Regulations Amending Certain Regulations Made Under the Canada Consumer Product Safety Act (Surface Coating Materials): SOR/2022-122

Canada Gazette, Part II, Volume 156, Number 13

Registration
SOR/2022-122 June 3, 2022

CANADA CONSUMER PRODUCT SAFETY ACT

P.C. 2022-614 June 2, 2022

Her Excellency the Governor General in Council, on the recommendation of the Minister of Health, pursuant to section 37^{footnote a} of the Canada Consumer Product Safety Act^{footnote b}, makes the annexed Regulations Amending Certain Regulations Made Under the Canada Consumer Product Safety Act (Surface Coating Materials).

Regulations Amending Certain Regulations Made Under the Canada Consumer Product Safety Act (Surface Coating Materials)

Toys Regulations

1 (1) The definition good scientific practices in section 1 of the Toys Regulations ^{footnote 1} is replaced by the following:

good scientific practices

means

• (a) in the case of test data, conditions and procedures that are in accordance with or equivalent to those set out in the Organisation for Economic Co-operation and Development document entitled OECD Guidelines for the Testing of Chemicals, as amended from time to time; and
• (b) in the case of laboratory practices, good laboratory practices. (bonnes pratiques scientifiques)

(2) Section 1 of the Regulations is amended by adding the following in alphabetical order:

good laboratory practices

means practices that are in accordance with the principles set out in the Organisation for Economic Co-operation and Development document entitled OECD Principles of Good Laboratory Practice, Number 1 of the OECD Series on Principles of Good Laboratory Practice and Compliance Monitoring, ENV/MC/CHEM(98)17, the English version of which is dated January 21, 1998 and the French version of which is dated March 6, 1998. (bonnes pratiques de laboratoire)

2 Section 23 of the Regulations is replaced by the following:

Stickers, films and surface coating materials

23 (1) A sticker, film or other similar material that can be removed, or a surface coating material, that is applied to an accessible part of a toy must not contain, when it is tested in accordance with a method that conforms to good laboratory practices,

• (a) more than 90 mg/kg total lead;
• (b) any compound of antimony, arsenic, cadmium, selenium or barium if more than 1 000 mg/kg of the compound migrates from the material; or
• (c) more than 10 mg/kg total mercury.

Definition of accessible part and surface coating material

(2) For the purposes of subsection (1), accessible part and surface coating material have the same meanings as in section 1 of the Surface Coating Materials Regulations.

Cribs, Cradles and Bassinets Regulations

3 Section 3 of the Cribs, Cradles and Bassinets Regulations ^{footnote 2} is replaced by the following:

Stickers, films and surface coating materials

3 (1) A sticker, film or other similar material that can be removed, or a surface coating material, that is applied to an accessible part of a crib, cradle, bassinet, accessory or stand must not contain, when it is tested in accordance with a method that conforms to good laboratory practices,

• (a) more than 90 mg/kg total lead;
• (b) any compound of antimony, arsenic, cadmium, selenium or barium if more than 1 000 mg/kg of the compound migrates from the material; or
• (c) more than 10 mg/kg total mercury.

Definition of accessible part and surface coating material

(2) For the purposes of subsection (1), accessible part and surface coating material have the same meanings as in section 1 of the Surface Coating Materials Regulations.

Expansion Gates and Expandable Enclosures Regulations

4 Section 1 of the Expansion Gates and Expandable Enclosures Regulations ^{footnote 3} is amended by adding the following in alphabetical order:

good laboratory practices

means practices that are in accordance with the principles set out in the Organisation for Economic Co-operation and Development document entitled OECD Principles of Good Laboratory Practice, Number 1 of the OECD Series on Principles of Good Laboratory Practice and Compliance Monitoring, ENV/MC/CHEM(98)17, the English version of which is dated January 21, 1998 and the French version of which is dated March 6, 1998. (bonnes pratiques de laboratoire)

5 Section 2 of the Regulations is replaced by the following:

Stickers, films and surface coating materials

2 (1) A sticker, film or other similar material that can be removed, or a surface coating material, that is applied to an accessible part of an expansion gate or an expandable enclosure must not contain, when it is tested in accordance with a method that conforms to good laboratory practices,

• (a) more than 90 mg/kg total lead;
• (b) any compound of antimony, arsenic, cadmium, selenium or barium if more than 1 000 mg/kg of the compound migrates from the material; or
• (c) more than 10 mg/kg total mercury.

Definition of accessible part and surface coating material

(2) For the purposes of subsection (1), accessible part and surface coating material have the same meanings as in section 1 of the Surface Coating Materials Regulations.

Surface Coating Materials Regulations

6 (1) The definition surface coating material in section 1 of the Surface Coating Materials Regulations ^{footnote 4} is replaced by the following:

surface coating material

means a paint or other similar material, with or without pigment, that forms a solid film after it is applied to a surface and that can be removed. (revêtement)

(2) Section 1 of the Regulations is amended by adding the following in alphabetical order:

accessible part

means any part of a product that may be touched, licked, mouthed or swallowed during the reasonably foreseeable use of the product. (partie accessible)

7 Section 5 of the English version of the Regulations is replaced by the following:

Mercury content and test method

5 A surface coating material must not contain more than 10 mg/kg total mercury when a dried sample is tested in accordance with a method that conforms to good laboratory practices.

8 Section 6 of the Regulations and the heading before it are replaced by the following:

Products With Applied Stickers, Films or Surface Coating Materials

Lead content

6 A sticker, film or other similar material that can be removed, or a surface coating material, that is applied to an accessible part of the following products must not contain more than 90 mg/kg total lead when it is tested in accordance with a method that conforms to good laboratory practices:

• (a) furniture;
• (b) products for children;
• (c) pencils; and
• (d) artist brushes.

Playpens Regulations

9 Section 3 of the Playpens Regulations ^{footnote 5} is replaced by the following:

Stickers, films and surface coating materials

3 (1) A sticker, film or other similar material that can be removed, or a surface coating material, that is applied to an accessible part of a playpen or accessory must not contain, when it is tested in accordance with a method that conforms to good laboratory practices,

• (a) more than 90 mg/kg total lead;
• (b) any compound of antimony, arsenic, cadmium, selenium or barium if more than 1 000 mg/kg of the compound migrates from the material; or
• (c) more than 10 mg/kg total mercury.

Definition of accessible part and surface coating material

(2) For the purposes of subsection (1), accessible part and surface coating material have the same meanings as in section 1 of the Surface Coating Materials Regulations.

Coming into Force

10 These Regulations come into force on the 180th day after the day on which they are published in the Canada Gazette, Part II.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

The Regulations Amending Certain Regulations Made Under the Canada Consumer Product Safety Act (Surface Coating Materials) [hereafter “the Regulations”] help address a number of issues related to the regulatory requirements under the Canada Consumer Product Safety Act (CCPSA) for surface coating materials and for consumer products with applied coating materials.

