© 2011  Karen Selick

An edited version of this article first appeared in the March 4, 2011 issue of The Lawyers Weekly.
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Consumer Product Safety:  Health Bureacrats Run Amok

New legislation always has unintended consequences.  Unintended, however, does not necessarily mean unforeseeable. 

Bill C-36, the so-called Canada Consumer Product Safety Act (CCPSA), was passed by parliament in late December.  It will have several consequences that are completely predictable—and very detrimental.

The CCPSA was designed to replace the 40-year-old Hazardous Products Act.  It will supposedly “modernize” Canada’s regulatory regime, bring it into line with the United States and Europe, and save Canadians from death and maiming at every turn by empowering bureaucrats to more easily remove dangerous products from the marketplace.

This motherhood-type goal seems to have driven out of parliamentarians’ minds the notion that they should look for some evidence as to whether the regulatory regimes we’ll be mimicking have actually accomplished what they were supposed to—or if not, what they have accomplished instead.

The U.S. enacted similar legislation in 2008; the European Union, in 2004.  If those laws were really working to protect consumers, there should by now be several years’ statistics demonstrating that American and European consumers are safer than they were before, or that they are safer than Canadians.  But such evidence was conspicuously absent from the testimony delivered to the Commons and Senate committees that studied this bill.

Indeed, the latest available annual report of the EU’s appropriately named RAPEX system (“Keeping European Consumers Safe”) contains no data whatsoever regarding lives saved or injuries prevented, although it does show a marked increase in paper-shuffling and similar bureaucratic activity.

Meanwhile, the Public Health Agency of Canada reports that hospitalizations from unintentional injuries in Canada had plummeted by 40 percent, and deaths by a whopping 46 percent, between 1990 and 2005, under Canada’s old, supposedly obsolete law.  Could there possibly be any truth to the rumour that businesses voluntarily try to avoid killing or injuring their customers because it’s bad for sales and for liability insurance premiums?

Here’s what passed for reasoning when an early version of the bill was introduced in the senate in June, 2009.  The Hazardous Products Act had “gaps” in it, alleged Senator Yonah Martin.  Specifically, “It contains no general prohibition against supplying unsafe consumer products that pose an unreasonable danger to human health or safety.”  Apparently the honourable senator has never heard of tort law, and thinks the only law in Canada is the statutes passed by her and her fellow senators.

The cost of implementing the CCPSA is not yet known. However, Health Canada officials testified that they are already in the process of doubling the number of inspectors on staff.

The beefed-up army of inspectors will have broad powers to examine any place in Canada where consumer products are manufactured, imported, stored, labeled, etc.  But fully 83.9 percent of our manufactured imports come from the U.S. and the E.U.  If the goal is to harmonize our regulations with those two zones, why not just free-ride on the inspections already done in those countries?

It turns out the U.S. has had some difficulties getting its regulatory act together—to put it mildly. Enforcement of important testing and certification regulations has been postponed four times.  Apparently there are not enough laboratories in existence to conduct the testing the law requires.

Nevertheless, businesses are being told that they are responsible for complying with the law.  One regulation deems clothing for children 12 and under to be hazardous waste unless certified free of lead and phthalates.  Children’s clothing stores and thrift shops have faced the prospect of throwing away masses of inventory because testing is either unavailable or prohibitively expensive.  But how many kids over 3 suck on their clothes anyhow?

Ominously, a sign appeared on the door of a thrift shop near my home a few weeks ago, reading: “Toys no longer accepted due to liability and government regulations.”  So Canadians, too, can expect the CCPSA to have the effect of making second-hand toys, sporting goods and clothing unavailable to the low-income families who need them.  And struggling families who want to recoup a little cash by selling their kids’ outgrown items will also suffer if Canada enacts U.S.-style regulations. 

Used articles aren’t the only merchandise affected.  Small U.S. manufacturers of new toys, clothing, sporting goods, jewellery and crafts have reported that regulatory compliance costs are forcing them out of business.  Large manufacturers can spread testing costs over millions of sales; little guys can’t.  Many have already closed their doors—but you won’t find those stats touted by the U.S. government.  Meanwhile, chalk up increasing corporate concentration as another unintended consequence of such laws.

And don’t forget increased corruption.  Inspectors will have enormous discretionary power, with little supervision.  They can literally order a business to stop all its activities for an unlimited length of time while the inspector verifies compliance with the regulations.  The temptation to offer the inspector a small gift in return for looking the other way, or for cracking down on one’s competitors, will be huge.

But won’t it all be worthwhile to protect babies from dangerous cribs, as Health Minister Leona Aglukkaq argued last fall?  Maybe not. When regulations increase the price of new cribs and make used cribs unavailable, more parents will choose to take their babies into their own beds.  U.S. figures showed a fourfold increase in the number of infant deaths from suffocation between 1984 and 2004, a figure that experts attribute to the doubling of bed-sharing arrangements that occurred during this period.   So the new law may kill more babies than it saves.

The sad thing is, we’ll never know.  Rest assured that, just like their EU counterparts, Canadian health bureaucrats will only announce how many product recalls they’ve ordered, not how many unexpected deaths they’ve caused.


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        This article was also reprinted in the Financial Post on March 9, 2011 under the headline: 
The C-36 Shutdown — Consumer Safety Act may shutter small business.

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