Purpose and Legislative Scheme
A number of high profile consumer product safety issues have led to the enactment of new consumer product safety legislation in Canada. On June 20, 2011 the Canada Consumer Product Safety Act, S.C. 2010, c. 21 (the “Act”) came into force. Health Canada is responsible for the administration and enforcement of the Act which sets out a comprehensive consumer product safety regime. This article provides essential information about the Act for manufacturers, distributors, importers and retailers who supply consumer products in Canada.
The Act is similar to U.S. consumer product safety legislation. It is designed to protect the public by addressing or preventing dangers to health or safety posed by consumer products imported to or produced within Canada. The Act:
- Prohibits certain activities such as the manufacture, importation, advertisement and sale of unsafe consumer products.
- Provides for incident reporting, safety measures, recalls and other related matters.
- Establishes significant civil and criminal penalties for non-compliance.
The Act prohibits the manufacture, sale, importation, or advertisement of listed products or products that fail to meet regulatory requirements. Listed products have been deemed to pose a significant risk to consumers (such as baby bottles containing bisphenol A). The Act prohibits the manufacture, sale, importation, or advertisement of products that are:
- A danger to human health or safety.
- Subject to a recall order or a voluntary recall.
- Subject to a measure or order imposed under the Act that has not been complied with.
The Act prohibits misleading labelling or packaging respecting a product’s danger or safety certification.
New document and record keeping requirements include the following:
- Persons may be ordered to test products and provide test results to the Minister.
Any person who sells, manufactures, imports, advertises, or tests a consumer product for commercial purposes is responsible for preparing and maintaining documents:
- in the case of retailers, that indicate the name and address of the person from whom they obtained the product and the location where and the period during which they sold the product, and
- in the case of any other person, the name and address of the person from whom they obtained the product and to whom they sold it (as applicable).
- Documents must be retained for six years.
A person who manufactures, imports, or sells a consumer product in Canada must provide information when they are aware that an incident has occurred that is related to a consumer product that they supply in Canada. The Act defines an “incident” as:
- An occurrence in Canada or elsewhere that resulted or may reasonably have been expected to result in a death or in serious adverse health effects,
- A defect or characteristic that may reasonably be expected to result in a death or serious adverse health effects on their health,
- Incorrect or insufficient information on a label or in instructions – or the lack of a label or instructions – that may reasonably be expected to result in a death or serious adverse health effects, or
- A recall or measure that is initiated for human health or safety reasons by a foreign entity, specified government, public body or institution.
Health Canada has listed three questions which are designed to help determine whether an event is a reportable incident:
- Does the event relate to a consumer product that I sell, manufacture or import in Canada for commercial purposes (including its components or accessories or packaging)?
- Does it meet the criteria of an incident in any of paragraphs 14(1)(a) to (d) of the Act?
- Does it indicate an unreasonable hazard posed by the normal or foreseeable use of the product or the forseeable misuse of the product?
A manufacturer, importer or retailer who becomes aware of an incident must provide information to the Minister and, if applicable, the person from whom they received the product, within 2 days after the day on which they became aware of the incident. A manufacturer, importer or retailer must provide a written report to the Minister within 10 days after the day on which they become aware of the incident. The report must include information about the incident, the product, products that could be involved in a similar incident and measures that have been taken or proposed in respect of those products.
The Minister can recall a consumer product if the Minister believes, on reasonable grounds, that it poses a danger to health or safety. The Minister can also impose measures to stop the manufacturing, importing, packaging, storing, advertising, selling, labelling or transporting of the product if it is subject to a recall, or a person has not complied with the Act or a previous order. The Minister may apply for an injunction ordering a person to refrain from doing anything that would result in a commission of an offence.
The Minister may disclose personal information or confidential business information without consent in some situations, particularly where disclosure is necessary to address a serious and imminent danger.
Enforcement and Penalties
The Act is enforced by inspectors. Inspectors have broad search and seizure powers under the Act. They may enter any place or conveyance where consumer products or related documents are stored, manufactured, sold, imported, packaged, advertised, labelled, tested or transported. Consent or a warrant is not required to enter a place other than a dwelling house. Inspectors have powers to seize, photograph, open, move, test and examine items.
In general, it is an offence to contravene the Act. Criminal sentences for the most serious offences may include a fine of up to $5 million and imprisonment of up to 2 years. If a corporation commits an offence, its directors, officers, and agents are deemed to be parties to the offence and are liable to punishment. Due diligence is a defence. A person who contravenes the Minister’s order may be subject to an administrative monetary penalty (“AMPS”). Due diligence is not a defence for AMPS. The maximum penalty is $5,000 for non-profit organizations – or by any other persons for non-commercial purposes – and $25,000 in any other case.
A person may ask to enter into a compliance agreement with the Minister as an alternative to paying a civil penalty. The purpose of a compliance agreement is to ensure that a person invests in compliance and avoids future non-compliance. A compliance agreement may contain various conditions, including a requirement to give security as a compliance guarantee.
The Act creates a number of obligations for businesses dealing in consumer products. Non-compliance may lead to civil and criminal penalties. In light of these new obligations, affected businesses should take steps now to implement a compliance plan.