Health and safety considerations

Lead, mercury and certain other harmful elements (antimony, arsenic, cadmium, selenium and barium) in a surface coating material or a coating material applied to a consumer product are a hidden hazard because they cannot be identified visually. The previous Surface Coating Materials Regulations restricted lead and mercury in surface coating materials and restricted lead in applied surface coating materials for certain consumer products. Additionally, lead, mercury and certain other harmful elements have been restricted for many years in applied surface coating materials on certain consumer products for children through a number of regulations under the CCPSA. As a result, it is uncommon to find such consumer products that contain non-compliant levels of these elements in the Canadian market. However, the requirements of the previous regulations did not apply to all types of surface coating materials; for example, materials such as stickers and films that may have been used as a decorative coating on a consumer product but were not included in the definition of a surface coating material, and were not captured by the regulatory requirements. Also, some consumer products with an applied coating material that are regulated for lead in the United States were not regulated in Canada; for example, the United States restricts the lead content of applied surface coating materials on all household furniture while in Canada the restriction applied to children’s furniture only. Industry stakeholders have indicated that few of these previously unregulated consumer products were likely to have an applied coating containing lead, mercury or certain other harmful elements above the limits considered to be protective to children’s health. However, Health Canada did not have the authority to take quick enforcement action should limits be exceeded in consumer products or applied coating materials that were out of scope of the previous regulations.

Compliance burden considerations

The Surface Coating Materials Regulations, the Toys Regulations, the Cribs, Cradles and Bassinets Regulations and the Playpens Regulations specified a lead limit for applied surface coating materials, but such a requirement was not explicitly prescribed in the Expansion Gates and Expandable Enclosures Regulations. A supplier of expansion gates and expandable enclosures may not have been aware that the Surface Coating Materials Regulations also applied, as these products are products for children. The implicit reference of the requirements might have made compliance confusing for some regulated parties.

In addition, there were some requirements for applied surface coating materials that regulated parties were required to meet that impacted compliance costs, even though they did not provide benefits to protecting human health. For example, the requirements restricted lead, mercury or certain other harmful elements in applied surface coating materials on all consumer product parts, but only those parts that are or can become accessible during the reasonably foreseeable use of a product pose a risk to human health, since this is where exposure to the harmful elements is possible. Parts that remain inaccessible during reasonably foreseeable use of a consumer product, which includes foreseeable misuse, do not pose a risk of exposure to these elements, so they are no longer required to meet the established limits. This approach is consistent with the lead requirements in the Consumer Products Containing Lead Regulations under the CCPSA and the general lead ban for children’s products in the United States under the Consumer Product Safety Improvement Act of 2008 (CPSIA), as they both exclude inaccessible parts.

The specific issues are set out in greater detail in the “Description” section.

Background

Exposure to lead, mercury and certain other harmful elements can pose a serious health risk to humans, especially young children. The health effects that can result from exposure to one or more of these elements include impacts on the nervous system, heart, lungs, gastrointestinal tract and kidneys. Exposure can also affect child behaviour and development.

Historically, lead compounds were added to paints and other surface coating materials to accelerate drying, increase durability, resist moisture and produce specific colours. However, as the harmful effects of lead exposure to human health — and to children’s health in particular — became better known, lead use in surface coating materials decreased. Lead content restrictions for paints and other liquid coating materials were mandated in Canada in 1976 under the Hazardous Products (Liquid Coating Materials) Regulations of the Hazardous Products Act (HPA), as it then existed. The Hazardous Products (Liquid Coating Materials) Regulations restricted the total lead content of interior-use liquid coating materials to 5 000 mg/kg and required precautionary labelling on exterior-use liquid coating materials that contained more than 5 000 mg/kg total lead. In 2005, the Hazardous Products (Liquid Coating Materials) Regulations were renamed the Surface Coating Materials Regulations and were amended to capture other forms of surface coating materials. At that time, to help protect Canadians the total lead limit was reduced to 600 mg/kg for both interior- and exterior-use surface coating materials, which aligned with the federal limits in the United States, and a total mercury limit of 10 mg/kg was introduced. As in the United States, certain specialized surface coating materials were exempt from meeting the allowable total lead limit, provided their containers had precautionary labelling. In 2010, the allowable total lead limit was further reduced to 90 mg/kg, following the same action in the United States. In 2011, the Surface Coating Materials Regulations were amended by adding items 2 and 18 of Part I of Schedule I to the HPA, which restricted the total lead content of applied surface coating materials on products for children, pencils and artist brushes. This action was needed when Part I and Schedule I to the HPA were repealed and replaced with the CCPSA. The Surface Coating Materials Regulations were also transferred to the CCPSA at the same time.

The total lead and mercury limits of 90 mg/kg and 10 mg/kg, respectively, are the accepted background levels that cannot be completely eliminated from surface coating materials. They effectively prevent the intentional addition of lead and mercury to surface coating materials while allowing for naturally occurring lead and mercury impurities present in some surface coating material ingredients. These limits serve to help protect children from the adverse health effects of lead and mercury exposure based on Health Canada risk assessments.

To help protect the health of young children, requirements to limit lead, mercury and certain other harmful elements in applied surface coating materials were set out in the Toys Regulations, the Carriages and Strollers Regulations, the Cribs, Cradles and Bassinets Regulations, and the Playpens Regulations under the CCPSA. Requirements to limit mercury and certain other harmful elements in applied surface coating materials were set out in the Expansion Gates and Expandable Enclosures Regulations under the CCPSA. None of the requirements for applied surface coating materials in these regulations captured stickers, films or similar coating materials. Of note, lead limits for applied surface coating materials on expansion gates were authorized through paragraph 6(a) of the Surface Coating Materials Regulations, given that expansion gates were considered “products for children, including furniture.”

Objective

The objective of the Regulations is to amend the regulatory requirements for surface coating materials and applied coating materials under the CCPSA so that they are clear, consistent, relevant to all types of coating materials (including stickers, films and similar materials) and better aligned with requirements in the United States, without imposing an unnecessary compliance burden on industry. The amendments also give Health Canada the necessary tools to help protect Canadians by preventing the sale of non-compliant consumer products and quickly removing them from the market when identified.

The Regulations also link to Government of Canada’s regulatory reform initiatives to address health and safety considerations while helping to reduce the compliance burden on industry and improving the alignment of requirements with our major trading partners.

Description

For improved understanding of this statement, it may be helpful to note a fundamental difference between a surface coating material and an applied coating material. A surface coating material is one that is yet to be applied to something (for example a liquid or powder paint to be applied to an item). While an applied coating material is one that has already been applied to an item (for example a paint or film that is applied to a consumer product during manufacturing).

