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Canada Consumer Product Safety Act Ė Why You Need to Be PreparedWednesday, April 27, 2011 > 09:17:16
(Mondaq – Eva Chan, Borden Ladner Gervais LLP)
The federal government has passed the Canada Consumer Product Safety Act (CCPSA), which will come into force on June 20, 2011. The CCPSA will replace Part I of the Hazardous Products Act (Canada).
Given the very broad scope of the CCPSA and the significant penalties under it, employers will need and want to be prepared when the CCPSA comes into force.
The CCPSA applies to "consumer products", which is defined to mean "a product, including its components, parts or accessories, that may reasonably be expected to be obtained by an individual to be used for non-commercial purposes, including for domestic, recreational and sports purposes, and includes its packaging." For example, the CCPSA would capture the manufacture, distribution, sale, and advertising of pens, keys chains, toys, jewellery, and clothing. The CCPSA does not apply to items such as food, drugs, and cosmetics.
Note that the definition of "sell" in the CCPSA includes distribution, whether or not it is made for consideration. This would, therefore, include a company giving away promotional items for free.
The CCPSA imposes a number of prohibitions, including prohibiting the manufacturing, importing, advertising or selling of certain consumer products (e.g., baby walkers with wheels, BPA baby bottles, and lawn darts with elongated tips). Another prohibition is the advertisement or sale of a consumer product that one knows is a danger to human health or safety or is a subject of a recall order under the CCPSA.
The CCPSA requires any person who manufactures, imports, advertises, sells or tests a consumer product for commercial purposes to maintain certain documents. For instance, retailers must maintain the name and address of the person from whom they obtained the product, the location where and the period during which they sold the product, and any other prescribed documents. The documents must be kept at the retailer's place of business in Canada for 6 years after the end of the year to which they relate or for any other period that may be prescribed.
The CCPSA requires any person who manufactures, imports or sells a consumer product for commercial purposes to provide the Minister of Health, and the person they received the consumer product from, with all information in their control regarding an incident related to the product within 2 days after becoming aware of the incident. An "incident" does not simply mean where death or a serious adverse effect on a person's health has occurred, but also includes an occurrence that may reasonably have been expected to result in an individual's death or in serious adverse effects on health, as well as a defect or characteristic, or incorrect or insufficient information on a label or instruction (including the lack of a label or instruction), that may reasonably be expected to result in an individual's death or in serious adverse effects on health. It also includes a recall or measure that is initiated for human health or safety reasons.
The Minister of Health will have broad powers including ordering a manufacturer or importer to test, study and compile information regarding a consumer product at the manufacturer's or importer's expense; ordering an immediate recall if the Minister believes the consumer product is "a danger to human health of safety"; and carrying out the recall at a person's expense who does not comply with the recall order.
Inspectors will also have broad powers, including entering any place without a warrant (except a house); and examining, testing, seizing, detaining, taking photos and making recordings or records and products.
The penalties for offences under the CCPSA include fines of up to $5 million and a prison term of up to 2 years. Where the offence is committed by a corporate entity, any directors, officers, agents or mandataries who directed, authorized, assented to, acquiesced to, or participated in the commission of the offence are liable on conviction even if they were not individually prosecuted for the offence.
There are a number of things businesses should start doing right away including:
• Conducting an audit of the consumer products they produce, advertise, distribute and sell to determine whether the CCPSA applies to such products;
• Reviewing their advertising, packaging, labelling and distribution practices and policies to determine whether they are in compliance with the CCPSA;
• Reviewing contracts to deal with risks and obligations under the CCPSA and to further mitigate risk; and
• Preparing a record keeping policy, an incident reporting policy, and a recall action plan so personnel will know what to do.
In addition, directors, officers and employees should be made aware of the legislation (including record maintenance and reporting requirements) and the potentially serious penalties that can be imposed for failing to comply with the CCPSA.