On June 9, 2010, the Government of Canada introduced the proposed Canada Consumer Product Safety Act (the “CCPSA”) with a view to enhancing existing consumer product safety laws and the federal government’s ability to take action when consumer products pose, or are likely to pose, an unreasonable danger to human health or safety. The CCPSA will oblige industry players to notify Health Canada of defects in or serious incidents involving consumer products, provide for corrective action when a dangerous product is discovered, and enable the federal government to order the recall of consumer products found to be unsafe.1
Concurrently, the Government of Canada also proposes Exemption Regulations designed to exempt consumer products, classes of consumer products or classes of persons from certain provisions of the CCPSA. The Exemption Regulations seek to strike a balance between the increased compliance burden imposed by the CCPSA in certain circumstances, while at the same time ensuring the maintenance of public safety. The Exemption Regulations are designed to:2
- maintain the status quo for the current manufacture, import and export of consumer products that are non-compliant under the proposed CCPSA, where those products are not intended for sale or use in Canada;
- align Canadian product safety regulatory practices with those in other countries; and
- provide Health Canada with additional information about activities related to the manufacture, export and import of non-compliant consumer products, with the objective of developing future policy, regulatory decisions and Memoranda of Understanding.
Health Canada is conducting two public consultations regarding the Exemption Regulations that will continue until October 19, 2010; one pertaining to the proposed regulations intended to exempt consumer products that are otherwise non-compliant under the CCPSA; and the other pertaining to the proposed exemption of certain establishments from the obligation to prepare and maintain the document chain required under the CCPSA.
As presently proposed, if a consumer product does not meet the requirements of the CCPSA, then its manufacture, importation, advertisement and sale is prohibited in Canada, unless specifically exempt. As also proposed, permissible exempt consumer products and activities include:3
- products manufactured domestically, or imported into Canada, which are then exported for sale;
- products that are imported into Canada and are then brought into compliance with the CCPSA and any other regulatory requirements; and
- products that are manufactured, imported or advertised for testing, research or exhibition (so long as the products are not sold in Canada).
In order to seek safe harbour under these proposed exemptions, an application for approval will have to be submitted to Health Canada that not only sets out the basis for the requested approval but also particulars of importation, shipping dates and personal contact information in order to facilitate compliance and enforcement.
As also presently proposed, the CCPSA will require anyone who sells consumer products for commercial purposes in Canada to prepare and maintain documents that indicate the name and address of the person from whom they obtained those products, the name and address of the person to whom they sold those products, and the time window within which those products were sold. The legislative intent of this documentary process is to enable Health Canada to track consumer products through the supply chain up to the highest level in order to enforce corrective actions and recalls in an efficient and effective manner.
Recognizing that in some circumstances the requirement to prepare and maintain a documentary chain would prove burdensome, ineffective and inefficient, the Exemption Regulations propose to exempt an establishment from the foregoing documentary obligation where:4
- the consumer products are donated (i.e. given for no consideration); and
- the donation is from a person other than a manufacturer, importer, distributor, or retailer.
However, even if exempt from the documentary chain obligations under the CCPSA, the exempt establishment will still be required to ensure that the consumer products in question have not been recalled and otherwise meet the requirements of the CCPSA and its regulations (except if the products are exempt from certain requirements). Moreover, the exempt establishment must report any incidents that are brought to its attention and must continue to meet other applicable requirements at the federal, provincial, territorial and municipal levels.
Look to our future reports for updates on the progress of this legislation and concurrent exemption regulations.