The following specific issues were identified:

• Definition of a surface coating material — A surface coating material was defined in the Surface Coating Materials Regulations as “a paint or other similar material, with or without pigment, that dries to a solid film after it is applied to a surface, but does not include material that becomes a part of the substrate.” Consequently, the Surface Coating Materials Regulations did not give Health Canada the authority to take enforcement action on products for children, pencils and artist brushes that had more than 90 mg/kg total lead in certain applied coating materials such as stickers or films, as these materials were not similar to paint and did not dry to a solid film after they were applied to a surface.
• The Toys Regulations, the Carriages and Strollers Regulations, the Cribs, Cradles and Bassinets Regulations, the Expansion Gates and Expandable Enclosures Regulations and the Playpens Regulations under the CCPSA also had provisions for applied surface coating materials, and these provisions linked back to the definition of a surface coating material in the Surface Coating Materials Regulations. As a result, the previous versions of these other regulations also did not apply to certain applied coating materials such as stickers or films that contained more than the allowable content of lead, mercury or certain other harmful elements.
• This gap may have had a negative impact on children’s health and safety. As with an applied paint or similar material, the presence of a harmful element in a coating, such as a sticker or film, presents a risk of exposure if the coating is disturbed in a way that allows it to be ingested, such as when a child mouths, chews, picks or scrapes it.
• The definition of a surface coating material under the previous Surface Coating Materials Regulations was also not aligned with the definition of a coating under ASTM F963, Standard Consumer Safety Specification for Toy Safety. ASTM F963 is a product safety rule in the United States that sets out mandatory requirements for the maximum allowable lead content in applied surface coating materials on toys by referencing the lead content provisions of Part 1303 of Title 16 of the Code of Federal Regulations (16 CFR Part 1303), Ban of Lead-Containing Paint and Certain Consumer Products Bearing Lead-Containing Paint, as well as the CPSIA. A coating under ASTM F963 refers to “all layers of material formed or deposited on the base material … which can be removed …”, and coatings such as stickers are specifically identified as being within the scope of the requirement.
• Another issue related to the definition of a surface coating material under the Surface Coating Materials Regulations was that it only applied to a coating material that “dries” to a solid film after it is applied to a surface. As a result, the definition excluded surface coating materials that form or change to a solid film by a means other than drying, such as powder coating materials that are applied electrostatically and cured under heat. These powder coating materials may have also presented a risk of exposure if more than the allowable amount of lead or mercury was present. The definition was also not aligned with the definition of a surface coating material in the United States under 16 CFR Part 1303, which in this respect refers to coating materials that “change to a solid film” on application.
• Scope of affected consumer products — The scope of consumer products for which the total lead content in applied surface coating materials was restricted under the Surface Coating Materials Regulations was limited to products for children (including children’s furniture), pencils and artist brushes. This product scope differed from the requirements in the United States’ 16 CFR Part 1303, which also includes furniture for consumer use. Health Canada did not have information regarding the actual levels of lead in applied surface coating materials on household furniture manufactured, imported, advertised or sold in Canada. However, furniture with a surface coating material containing total lead in excess of 90 mg/kg presents a risk of exposure to lead if the coating is disturbed in a way that allows it to be ingested, such as when a child mouths or chews on a furniture article or when the article is chipped or refinished.
• Inaccessible product parts — Applied surface coating materials containing harmful elements in excess of the allowable limits on inaccessible product parts, such as parts that are encased in a permanently sealed compartment and that do not become accessible during the reasonably foreseeable use of the product, which includes foreseeable misuse, do not present a risk of exposure. However, under the Surface Coating Materials Regulations, the Toys Regulations, the Carriages and Strollers Regulations, the Cribs, Cradles and Bassinets Regulations, the Expansion Gates and Expandable Enclosures Regulations and the Playpens Regulations, inaccessible product parts were not expressly excluded from the requirements for applied surface coating materials. This had no health benefit for children and created a burden on industry. This was also out of line with the lead requirements in the Consumer Products Containing Lead Regulations under the CCPSA and the general lead ban for children’s products in the United States under the CPSIA, as they both exclude inaccessible parts.
• Test method — A test method for measuring the total lead content of an applied surface coating material on a consumer product was not specified in the Surface Coating Materials Regulations. This may have compromised children’s health if unaccredited test methods that do not produce accurate, reliable and reproducible test results were used. In addition, the Toys Regulations, the Cribs, Cradles and Bassinets Regulations, the Expansion Gates and Expandable Enclosures Regulations and the Playpens Regulations specified test parameters for certain other harmful elements that were outdated and required only in Canada.
• Regulatory consistency — For consistency, the requirements for applied surface coating materials under the Toys Regulations, the Cribs, Cradles and Bassinets Regulations, the Expansion Gates and Expandable Enclosures Regulations and the Playpens Regulations needed consequential amendments. Under the Regulations, children who use these consumer products now have the same high level of protection from lead exposure as they do for products within the scope of the Surface Coating Materials Regulations. Consistent requirements across the regulations under the CCPSA will also help industry understand the requirements and how they are applied by Health Canada.
• Note that the Carriages and Strollers Regulations included restrictions on the content of lead, mercury and certain other harmful elements in applied surface coating materials indirectly by referencing the applicable sections of the Toys Regulations. As a result, consequential amendments to the Carriages and Strollers Regulations were not required, because they continue to reference the Toys Regulations, which are now amended.

To address these issues, the Regulations amend the Surface Coating Materials Regulations in the following manner:

• In section 1, within the definition of a surface coating material, the term “dries to a solid film” is changed to “forms a solid film,” and clarification that the solid film is one that can be removed from the surface (such as by scraping or with solvents) is added.
• In section 1, a definition of an accessible part that is aligned with the Consumer Products Containing Lead Regulations is added. This definition is “any part of a product that may be touched, licked, mouthed or swallowed during the reasonably foreseeable use of the product.”
• Section 6:
  • limits the requirement for total lead content to coatings applied to accessible parts of the products listed in this section;
  • describes a coating material applied to a product to mean a surface coating material as defined in section 1 as well as a sticker, film or other comparable material (such as a decal) that can be removed from the surface;
  • adds furniture to the products listed in this section (the common meaning of furniture applies, so a regulatory definition was not added); and
  • requires testing to be done in accordance with a method that conforms to good laboratory practices as defined in section 1.

The Regulations also amend the Toys Regulations, the Cribs, Cradles and Bassinets Regulations, the Expansion Gates and Expandable Enclosures Regulations and the Playpens Regulations in the following manner so that the requirements for applied coating materials are consistent with the Surface Coating Materials Regulations and each other:

• Section 1 of the Toys Regulations and the Expansion Gates and Expandable Enclosures Regulations adds a definition of good laboratory practices that is aligned with the definition in the Surface Coating Materials Regulations. The Cribs, Cradles and Bassinets Regulations and the Playpens Regulations already define this term.
• Section 23 of the Toys Regulations, section 3 of the Cribs, Cradles and Bassinets Regulations, section 2 of the Expansion Gates and Expandable Enclosures Regulations and section 3 of the Playpens Regulations:
  • identify that a surface coating material and an accessible part have the same meaning as in section 1 of the Surface Coating Materials Regulations;
  • describe a coating material applied to a product to mean a surface coating material as well as a sticker, film or other comparable material (such as a decal) that can be removed from the surface;
  • limit the requirements for total lead and mercury content and for the migration of any compound of antimony, arsenic, cadmium, selenium or barium to coating materials applied to accessible parts of the products;
  • require testing to be done in accordance with a method that conforms to good laboratory practices as defined in section 1; and
  • delete the outdated hydrochloric acid test parameters specified for measuring the migration of any compound of antimony, arsenic, cadmium, selenium or barium. Industry will now be able to test with a method they commonly use for this purpose for products destined for the United States, the European Union or other jurisdictions, for example the methods set out in ASTM F963, Standard Consumer Safety Specification for Toy Safety; in EN 71-3, Safety of toys – Part 3: Migration of certain elements; and in ISO 8124-3, Safety of toys — Part 3: Migration of certain elements.

