Written By Venetia Whiting, Jessica Horwitz and Claire Lingley
In case you missed it, new limits were introduced on formaldehyde emissions from composite wood products imported into, sold or manufactured in Canada.
The Formaldehyde Emissions from Composite Wood Products Regulations (CANFER or the Regulations), which came into force on January 7, 2023, impose requirements on manufacturers, importers and sellers of composite wood products relating to emissions testing and limits, certification, labelling, reporting and record keeping. CANFER applies to composite wood products containing formaldehyde, and includes composite wood panels, laminated products, component parts and finished goods such as furniture.
Formaldehyde is a preservative often used as a component of glues or bonding agents and is used in creating composite wood products (including furniture, flooring, trim and wall panelling) by gluing together multiple smaller pieces of wood. Composite wood products are a substantial part of Canada's import and export market—in 2017, for example, Canada imported $3.5 billion worth of manufactured wood products (primarily from the United States and China) and produced $17.4 billion worth of manufactured wood products for export.
Over time, such composite wood products can emit formaldehyde, contributing to elevated formaldehyde levels in homes. According to Environment and Climate Change Canada (ECCC), too much formaldehyde can cause a number of human health concerns, including acute irritation, chronic respiratory symptoms, and allergic sensitivity..
Prior to CANFER, beyond a voluntary standard developed in 2016, there were no formal limits on the amount of formaldehyde that could be used in composite wood products imported, sold or offered for sale in Canada, nor on the level of formaldehyde emissions from such products. Comparatively, since 2010, the United States Environmental Protection Agency has required composite wood products sold in or imported into the United States to comply with emission standards prescribed under Toxic Substances Control Act Title VI (TSCA Title VI). This regulatory discrepancy between Canada and the United States meant that manufacturers, importers or sellers of composite wood products across both countries faced the added burden (both financial and administrative) of complying with conflicting regulatory requirements.
According to ECCC, CANFER has two main objectives:
- to reduce the potential risks to the health of Canadians from formaldehyde exposure; and
- to align Canadian requirements for composite wood products with similar requirements in the United States, in an effort to create a "level playing field among Canadian, American and international businesses".
Under CANFER, any individual or company who manufactures, imports or sells composite wood products must now comply with the following regulatory requirements:
1. Emissions Limits and Testing
CANFER establishes emissions limits for the following types of composite wood panels: hardwood plywood (HWPW), medium-density fireboard (MDF), thin MDF, particleboard and laminated products. CANFER does not apply to HWPW with cores made of hardboard or lumber.
To ensure such composite wood panels do not emit formaldehyde above the regulated limits, manufacturers of these products must test their products according to CANFER's specific testing methods and frequencies. This includes primary testing, to be carried out by the manufacturer four times annually, as well as quality control (QC) testing. Tests must be performed by an accredited laboratory that meets the specific requirements set out in CANFER. Importers and resellers of foreign-manufactured products need to similarly ensure that appropriate testing has been conducted by the foreign manufacturer, and obtain and maintain documentation, including the testing results and the third-party certification, to evidence the testing.
Products that exceed the applicable emissions limit are considered to be non-compliant. Non-compliant lots must be isolated and destroyed or disposed of, or treated and re-tested until they comply with the emissions limits. Sellers must notify purchasers, and, in certain circumstances, ECCC, within two days of discovering a non-compliance. If the person who sold the products is the manufacturer or importer of the product, they must provide written notice to the ECCC in that same timeframe.
Before a composite wood panel or laminated product is imported or sold in Canada, the importer, manufacturer or seller must ensure that a qualified third-party certifier (TPC)1 has certified that such products do not exceed the applicable formaldehyde emissions limit based on at least five primary tests and five QC tests.
The manufacturer of the panels or laminated products is the entity responsible for engaging the certifier and obtaining the original declaration of certification (Declaration). The Declaration will then be passed down the supply chain from panel manufacturers, to finished goods manufacturers and ultimately to retailers, ensuring that any panels incorporated into a finished good product line have been certified. Importers and resellers must ensure that they obtain a copy of the Declaration from their vendor.
Products that are already certified for their formaldehyde emissions under U.S. TSCA Title VI will meet CANFER's certification requirements.
CANFER also imposes extensive requirements with respect to labelling. Before importing or selling composite wood products in Canada, manufacturers and importers must label all applicable composite wood panels and laminated products, as well as finished goods incorporating such products in accordance with the regulation.
According to ECCC, products with a U.S. TSCA Title VI label will be accepted for CANFER purposes as long as they meet the bilingual French/English labelling requirements.
4. Self-Identification Reporting
Annual reports are not required under CANFER, however all manufacturers, importers and sellers of composite wood products in Canada must have submitted a one-time self-identification report to the ECCC by March 8, 2023. This information must be updated when there are changes from the original report.
CANFER imposes a number of additional record keeping requirements depending on the regulated party and the product, including relating to TPC qualifications and verification, primary test information, manufacturing changes, etc. If a regulated party fulfills more than one role (e.g., acts as both an importer of panels and manufacturer of finished goods containing formaldehyde), they must comply with all record keeping requirements applicable to each of their activities.
Potential Challenges under CANFER
CANFER applies to all parties across the supply chain, including manufacturers, importers, and sellers of composite wood products. While the regulatory burden is largely borne by manufacturers for testing and certifying the products, small businesses and retailers must be aware of their documentation and record-keeping obligations. Additionally, CANFER and Title VI do not completely align, including with respect to bilingual labelling requirements in Canada and exemptions in the United States that do not exist in Canada, including exemptions for antiques and secondhand furniture. Small businesses may therefore need to dedicate additional resources to understanding and implementing their regulatory requirements under CANFER.
Bennett Jones has extensive knowledge and experience in the regulatory and international trade spaces and is well-positioned to help your business address any questions or concerns regarding the recent changes. If you want to learn more about the potential impacts of CANFER, please contact the authors or another member of our Product Regulation or International Trade & Investment group.
1 Qualifications for TPCs are set out in section 18 of the Regulations: TPCs 1) are accredited under the International Organization for Standardization standard ISO/IEC 17065; 2) have a scope of accreditation that includes composite wood products and either these Regulations or TSCA Title VI; and 3) are an accredited laboratory in accordance with the Regulations.