Canada Consumer Product Safety Act

On December 14, 2010, the Parliament of Canada passed the Canada Consumer Product Safety Act (CCPSA). Royal Assent, the last step required in the creation of new law, was granted on December 15, 2010. It is anticipated that an accelerated implementation plan will be developed by the Federal Government in order to facilitate the CCPSA coming into force in the next few months.

Of particular importance are the new self-reporting requirements which compel the manufacturers, importers and sellers of consumer products to notify Health Canada, and the supplier from whom the product was received, of any "incident" with respect to the product within two days after the day when they become aware of the incident.  Within ten days of becoming aware of the incident, the manufacturer, importer or seller must provide to Health Canada a comprehensive written report containing information about the incident, the product involved, and what measures are being taken with respect to the product.

The definition of an "incident" is broad, and includes:

• 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 serious injury;
• 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 serious injury;
• Incorrect, insufficient or lack of information on a label or in instructions that may reasonably be expected to result in an individual's death or in serious adverse effects on their health, including serious injury;
• A recall measure that is initiated for human health and safety reasons by a foreign entity, provincial government, provincial public body, Aboriginal government, and other institutions defined in the Act. 

According to a recent Health Canada consultation paper, manufacturers, importers and sellers are also obliged to report incidents where no actual death or injury has resulted - the potential for injury (commonly known as a "near-miss incident") is sufficient to trigger the mandatory self-reporting requirement.

To ensure compliance with the Act, the CCPSA provides for the appointment of inspectors who will be empowered to order a manufacturer, importer or seller of a consumer product to conduct tests or studies on a consumer product, provide documents related to those tests and studies, and to compile any information which is required to verify compliance with the Act.  Inspectors will also have broad inspection and seizure powers - for example, inspectors will be able to enter any premises, including a vehicle but excluding a private dwelling, without a search warrant, if they have reasonable grounds to believe that a consumer product is being manufactured, imported, packaged, stored, advertised, sold,labelled, tested or transported on those premises. 

The CCPSA recordkeeping requirements require all persons who manufacture, import, advertise, sell or test a consumer product for commercial purposes to maintain for six years documents identifying  from whom they obtained the product, and to whom it was sold.  Retailers are also obliged to keep records of the location where and the date when the product was sold. 

If the Federal Government chooses to use the broad powers provided for under the CCPSA, the impact on manufacturers, importers, advertisers and sellers, and their insurers, will be enormous as failure to adhere to the strict requirements of the Act may result in mandatory recalls, seizures, or orders to stop the manufacture and sale of a consumer product.  Furthermore, individuals and companies found in violation of the Act, or of orders made under the Act, face fines of up to $5,000,000 or imprisonment of up to two years.  A company's "directors, officers, agents and mandataires who directed, authorised, assented to, acquiesced in or participated in the commission of the offence" are deemed to be parties to the offence, and are exposed to fines and imprisonment, even if they are not individually prosecuted for the offence. 

Any company that does not have comprehensive supply chain, manufacturing and retail tracking systems in place, and which does not monitor the product to determine whether there is a reportable incident, will be exposed to the heavy penalties that can be imposed under the CCPSA.  

McCague Borlack LLP is preparing a comprehensive checklist for our clients of key elements that manufacturers, importers or sellers of consumer goods should review in order to ensure compliance with the new Act.  Should you wish a copy, please do not hesitate to contact Gosia Bawolska at 416-869-7823 or gbawolska@mccagueborlack.com. 

Gosia will be one of the presenters at the May 2011 Canadian Institute seminar on Consumer Product Safety, Liability & Recalls.  Gosia is a member of the McCague Borlack LLP Products Liability Practice Group.