The Regulations also include the following housekeeping amendments:

• In section 5 of the Surface Coating Materials Regulations a typographical error in the English version is corrected by replacing “more that 10 mg/kg total mercury” with “more than 10 mg/kg total mercury.”
• In section 23 of the Toys Regulations, section 3 of the Cribs, Cradles and Bassinets Regulations, section 2 of the Expansion Gates and Expandable Enclosures Regulations and section 3 of the Playpens Regulations:
• change the total mercury limit from 0 mg/kg to a technically feasible level of 10 mg/kg, which takes into account naturally occurring background mercury levels. This limit is appropriately protective of human health. It already was the maximum allowable content of mercury in surface coating materials under the previous Surface Coating Materials Regulations and had been applied as the enforceable limit for total mercury in surface coating materials applied to products subject to the requirements of the previous Toys Regulations; Cribs, Cradles and Bassinets Regulations; Expansion Gates and Expandable Enclosures Regulations; and Playpens Regulations (as well as the Carriages and Strollers Regulations, through their reference to the Toys Regulations); and
• express the migration limit for antimony, arsenic, cadmium, selenium and barium as 1 000 mg/kg instead of the previous 0.1% weight/weight equivalent, to be consistent with the units of measure for total lead (90 mg/kg) and total mercury (10 mg/kg).
• In section 1 of the Toys Regulations, small, non-substantive grammatical corrections were made in paragraphs (a) and (b).

Regulatory development

Consultation

Aside from contacting stakeholders during the cost-benefit analysis, Health Canada did not formally conduct a pre-consultation with stakeholders on the regulatory proposal. However, the proposal was posted on Health Canada’s Forward Regulatory Plan beginning in April 2018, and no stakeholders raised any issues or concerns with Health Canada regarding the initiative. Additionally, no concerns with the proposed amendments were raised by stakeholders who participated in the cost-benefit analysis for the proposal, which included businesses from the affected industry sectors. One stakeholder from the toy sector indicated support for the Department’s intent to discontinue the requirement for the hydrochloric acid test to assess the migration of antimony, arsenic, cadmium, selenium and barium from surface coating materials applied to toys and various other children’s products.

Publication in the Canada Gazette, Part I

The proposed Regulations were published in the Canada Gazette, Part I, on April 24, 2021, followed by a 70-day comment period.

Stakeholders consulted on the regulatory proposal included

• businesses that manufacture, import, distribute, sell or advertise the products affected by the proposal, including paints and other applied coating materials, furniture, products for children, pencils and artist brushes;
• laboratories that test the products affected by the proposal;
• public interest groups that focus on public health, particularly that of children;
• the Canadian public, particularly parents and other caregivers of children;
• Indigenous peoples; and
• other interested parties.

A number of mechanisms were used to inform stakeholders of the publication and to invite them to submit comments on the proposal:

• On April 23, 2021, a link was added to the Government of Canada’s “Health-related consultations” webpage, in English and French, with a brief description of the proposed Regulations, a link to the publication and a request for comments.
• On April 23, 2021, a link was added to the Government of Canada’s “Consulting with Canadians” webpage in English and French.
• On April 23, 2021, a link was added to the Government of Canada’s “Consumer products and cosmetics” webpage in English and French.
• On April 26, 2021, a bilingual message was sent by email. The message informed recipients of the proposed Regulations and the instructions for submitting comments. Recipients were encouraged to forward the email to other interested parties. The message was sent to
  • approximately 14 090 subscribers of the Health Canada’s Consumer Product Safety News;
  • approximately 1 860 subscribers of the Health Canada’s CCPSA News; and
  • approximately 400 stakeholders (industry associations, industry members, laboratories, public health stakeholders and international partners).
• On April 27, 2021, Global Affairs Canada issued a notification, in English and French, of the proposed Regulations according to the standard procedures for notification of the World Trade Organization Technical Barriers to Trade Committee.
• On April 28, 2021, a bilingual message was sent by email to approximately 3 800 subscribers of the Consultation and Stakeholder Information Management System providing a link to the publication.

The Government of Canada is moving towards the use of an online platform for stakeholders to comment on proposed Regulations published in the Canada Gazette, Part I, directly through the website. The new commenting feature will result in a consistent, predictable approach for stakeholders engaged in regulatory consultations by providing a central platform to support transparent, open, online regulatory consultation and facilitate the posting of comments. The consultation for the publication of the proposed Regulations was part of the initial pilot project that used the new online platform. Stakeholders were directed to use the online platform in all of the aforementioned communication mechanisms. Comments were also accepted via email and mail. All comments submitted through the online platform were posted on the Canada Gazette website on August 9, 2021, and remain available for public viewing.

A total of 11 stakeholders provided comments during the consultation. Out of the responses received, 10 were submitted via the online platform and one response was submitted via email. All comments were reviewed and taken into consideration.

Several comments were received from stakeholders who voiced their general support for the proposal. One stakeholder communicated that the changes will align with international requirements and will have a positive economic impact (specifically for the toy industry), while still maintaining safety. Several comments included requests to clarify terms used in the Regulations. Some stakeholders communicated their concern that the proposal did not apply to inaccessible parts and the potential effect of this on human health or the environment. Comments related to testing and alignment with existing voluntary industry standards were also received. Another comment suggested that the requirements related to applied coating materials be set out in the Consumer Products Containing Lead Regulations.

Health Canada has considered all comments received during the prepublication consultation. The majority of comments received were of a technical nature and Health Canada’s responses are described below.

Applicability to parts that are or become accessible with reasonably foreseeable use

Some comments were submitted regarding the applicability of the requirements only to parts that are or become accessible with reasonably foreseeable use and concerns regarding potential exposures and effects to human health or the environment. In addition, one stakeholder suggested requiring warning labels if there are harmful materials present on inaccessible parts and the product is recycled or refurbished.

Response: Health Canada has carefully considered the comments but has not modified the Regulations concerning the applicability of the requirements only to applied coating materials on product parts that are accessible with reasonably foreseeable use.

Under the Regulations, an accessible part “means any part of a product that may be touched, licked, mouthed or swallowed during the reasonably foreseeable use of the product.” The Regulations restrict lead, in the case of furniture, products for children, pencils and artist brushes, or lead, mercury, and certain other harmful elements in applied coating materials on product parts that are or become accessible during reasonably foreseeable use, which includes foreseeable misuse, of the product.

In the application of the CCPSA, the concept of normal or foreseeable use includes foreseeable misuse. It includes any use or misuse of the product that could be reasonably predicted. Foreseeable misuse may include uses other than the manufacturer’s intended use, incorrect use of a product that could be reasonably anticipated and a reasonably predictable product modification, but it will often exclude gross negligence or criminal activity. More information on these terms can be found in Health Canada’s industry guide.

Parts that remain inaccessible during reasonably foreseeable use of a consumer product pose little risk to human health because there is no exposure to these elements; therefore, inaccessible parts are not required to meet the established limits. The focus on accessible parts aligns with

• the CCPSA’s regulation-making authority and Health Canada’s risk-based approach to protecting the health or safety of the public:
• the Consumer Products Containing Lead Regulations under the CCPSA, which set out lead content limits for parts of products that are accessible with reasonably foreseeable use; and
• the general lead ban for children’s products under the United States CPSIA, which does not apply to inaccessible component parts.^{footnote 6}

Various standard testing methods may be used to assess the reasonably foreseeable use of a consumer product. It is the responsibility of industry members to conduct appropriate testing and to ensure that their product does not present hazards when it is used in a reasonably foreseeable way, which includes recognizing that a child will not necessarily interact with a consumer product in the same manner as an adult.

