Clean up in Aisle C-52

Recently, Canadians have been inundated with consumer and food product recalls. In response to consumer concerns, the government introduced the Canada Consumer Product Safety Act (Bill C-52) and proposed amendments to the Food and Drug Act. It has also been widely reported that the federal government intends to spend more than $113 million on programs related to consumer safety.

Although at press time, as the country heads to the polls to decide who will form the next federal government, the future of Bill C-52 is uncertain, it is worth outlining just what this proposed bill could mean to food and beverage manufacturers. In terms of product safety, the enforcement and oversight measures included in Bill C-52 include the ability of Health Canada to force a company to recall a product, impose penalties for non-compliance, and ultimately, fine or imprison persons for non-compliance. Under the definitions, a “consumer product” includes its components, parts and accessories that are available to the public or individuals. Notwithstanding, the government recognizes that the majority of companies have conscientious programs and controls relating to consumer product safety in Canada. Bill C-52 is meant to protect consumers against those companies who have less stringent measures in place; it is the view that this legislation is long overdue.

In situations where a product recall is warranted, inspectors are empowered under C-52 to make orders with compliance timelines, such as ordering a recall, to stop the sale of products, and to re-label or issue a public advisory. The inspector can also order how a product under recall is to be disposed of by a party in the supply chain. In the event that the order is not carried out, the ministry can conduct the recall and bill the expense, for instance, to the supplier.
Persons who contravene C-52 and are found guilty of an offence upon indictment are subject to a fine of not more than $5 million and to imprisonment for not more than two years. Persons who contravene the Act and are found guilty of an offence upon summary conviction are subject to a fine of not more than $250,000 and up to six months in prison.

Subsequent offences in both categories may result in escalation of the fines and terms of imprisonment.

In terms familiar to most importers but perhaps not to manufacturers, non-criminal compliance and enforcement measures include a civil penalty regime (AMPS – Administrative Monetary Penalty System), where the inspector has the authority to issue a notice of violation together with a penalty to a maximum of $25,000. If an affected party does not act on a notice of violation, the penalty can be reissued cumulatively for each day of non-compliance.

What should concern businesses is that C-52 specifically removes the right of an importer or manufacturer to use the defence of due diligence or reasonable care in respect of the AMPS. Further, and given the potential magnitude of the penalties, C-52 does not seem to provide an appeal mechanism for such violations. A person sufficiently aggrieved by a penalty will likely have to commence an action in the Federal Court of Canada requesting a judicial review. Apart from the costs associated with these actions, Health Canada may take the position that the court is limited to confirming or setting aside the violation. Further, the court may limit the grounds for review, as it is a review on the record and, therefore, the court cannot receive fresh evidence on review.

The amendments to the Food and Drug Act (Bill C-51) also focus on the principles of active prevention, targeting non-compliance and rapid-response strategies. One of the most significant changes in C-51 are the requirements for continuous or lifetime product monitoring. Bill C-51 also empowers the government to set up licensing systems and issue licenses to persons who sell or import food, therapeutic products or cosmetics. This could include the need to establish tracking systems to be able to trace the products back to their true origin or destination.

For the most part, the powers of inspectors under the Act are largely in harmony with the powers outlined in C-52. Many special interest groups will oppose these amendments on the basis that the sale of non-traditional medicines or therapies may be curtailed. This, according to the government, is not so, nor the intent of C-51. Instead, the government feels that it is in the best interest of all Canadians that all food products, medicines and the like are subject to stringent safety requirements prior to being sold.

Given the events of the last 12 months, it is becoming increasingly critical that all parties involved in supplying food and consumer products need to develop both a robust awareness program and a risk management program in their organizations.