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Canada's New Consumer Product Legislation: A Shield or a Sword?

Article excerpt

This article originally appeared in the January 2011 Product Liability Committee Newsletter.

Manufacturers, importers and retailers selling consumer products in Canada will soon experience a flurry of regulatory change. On December 15, 2010, the Parliament of Canada gave royal assent to Bill C-36, "An Act respecting the safety of consumer products," to be known as the Canada Consumer Product Safety Act ("CCPSA"). CCPSA is awaiting proclamation in force. Once CCPSA is proclaimed in force, it will transform Health Canada into a weighty regulator of the consumer product supply chain, with powers akin to those of the Consumer Product Safety Commission ("CPSC") in the U.S.

The stated goal of CCPSA is to strengthen and standardize the consumer product safety regime in Canada, which Health Canada--Canada's federal health authority---expects to achieve through:

* a new power to order recalls of consumer products

* increased and onerous reporting responsibilities for the consumer products industry

* a new prosecution and penalty regime to compel compliance.

The impetus for Bill C-36 was a series of high profile international recalls in 2007 and 2008 (including lead paint in children's toys and melamine in infant formula), which challenged the Canadian government to modernize its health and food product safety regime to deal with "new economic realities," including new

products, new technologies and increased global trade.

For companies supplying Canadians with consumer products, the likely consequences will be not just increased regulation but also increased class action litigation. Plaintiffs undoubtedly will seek to take advantage of the new self-reporting obligations to be imposed upon corporations plus the regulator-mandated recalls.

Pre-CCPSA Regulatory Landscape

The primary legislation governing consumer products in Canada since 1969 has been the Hazardous Products Act (HPA). But HPA is limited in scope and effect. It does not apply to all consumer products generally. Rather, it applies to only a limited number of consumer products. In addition to HPA, a few other statutes regulate specific products, such as the Canadian Food Inspection Agency Act (food), the Food and Drugs Act (food, drugs, medical devices and cosmetics), and the Motor Vehicle Safety Act (motor vehicles).

Under HPA, Health Canada's mandate includes the regulation of: "... any product, material or substance that is or contains a poisonous, toxic, flammable, explosive, corrosive, infectious, oxidizing or reactive product ... (which) is or is likely to be a danger to the health and safety of the public; or any product designed for household, garden or personal use, for use in sports or recreational activities, as lifesaving equipment or as a toy, plaything or equipment for use by children... (which) is or is likely to be a danger to the health or safety of the public because of its design, construction or contents." In other words, the scope of HPA is limited to products that are considered to be inherently dangerous.

CCPSA and Health Canada's New Powers

CCPSA repeals and replaces Part I of HPA, and it applies to most consumer products generally, with only limited exceptions. As a result, a wide array of consumer products, not currently subject to detailed regulation, will be caught by this new legislative regime.

CCPSA contains several broad prohibitions that build upon the list of products restricted by HPA, which will shift the approach of consumer product regulation to an anticipatory position that is more consistent with the consumer product regulatory regime in the U.S.

Increased Reporting Responsibilities

CCPSA will impose on manufacturers, importers and sellers a duty to notify Health Canada, and the suppliers from whom each of them received the consumer product, of any "incident" with respect to a consumer product supplied in Canada. …