If the reasonably foreseeable use of a consumer product includes repair and maintenance, all accessible parts with applied coating materials would be subject to the applicable regulations. Product users should consult the manufacturer or follow the manufacturer’s directions before using or attempting to repair a consumer product. If a part becomes accessible during the reasonably foreseeable use of a consumer product throughout its lifespan, then the regulatory requirements for applied coating materials would apply, and compliance and enforcement action may be taken to mitigate health risks.

The purpose of the CCPSA, as stated in section 3, is “to protect the public by addressing or preventing dangers to human health or safety that are posed by consumer products in Canada, including those that circulate within Canada and those that are imported.”

The regulation-making authorities under the CCPSA refer back to the purpose of the Act and do not extend to protecting the environment. Notwithstanding, a Strategic Environmental Assessment (SEA) was completed, in accordance with the Government of Canada’s Cabinet Directive on Regulations, to assess the environmental impacts of the regulatory proposal. The results of the SEA found that a detailed analysis of environmental impacts was not warranted because the proposal was not expected to have a significant environmental impact.

Defining terms used in the Regulations (furniture, sticker, surface coating materials, accessible parts)

Several stakeholders requested clarification or definitions for some of the terms used in the Regulations, including furniture, sticker, surface coating material versus applied surface coating material, accessible part with respect to accessibility probes, and removable coating. Some of the stakeholders further requested alignment with foreign legislation and voluntary industry standards for several of the terms.

Response: Furniture

The term “furniture” is included in the Surface Coating Materials Regulations but is not defined. The Department of Justice drafting guide titled “Legistics” states

“Definitions in legislative texts are stipulative; they state what a term is to mean in the text. They are only required if they depart from the commonly understood meaning of the term. Definitions included in legislative texts must never simply reiterate the content of a dictionary or state the obvious. If the meaning of a term is well understood by the intended audience and unambiguous, don’t define the term. It is not necessary to define a term simply because it is a technical, scientific or other term of art. Legislative counsel should systematically avoid defining terms that do not depart from their ordinary meaning.”

The term “furniture” is well understood and a regulatory definition is not included in the Surface Coating Materials Regulations.

Health Canada has noted the comments regarding the scope of furniture under the Surface Coating Materials Regulations.

Response: Stickers

The Regulations now expand the meaning of decorative coatings to include coatings in the form of stickers, films, and other similar materials (such as decals) that are applied to consumer products during manufacture and can be removed from the surface. Health Canada has noted the comments regarding the term “sticker” as referenced in these Regulations. However, Health Canada made no changes to the amendments, as the Regulations are sufficiently clear. Health Canada considers unique aspects of consumer product issues on a case-by-case basis when assessing risks to human health or safety.

Response: Surface coating materials versus applied coating materials

The Regulations now define a surface coating material such that it includes a broader range of coating materials, and is not limited to those only in liquid form. A surface coating material is now defined as “a paint or other similar material, with or without pigment, that forms a solid film after it is applied to a surface and that can be removed.”

A surface coating material must not contain more than 90 mg/kg total lead and must not contain more than 10 mg/kg total mercury. The lead limit does not apply if a surface coating material is used only for the purposes listed in section 2 of the Surface Coating Materials Regulations, but those corresponding consumer products are required to be labelled with a warning as per sections 3 and 4 of the same Regulations.

An applied coating material on a consumer product can include a sticker, film or other similar material that can be removed, or a surface coating material that is applied to the product. Under the Surface Coating Materials Regulations, applied coating materials on accessible parts of pencils, artist brushes, furniture, and products for children must not have more than 90 mg/kg total lead. Applied coating materials on accessible parts of consumer products under the scope of the Toys Regulations, the Carriages and Strollers Regulations, the Cribs, Cradles and Bassinets Regulations, the Expansion Gates and Expandable Enclosures Regulations, and the Playpens Regulations have restrictions on certain other harmful elements and mercury, in addition to lead restrictions. Consumer products with applied coating materials, which are not under the scope of the aforementioned regulations, may be subject to other regulatory requirements or other sections in the CCPSA, including sections 7 and 8.

Response: Accessible part with respect to accessibility probes

The definition of accessible part in the Regulations is aligned with the existing definition of accessible part in the Consumer Products Containing Lead Regulations: “any part of a product that may be touched, licked, mouthed or swallowed during the reasonably foreseeable use of the product.”

It is industry’s responsibility to ensure that their consumer products do not present hazards when they are used in a reasonably foreseeable manner, which includes foreseeable misuse, and to recognize that a child will not necessarily interact with a consumer product in the same manner as an adult. For the purpose of the Regulations, a part is considered to be accessible if it can come into contact with a mouth (by licking, chewing, sucking or swallowing) or a hand (by touching). Accessibility of a product part may be determined by using appropriate test methods, including visual examination of the product, or by using an accessibility probe that simulates the size of a child’s finger. Accessibility assessments should also take into consideration the results of standardized testing for reasonably foreseeable use and abuse. The Regulations do not specify test methods to be used; however, the test methods used must comply with the OECD Principles of Good Laboratory Practice.

Response: Coatings that can be removed

Requirements under these Regulations apply to a surface coating material or a coating material that can be removed after it is applied to the surface of a consumer product. Removal methods can include scraping, the use of heat or a solvent, or a combination of methods. Care should be taken during the process to ensure that the applied coating material is removed and not any of the underlying substrate material. The appropriate method of coating removal can vary depending on the coating and the product and thus a specific method is not included in the Regulations. Stakeholders can reference methods outlined in appropriate voluntary standards or Health Canada’s Product Safety Laboratory test methods. The test methods used must comply with the OECD Principles of Good Laboratory Practice.

Clarification on technical methods and acceptable testing for applied coating materials

Several comments were received requesting clarification on technical requirements and test methods. A comment was received inquiring about how stickers that are comprised of different materials should be tested. Two stakeholders agreed with the elimination of the 5% (v/v) hydrochloric acid test parameters in favour of a test method that conforms to OECD Principles of Good Laboratory Practice for measuring migratable limits of antimony, arsenic, cadmium, selenium and barium. One of the stakeholders suggested that the allowable limits for the harmful elements be reduced to reflect the removal of the specified test parameters. Another stakeholder suggested that a test for migratable limits be specified in the legislation and that it aligns with ASTM F963. A comment was also received requesting the acceptance of test results from laboratories accredited to ISO 17025:2017.

Response: Testing requirements based on sticker composition

The Regulations include restrictions for certain elements in a coating material, such as a sticker, film or similar material, applied to the surface of a consumer product that can be removed. The removed coating material must meet the restrictions set out in the Regulations and this can be verified through testing that conforms to OECD Principles of Good Laboratory Practice. The Regulations do not specify exemptions for compositions of surface coatings applied to consumer products. If a coating can be removed, then in order to protect the health of the public, especially children, it is subject to the requirements.

Response: Reductions of the regulatory limits for antimony, arsenic, cadmium, selenium and barium

The consequential regulatory amendments remove the 5% (v/v) hydrochloric acid test parameters specified for measuring the migration of any compound of antimony, arsenic, cadmium, selenium and barium. As a result, industry will be able to use a test method of their choice that conforms to the OECD Principles of Good Laboratory Practice.

