Bill C-6, the proposed Canada Consumer Product Safety Act, is intended to implement a regulatory scheme for the manufacture and sale of all consumer products, except for certain specific products regulated under other federal statutes, such as food, drugs and cosmetics. The Act will be administered by the Ministry of Health and Health Canada, and will affect all manufacturers, importers, and retailers of consumer products, including purveyors of second-hand goods. Charities that sell merchandise will be affected by the Act in several ways:
- Records: Retailers of consumer products will be required to maintain records for a period of 6 years of the names and addresses of their suppliers, and the locations and time period during which the products are sold. This will be problematic for retailers of second-hand items due to the nature of their supply chain.
- Disclosure of Information: Health Canada will have the ability to disclose confidential business information related to a consumer product to a person or government working in the area of protection of human health and safety. This disclosure could occur without consent from or notification to the reporter of the information or the person to whom the information relates.
- Reporting Obligations: A retailer will be obligated to report an incident involving a consumer product that could reasonably be expected to have serious adverse health effects or result in serious injury. An “incident” includes an occurrence located in Canada or elsewhere, or a product defect that resulted or may reasonably have been expected to result in an individual’s death, serious adverse health effect or serious injury. The retailer must provide notification within 2 days and a written report within 10 days of becoming aware of the incident or the recall.
- Product Recalls: Inspectors will be able to conduct spot inspections and order recalls or take other remedial measures where the inspector believes on reasonable grounds that a consumer product is a danger to human health or safety.
- Prohibited Sales: Retailers will be prohibited from advertising or selling a consumer product that they know is a danger to human health or safety, or is the subject of a recall in Canada. A “danger to human health or safety” refers to any existing or potentially unreasonable hazard that is posed by the consumer product during its normal or foreseeable use that may cause death, injury or have an adverse effect on an individual’s health.
- Penalties: Failure to comply with an inspector’s order will result in an administrative penalty of up to $25,000. Failure to comply with the other provisions under the Act will result in fines of up to $5,000,000 or imprisonment for a term not longer than two years, or both. In addition, directors and officers may be liable where they have directed, authorized or assented to the commission of the offence.
The statute will cover a broad range of consumer products and does not exclude any group of retailers. This could pose some challenges for charities selling used goods, particularly the provisions that require keeping records of supplier information, and the prohibition against selling items that have been recalled in the past. The proposed legislation recently went through its third reading in Parliament. Affected charities should make their concerns known to the government. Miller Thomson LLP can provide assistance with such submissions.