imperative that businesses which manufacture, import, sell or advertise Consumer Products in Canada fully understand the scope of the CCPSA, and that they be sure to implement systems to enable them to meet the specific obligations imposed upon them by the CCPSA.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.