In addition, the consequential regulatory amendments revise the expression of the migration limits for antimony, arsenic, cadmium, selenium and barium to 1 000 mg/kg instead of the former 0.1% weight/weight equivalent to be consistent with the units of measure for total lead (90 mg/kg) and total mercury (10 mg/kg). Health Canada has noted the request that it consider reducing the migratable limit of certain harmful elements. Health Canada will continue to monitor evidence around the health effects of these elements, but does not have evidence that the existing limits do not adequately protect human health. In addition, Health Canada considers unique aspects of consumer product issues on a case-by-case basis, as well as new information, when assessing risk and may take compliance and enforcement action where necessary to mitigate a danger to human health or safety using existing authorities under the CCPSA.

Response: ISO 17025:2017 and alignment of test methods

The Regulations require that tests be conducted in accordance with a method that conforms to the OECD Principles of Good Laboratory Practice rather than setting out a specific test method. A reference to the OECD Principles of Good Laboratory Practice was already required in the previous Surface Coating Materials Regulations and it exists in other regulations under the CCPSA, such as the Children’s Jewellery Regulations, the Glazed Ceramics and Glassware Regulations and the Phthalates Regulations. The approach to reference the OECD Principles of Good Laboratory Practice versus a specific method should improve the reliability of test results, and will reduce the need for duplicate testing of a consumer product, which will reduce regulatory burden and facilitate international trade.

Regulated parties are responsible for ensuring that the consumer products they manufacture, import, advertise or sell in Canada are compliant with the CCPSA and applicable regulatory requirements. Testing a consumer product against the requirements of applicable regulations under the CCPSA is a means of verifying compliance with the requirements. While not required by the Regulations, a regulated party could conduct such testing before they market a consumer product in Canada. Furthermore, the CCPSA section 12 provides the authority for Health Canada to order anyone who manufactures or imports a consumer product into Canada for commercial purposes to: conduct tests or studies on the product in order to obtain the information that Health Canada considers necessary to verify compliance or prevent non-compliance with the Act or the regulations; compile any information that Health Canada considers necessary to verify compliance or prevent non-compliance with the Act or the regulations; and provide Health Canada with the documents that contain that information and the results of the tests or studies.

Addition of restrictions for chromium

One stakeholder suggested adding chromium to the list of other harmful elements subject to a migratable content limit for a sticker, film or other similar material that can be removed, or an applied surface coating material.

Response: Health Canada has carefully considered the comment but has not modified the Regulations to include a restriction for chromium. Health Canada will continue to monitor emerging evidence around the health effects of certain harmful elements. Health Canada may consider adding restrictions for additional harmful elements in the future. While the Regulations do not introduce a restriction for chromium, the CCPSA continues to prohibit the manufacture, importation, advertisement or sale of any consumer product that is a danger to human health or safety. If Health Canada becomes aware of a consumer product that is a danger to human health or safety, it can exercise provisions in the CCPSA to help manage risks to the public.

Comment on appropriate regulation to use for applied coating materials

One stakeholder suggested that the requirements for coating materials applied to products for children be set out in the Consumer Products Containing Lead Regulations.

Response: Multiple regulations made under the CCPSA may apply to the same consumer product. For example, both the Surface Coating Materials Regulations and the Consumer Products Containing Lead Regulations include a 90 mg/kg total lead limit. However, the Consumer Products Containing Lead Regulations only cover certain products for children, as described in section 1 of the regulations. The amended Surface Coating Materials Regulations bridge the gap by including requirements for applied coating materials on all consumer products for children, in addition to pencils, artist brushes and furniture that might not fall under the scope of the Consumer Products Containing Lead Regulations.

Modern treaty obligations and Indigenous engagement and consultation

In accordance with the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, an initial assessment was conducted on the regulatory proposal. The assessment concluded that implementation of the Regulations will be unlikely to impact on the rights, interests or self-government provisions of treaty partners. All people of Canada, including Indigenous peoples, will benefit from the product safety approach taken in the Regulations to further reduce exposure to lead, mercury and certain other harmful elements in consumer products.

On May 5, 2021, Health Canada contacted the First Nations Gazette and requested their consideration of the publication of the regulatory proposal. Health Canada was subsequently informed by the managing editor of the First Nations Gazette that the proposal was out of the scope of the publication. On May 19, 2021, Health Canada contacted approximately 10 organizations that work with Indigenous populations as identified by Health Canada’s Office of Indigenous Affairs and Engagement to inform them of the consultation on the regulatory proposal and included instructions for submitting comments. Recipients were encouraged to forward the email to other interested parties. In addition, Health Canada contacted Indigenous Services Canada to inform them of the consultation on the regulatory proposal. No comments were received related to Indigenous issues or modern treaties concerns.

Instrument choice

Health Canada considered the following options:

• Maintain status quo — Health Canada would continue to monitor the compliance of surface coating materials, as currently defined in the Surface Coating Materials Regulations, and of consumer products with an applied surface coating material that are currently regulated, and take corrective actions when necessary. For products that are subject to the Consumer Products Containing Lead Regulations or the Corded Window Coverings Regulations, the allowable total lead limit indicated in these regulations applies to any accessible part of the product, including powder coating materials, stickers and films that were not covered by the Surface Coating Materials Regulations. For products that are subject to the Children’s Jewellery Regulations, the allowable total lead limit applies to any part of the product. For other consumer products found to contain more than 90 mg/kg total lead but that were not covered by the existing regulations — such as powder coating materials containing more than 90 mg/kg total lead; products for children, pencils or artist brushes with an applied sticker or film containing more than 90 mg/kg total lead; or items of furniture with an applied coating material containing more than 90 mg/kg total lead — the general prohibitions in sections 7 and 8 of the CCPSA would be relied upon to remove the products from the Canadian market. However, industry has indicated that regulations provide more clarity and transparency compared to the general prohibitions. The Department would continue to provide industry with general information about the CCPSA and its regulations.
• Some regulated parties may have difficulty understanding requirements that are not clearly, completely and consistently set out. The requirements would also have continued to apply to inaccessible parts and the outdated hydrochloric acid test would continue to be mandatory, both of which imposed costs for industry without providing health benefits for the public. For these reasons, maintaining status quo was not the preferred option.
• Amend the Surface Coating Materials Regulations and make consequential amendments to the applied coating material sections of the Toys Regulations; the Cribs, Cradles and Bassinets Regulations; the Expansion Gates and Expandable Enclosures Regulations; and the Playpens Regulations — The preferred option was to amend existing regulatory requirements with relatively simple changes, which included modifying definitions, incorporating definitions and requirements from other regulations under the CCPSA, expanding the product scope and ensuring consistency across regulations. Lead is a high priority health and safety concern due to its toxic effects, particularly in children. Lead in consumer products is also a hidden hazard, meaning that consumers cannot identify whether a product contains lead by looking at it. Labelling for the presence of lead was an option that was considered. It is a sound risk management option for certain specialty surface coating materials for which suitable non-lead substitutes may not be available, as set out in subsection 2(2) of the Surface Coating Materials Regulations. However, labelling for the presence of lead does not provide adequate protection for consumer products with which children interact (such as toys and other children’s products) or to which they may otherwise be exposed (such as household furniture) because labelling does not directly reduce exposure to lead and places more of the burden of risk management on parents and caregivers.
• The option to amend the aforementioned regulations under the CCPSA was chosen because clear and consistent regulatory requirements help regulated parties comply and help Health Canada officials engaged in compliance and enforcement activities take quick corrective action in the event of non-compliance, which helps protect the health and safety of Canadians.

