Wednesday, January 8, 2014

Canada’s Consumer Product Safety Act: An Update

By Wendy Hulton

Canada has a complex legal framework at both the federal and provincial levels that governs the safety requirements for products sold in Canada. The Canada Consumer Product Safety Act (CCPSA) is a broad federal statute that addresses consumer product safety, testing, incident reporting, record-keeping, inspection and product recall. Some products sold in Canada are subject to other specific federal and provincial safety-related legal requirements, such as foods, drugs, natural health products, cosmetics, upholstered and stuffed articles, textiles and motor vehicles.

The CCPSA came into force in 2011 and replaced part 1 and schedule 1 of the Hazardous Products Act. The CCPSA grants Health Canada powers to order a person to take certain measures including but not limited to:

  • stopping the manufacturing, importation, packaging, storing, advertising, selling, labelling, testing or transport of consumer goods;
  • carrying out testing or studies; and
  • any measure that Health Canada considers necessary to remedy non-compliance with the CCPSA, including any measure to address or prevent a danger to human health or safety

Reporting Requirements

A person who manufactures, imports, or sells a consumer product in Canada, who receives information respecting an event, must report the event if it is ‘related’ to a consumer product and it constitutes an ‘incident’. The report must be provided to Health Canada and to the person from whom they received the consumer product.

Information regarding an incident that may be considered a reportable incident can come from a variety of sources, including but not limited to:

  • consumer complaints or product liability lawsuits or claims;
  • notification by government (including Health Canada) or standards bodies;
  • notification from the person they obtained the product from or to whom they sold the product;
  • notification by a non-government organization;
  • receipt of reports from experts, test reports, scientific or epidemiological studies or other relevant information.

Health Canada has indicated that the two-day mandatory reporting period is subject to some interpretation with regard to the length of time it may take to investigate and determine that there is a reportable incident. Within 10 days, the manufacturer or importer must submit a further report about the incident, the product involved, any other products that could be involved in similar incidents, and any proposed response to Health Canada.

First Mandatory Recall

In April, Canada’s Federal Minister of Health announced that the Government would take action to remove some dangerous magnet sets from the Canadian marketplace. In May, Health Canada issued an Advisory and news release warning the Canadian public about these products. This process culminated in Canada’s first-ever mandatory recall under the CCPSA for a consumer product on June 21st when NeoMagnetic Gadgets Inc. was ordered to issue a recall and stop sale after the company failed to take voluntary action to remove their magnet sets from the marketplace.

No More Dual Reporting in Ontario

In Ontario, until August of 2013, an incident involving an electronic product or component had to be reported to both Health Canada and Ontario’s Electrical Safety Authority.

The reporting requirements found in Sections 8 of Ontario Regulation 438/07 have been revoked, which means that as of August 1st, the ESA has officially handed over responsibility for incident reporting in connection with consumer electronics to Health Canada. If you visit the ESA website and click on Product Safety Reporting Form, you will be re-directed to Health Canada’s CCPSA webpage.

New Fines

In general, it is an offense to contravene a provision of the CCPSA. Criminal sentences for the most serious offenses may include a fine of up to $5 million and imprisonment of up to two years. If a corporation commits an offense, the directors, officers and agents are deemed to be parties to the offense and are liable to punishment.

The CCPSA establishes an administrative monetary penalty (AMP) system. An AMP system assigns a monetary penalty for contravention of certain provisions of the Act. This summer, the Administrative Monetary Penalties (Consumer Products) Regulations came into force. The AMPs give the CCPSA some teeth, while still permitting a flexible response for enforcement activity. Typically, AMPs only come into effect when the government orders a company to recall a product or orders it to take other steps to protect the safety of Canadians such as ceasing to manufacture, import or sell a product and the company does not comply within the specified timeframes.

As you would expect, the penalties increase depending on the nature of the violation and the past violation history of the person or company in question. The maximum penalties range from $5,000 (for a violation committed by an individual or a non-profit corporation, for non-commercial purposes), to $25,000. These figures represent daily penalties – which provides incentive for parties to come into compliance quickly, as the fees can increase with each passing day until the matter is resolved.

Wendy Hulton is a Partner in Dickinson Wright’s Toronto office. She can be reached at