CANADA Law and Practice Contributed by: Sylvie Rodrigue, Grant Worden, Nicole Mantini and Anne Merminod, Torys LLP
and monitor adherence to safety requirements for vehicles, tyres, and accessories. 1.3 Obligations to Commence Corrective Action The duty to commence corrective action in Canada is typically triggered when a company becomes aware, or reasonably ought to have become aware, that a consumer product poses, or is likely to pose, a danger to human health or safety. Such awareness may arise from customer complaints, reports of injury, inde - pendent testing, internal quality controls, or notifica - tions from regulatory authorities either within Canada or from other jurisdictions. Once a risk is identified, manufacturers, importers, and sellers are required to assess the scope and severity of the hazard. Corrective action may encompass a range of responses, such as issuing warnings to con - sumers, modifying product instructions or labelling, repairing or replacing defective items, or conducting a voluntary or mandatory product recall. The chosen course of action must be proportional to the risk and designed to eliminate or reduce potential harm as effectively as possible. Companies are expected to initiate voluntary recalls if they identify a product safety risk. For consumer prod - ucts and products falling under the FDA, recalls are typically co-ordinated with Health Canada to ensure appropriate consumer notification and remedy. Health Canada retains the authority to order a mandatory recall if a company fails to act voluntarily or if the vol - untary action is deemed inadequate to protect public safety. 1.4 Obligations to Notify Regulatory Authorities The notification requirements concerning potential product safety issues are imposed by several statutes and corresponding regulations, and they vary depend - ing on the legislative regime. For example, the CCPSA requires manufactur - ers, importers, and sellers of consumer products to report incidents involving those products (whether they occurred in Canada or elsewhere). Incidents include serious adverse health effects, deaths, prod -
uct defects, malfunctions, incorrect/incomplete labels or warnings, or recalls. Notification must be without delay, typically within two days of identifying the risk, and must include relevant details about the product, the nature of the hazard, and the actions being taken to mitigate harm. When Health Canada becomes aware of a potential product safety breach ‒ whether through consumer complaints, reports from other jurisdictions, or com - pany self-reporting ‒ it may launch an investigation. This can include inspecting products, company records, and manufacturing facilities. 1.5 Penalties for Breach of Product Safety Obligations Civil Penalties Civil penalties depend on the legislative regime at issue. For example, under the CCPSA, these can take several forms, including the following. • Administrative monetary penalties (AMPs): fines imposed for contravention of the CCPSA or its regulations. The exact amount varies depending on the nature and severity of the violation. • Recall orders: companies may be ordered to recall products, notify the public, or offer replacements or refunds. Failure to comply with recall orders can result in additional penalties. • Orders to take corrective actions: these may include ceasing the sale or distribution of a prod - uct, modifying a product, or changing labelling and packaging. When assessing the appropriate civil penalties, regu - latory authorities typically consider a range of factors (which can vary with the specific product type and legislation at issue). These factors often include: • the severity and potential impact of the safety breach; • whether the breach was intentional, reckless, or negligent; • the company’s history of compliance or non-com - pliance; • steps taken to mitigate harm or co-operate with the authorities; and • the financial benefit gained from non-compliance.
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