Regulatory analysis

Benefits and costs

In 2019, Health Canada retained Cheminfo Services Inc. of Markham, Ontario, to analyze the costs and benefits associated with the regulatory proposal. The cost-benefit analysis (CBA) report is available upon request from the contact listed at the end of this Regulatory Impact Analysis Statement.

Costs

Between June and October 2019, 63 businesses and associations that will be impacted by the Regulations were contacted and asked to complete a questionnaire focused on identifying cost impacts. The responses are summarized as follows:

• four powder coating suppliers indicated that their powder coatings sold in Canada already met the proposed requirements and they will not face significant costs as a result of the Regulations;
• four furniture suppliers indicated that the coating materials applied to their products sold in Canada already met the proposed requirements and/or they will not face significant costs as a result of the Regulations;
• two suppliers of pencils and/or artist brushes indicated that the coating materials applied to their products sold in Canada already met the proposed requirements and/or they will not face significant costs as a result of the Regulations;
• three toy suppliers, and one toy association on behalf of its members, indicated that the coating materials applied to their products sold in Canada already met the proposed requirements and they will not face significant costs as a result of the Regulations; and
• of six suppliers of cribs, playpens, expansion gates and/or strollers, five suppliers indicated that the coating materials applied to their products sold in Canada already met the proposed requirements and one supplier indicated that they did not meet the proposed requirements. Eleven-year costs, including costs assumed to have already been incurred in 2021 and 10 years of ongoing costs assumed to be incurred after the Regulations are approved, across the four product groups, based on the survey responses and extrapolated to the national market, were estimated to be $2,957,000 (2019 Canadian dollars, non-discounted), and were highest for suppliers of cribs and expansion gates ($1,430,000 and $1,005,000, respectively) and lowest for suppliers of playpens and strollers ($400,000 and $122,000, respectively). According to the suppliers, these costs will cover modifications to surface coating materials to meet the Regulations, oversee compliance and test to good laboratory practices. Costs that are assumed to have already been incurred are non-recoverable (sunk costs). They are included in this report for transparency reasons, however, are not relevant for decision-making purposes. These costs are therefore not accounted for in reported total present values.

The CBA assumed no incremental costs to Government as a result of the Regulations. The costs to administer, promote and enforce the Regulations will become part of Health Canada’s existing compliance and enforcement program for consumer products.

For additional details of the estimated costs, refer to tables 1–3 in the “Cost-benefit analysis” section.

Benefits

The Regulations are expected to generate benefits primarily by reducing the adverse health effects in Canadians caused by exposure to lead, mercury and certain other harmful elements. The main target of lead is the nervous system, both in children and adults. Even low levels of lead exposure can affect a child’s mental and physical development, with small but measurable effects on cognition (for example reduced performance on standardized tests of general intellectual ability) and behaviour (for example attention disorders and delinquency). At high levels of exposure, lead can damage the brain and kidneys in both children and adults, and cause miscarriage and stillbirth in pregnant women, infertility in both women and men, and death. Although lead content is already regulated in many surface coating materials and products with an applied coating material, the Regulations require industry to restrict the use of lead in a broader range of consumer products. They also give Health Canada the authority to identify consumer products within this broader range of products that contain more than the maximum allowable content of lead and quickly take enforcement action to reduce the likelihood of exposure.

The Regulations may also have economic benefits in terms of cost savings for some Canadian suppliers of children’s products, pencils, artist brushes and furniture by removing requirements for applied coating materials on parts of products that are not accessible during the reasonably foreseeable use of the product and by deleting the outdated hydrochloric acid test for certain harmful elements and allowing testing to be done in accordance with international standards. These benefits were not quantified or monetized.

Cost-benefit analysis

An accounting statement for the 10-year period from 2022 to 2031 is provided in tables 1 and 2 (by region), and a breakdown of estimated costs by activity for the sectors most impacted by the Regulations is provided in Table 3. To calculate the costs, it was assumed that the Regulations would come into force at the beginning of 2022 and that (1) one-time costs of coming into compliance would be carried in 2021, before the amendments come into force; (2) annual costs of compliance would be carried starting in 2021 to ensure that products are compliant when the amendments come into force; and (3) testing costs would be carried in 2021 and every two years thereafter.

As shown in the tables, it is estimated that the Regulations will have 11-year costs of $2,957,000 (2019 Canadian dollars) or 10-year (excluding sunk costs) discounted costs of $1,784,740 (2019 Canadian dollars discounted at an annual rate of 7%). It is possible that some Canadian retailers have inventory of non-compliant products that cannot be sold before the Regulations come into force and must be disposed of, which will be an additional but unknown cost.

As noted in the “Costs” section above, costs will be negligible for suppliers of surface coating materials, furniture, pencils, artist brushes and toys. For suppliers of cribs, cradles and bassinets; playpens; expansion gates and expandable enclosures; and carriages and strollers, costs will be relatively small and can be passed on to Canadian consumers of the affected products, but the increase in consumer costs is expected to be insignificant.

The most significant impacts are expected in Canada’s furniture manufacturing sector since about 95% of the costs of the Regulations are attributed to costs to manufacturers of cribs, cradles and bassinets; playpens; and expansion gates and expandable enclosures, which are subsectors of the furniture manufacturing sector. The largest impacts will be in Quebec and Ontario, where most of the manufacturers are located.

It is noted in the CBA report that the results of this analysis are based on relatively few inputs from stakeholders, and are therefore subject to a relatively wide margin of error.

Accounting statement — Section A: Cost-benefit analysis (monetized values)

• Number of years: 10 (2022–2031 inclusively)
• Base year for costing: 2019
• Present value base year: 2022
• Discount rate: 7%

Table 1: Monetized costs

Impacted stakeholder	Description of cost	2022	2025	2031	Total (present value)	Annualized value
Industry (suppliers of cribs, playpens, expansion gates and/or strollers)	Modifications to surface coating materials to meet the Regulations, oversee compliance and good laboratory testing practices	$200,000	$312,000	$312,000	$1,784,740	$254,110
All stakeholders	Total costs	$200,000	$312,000	$312,000	$1,784,740	$254,110

Table 2: Accounting statement — Section B: Stakeholder analysis (impacts on business by region)

Category	2021 – (sunk costs)	Year 1 (2022)	Year 2 (2023)	Year 10 (2031)	11 Year total table b2 note a	Total (present value) table b2 note b	Annualized value table b2 note c
Atlantic	$14,356	$7,232	$11,282	$11,282	$106,929	$64,538	$9,189
Quebec	$143,146	$72,114	$112,498	$112,498	$1,066,203	$643,521	$91,623
Ontario	$137,763	$69,402	$108,267	$108,267	$1,026,109	$619,321	$88,177
Prairies	$45,691	$23,018	$35,908	$35,908	$340,323	$205,407	$29,245
British Columbia	$55,630	$28,025	$43,719	$43,719	$414,352	$250,088	$35,607
Territories	$414	$209	$325	$325	$3,084	$1,861	$265
Total	$397,000	$200,000	$312,000	$312,000	$2,957,000	$1,784,736	$254,106
Table b2 note(s) Table b2 note a 11 year total is not discounted and includes sunk costs (costs assumed to have already been incurred). Return to table b2 note a referrer Table b2 note b The total present value was calculated over a period of 10 years (2022–2031), and excludes sunk costs (costs assumed to have already been incurred). Return to table b2 note b referrer Table b2 note c The annualized value calculation is based on 2022 being t = 1, the number of periods n = 10, and a discount rate of 7%. Return to table b2 note c referrer

Notes:

• Costs are allocated to the regions based on the regional proportion of businesses in NAICS 3371 (Household and Institutional Furniture and Kitchen Cabinet Manufacturing).
• Impacts on consumers: Very small (average annual costs of $265,000 mean yearly costs of less than 1% per Canadian).
• Impacts on governments: Nil
• Impacts on the environment: Minimal (but positive through avoided use of certain hazardous elements such as lead and mercury).

