Beware of the gap (electric bike): how to proceed with product recalls in the event of a regulatory gap

The e-bike market is booming – the number of bike manufacturers, retailers and models in Canada continues to grow. But as consumer interest in e-bikes grows, regulatory interest in e-bikes, or e-bikes, also known in Canada as power-assisted bicycles or e-bikes,[1] is in decline. After the changes, most e-bikes were excluded from regulation by Transport Canada under the Motor Vehicle Safety Act (“MVSA”) and Motor Vehicle Safety Regulations (“MVSR”), e-bikes have apparently fallen into a regulatory vacuum rather than being regulated by Health Canada under the Canada Consumer Product Safety Act (“ACPCS”). Under these circumstances, e-bike manufacturers and retailers could understandably find themselves turning the page trying to figure out what to do if an e-bike needs to be recalled in Canada.

Transport Canada is stepping up a gear

As of February 2021, the MVSR no longer includes the definition of an “electrically assisted bicycle”. According to Transport Canada, the following features exclude e-bikes from regulation under the MVSA/MVSR:

  • conventional pedal bicycles with gasoline or electric motor assistance; and
  • do not exceed a speed of 32 km/h (or 20 mph).

There are e-bike designs and features that may bring vehicles in this broad class within the definition of a “prescribed vehicle” under the MVSA. A thorough review of e-bike features should be undertaken when considering selling a new e-bike in Canada. However, generally speaking, this legislative change removed e-bikes from Transport Canada’s regulations. When assessing whether an e-bike is regulated or not, Transport Canada considers:

  • how closely it resembles a type of road vehicle prescribed under the MVSA; if a product is equipped with features that resemble classes of prescribed road vehicles, such as motorcycles or scooters, they will be regulated as such.
  • If the product is exclusively off-road and the maximum speed of the electric bicycle is 32 km/h (in fact or due to a speed control mechanism which, in the assessment of Transport Canada, validly limits the speed maximum speed to 32 km/h), the electric bicycle is exempt from the MVSA/MVSR.

Where the MVSA and MVSR prescribe safety standards for a vehicle, importers must notify the Minister of Transport (Transport Canada) and vehicle owners of any safety defect or non-compliance with the regulations (unless , in the case of non-compliance, it is deemed to have no impact on safety). However, there are no reporting requirements for unregulated vehicles, which means that a seller of an “unregulated” e-bike in Canada is not required to report any safety defects through the Transport Canada’s regulatory regime.

Health Canada deviations

Since Transport Canada declines jurisdiction over e-bikes, the natural heir to the regulations should be Health Canada, which administers the CCPSA. Health Canada has always assumed jurisdiction over electric bicycles. However, in recent months, in our experience, Health Canada has refused to assume jurisdiction over e-bikes, on the grounds that the products could eventually be used on the roads. CCPSA management determined that the product falls within the definition of “vehicle” under the MVSA (despite the legislative amendment noted above) and is therefore exempt from the CCPSA under Schedule 1, Section 7, which excludes from Health Canada’s scope all “vehicles” under the MVSA.

Therefore, an e-bike may be an unregulated vehicle under the MVSA/MVSR, yet still be considered a “vehicle” by Health Canada and therefore unregulated under the CCPSA.

But a reminder is necessary: ​​what should an importer/distributor/manufacturer of electric bicycles do?

With Health Canada’s decision to decline jurisdiction, e-bikes are in a gray area, where neither Transport Canada nor Health Canada has control over monitoring incident reports and posting/coordinating recalls.

However, best practices dictate that a business should always be vigilant when responding to incidents. Where there is no reporting requirement or oversight by a Canadian regulator, a company should still follow normal procedure and protocol with respect to recalls and corrective actions, as they would normally with regulatory oversight. The agreement includes posting the recall on social media and the company’s website, tracking consumer interactions related to the recall, and tracking products affected by the recall. This type of behavior will protect businesses from potential product liability claims and provide a good defense against a claim.

Additionally, nothing prevents a company from reporting an e-bike incident to Transport Canada and Health Canada, for the sole purpose of obtaining written confirmation from regulators that the product is outside of their regulatory jurisdiction. As is often the case, being a corporate citizen will pay off in the long run.

Note on additional provincial monitoring

Each province regulates e-bikes under its own legislation, defining them based on criteria such as horsepower, pedal control, wheel size and speed; and these regulations establish requirements for vendors and riders (such as certifications, seat height, helmets, rules of the road, insurance, etc.). Many of these regulations were developed to align with the definition of “electrically assisted bicycle” which was removed from the MVSR and may soon be updated. A review of current provincial and federal regulations for manufacturers, retailers and riders should be undertaken before importing and selling e-bikes in Canada.

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