Table 3: Compliance costs by activity

Type of cost	Cribs	Playpens	Expansion gates	Strollers	Total
One-time compliance costs	$55,000	$15,000	$15,000	$0	$85,000
Annual compliance costs	$65,000	$35,000	$90,000	$10,000	$200,000
Biennial good laboratory practice testing costs	$110,000	$0	$0	$2,000	$112,000
Total first-year costs (2021)	$230,000	$50,000	$105,000	$12,000	$397,000
Total 11-year costs (2022–2031 discounted)	$1,430,000 ($829,767)	$400,000 ($245,825)	$1,005,000 ($632,122)	$122,000 ($77,022)	$2,975,000 ($1,784,736)

Notes:

• Values are in 2019 Canadian dollars, except for the values in parentheses, which are in 2019 Canadian dollars discounted at an annual rate of 7%.
• Time period: 2021–2031 for non-discounted totals and 2022–2031 for total present values.

Small business lens

While no noticeable differences in compliance costs have been identified among individual businesses, total costs are still estimated to be highest for small businesses since 98.7% of businesses in the sectors most impacted by the Regulations are small. Because of this, the majority of costs resulting from these regulations are imposed on small businesses, for a total of $2.6 million (2019 Canadian dollars, non-discounted, including costs already incurred). When discounted and when excluding sunk costs, this is equal to $1.76 million or an annualized amount of $251 000.

According to the CBA report, many industry members already comply with the amended requirements. Nevertheless, the Regulations come into force on the 180th day after the day on which they are published in the Canada Gazette, Part II, to give small businesses sufficient time to comply with the new requirements. Cost savings from the deletion of the hydrochloric acid test for certain harmful elements in applied surface coating materials and from the removal of requirements for applied coating materials on inaccessible parts of consumer products will also help to reduce the burden on small businesses.

No flexible mechanism has been proposed to mitigate costs for small businesses. Options such as delaying the timing of required compliance with the proposed amendments for small businesses (as a flexible option) were not considered given the importance of helping to protect Canadians, especially children, from the adverse health effects of exposure to lead, mercury and certain other harmful elements in applied surface coating materials. No additional special considerations or flexibilities were considered appropriate for the Regulations.

Small business lens summary

• Number of years: 10 (2022 to 2031)
• Base year for costing: 2019
• Present value base year: 2022
• Discount rate: 7%

Table 4: Compliance costs

Activity	Annualized value	Total present value
Modifications to surface coating materials to meet the Regulations, oversee compliance and good laboratory testing practices	$250,803	$1,761,535
Total compliance cost	$250,803	$1,761,535

One-for-one rule

The Regulations do not affect the administrative burden on businesses, as there are no associated reporting or record-keeping requirements. Health Canada is not implementing new or incremental requirements to demonstrate compliance, including collecting, processing, reporting or retaining information.

Regulatory cooperation and alignment

Both Canada and the United States stringently regulate the maximum allowable lead content in surface coating materials and in applied coating materials on various consumer products. The Regulations improve alignment and reduce existing gaps in the regulatory framework between the two countries, for example by expanding the meaning of a surface coating material, adding furniture to the product scope and removing requirements for coating materials on inaccessible parts of products. This is expected to facilitate trade with the United States. In addition, requiring testing to good laboratory practices allows for testing to international standards, and deleting the hydrochloric acid test for certain harmful elements in applied coating materials, which was specified only under Canadian regulations, removes any need for trading partners who have tested to the requirements of another jurisdiction to do additional testing on consumer products imported into Canada. However, some differences remain between Canada and the United States in the regulation of applied coating materials, such as Canada’s restriction on lead in applied coating materials on all pencils and artist brushes, which has been in force since 1973 to protect Canadian children from the potential of lead exposure from mouthing or chewing on these products.

Strategic environmental assessment

In accordance with the Government of Canada’s Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a SEA detailed analysis was not required.

Gender-based analysis plus (GBA+)

Lead can be harmful to the health of people of all ages, regardless of sex or gender, but infants and children are especially susceptible to the neurodevelopmental effects of lead exposure, such as developmental delays, attention-related behaviours and learning difficulties. Compared to adults, children absorb more lead through the gastrointestinal tract and excrete less lead through the kidneys, and their developing organs and systems are more susceptible to lead’s toxic effects. Furthermore, lead builds up in the body, so that ongoing exposure to even low levels of lead may be harmful. Young children also have a higher probability of lead exposure compared to older children and adults because of their natural exploratory behaviour, which leads them to chew or suck on any objects within their reach. Lead has a sweet taste and this can encourage children to lick, chew or suck on items containing it. This mouthing behaviour could result in lead ingestion.

According to the Government of Canada’s Final Human Health State of the Science Report on Lead published in 2013, the selection of children as a susceptible subpopulation is considered to be protective for adverse effects of lead across the entire population.

Implementation, compliance and enforcement, and service standards

The Regulations are made under the authority of the CCPSA, and will come into force on the 180th day after the day on which they are published in the Canada Gazette, Part II. During the period between publication in the Canada Gazette, Part II, and the coming-into-force date, the existing regulations will remain in force.

Health Canada will develop information materials to help industry stakeholders understand and comply with the amended requirements. The test methods used by Health Canada’s Product Safety Laboratory to determine total lead (methods C02.2, C02.2.1, C02.2.2) and total mercury (Method C07) in surface coating materials and coating materials applied to consumer products (such as stickers and films) are available upon request from the Government of Canada.

Compliance and enforcement activities will follow established Health Canada approaches and procedures, including sampling and testing of consumer products, inspections at business locations, follow-up on incidents reported by the Canadian public and public health organizations, and follow-up on mandatory incident reports by industry. Non-compliant consumer products will be subject to the enforcement actions available to Health Canada inspectors under the CCPSA, and may include voluntary commitment to product correction by industry, negotiation with industry for the voluntary removal of non-compliant products from the market, seizure, orders for recall or other measures, administrative monetary penalties or prosecution.

Contact

Vera Li
Consumer and Hazardous Products Safety Directorate
Healthy Environments and Consumer Safety Branch
Health Canada
269 Laurier Avenue West
Ottawa, Ontario
K1A 0K9
Address locator: 4908B
Email: vera.li@hc-sc.gc.ca