An insulation company in Ontario said Wednesday that its product is "safe" and "stable" even though Health Canada has ordered it to stop installing insulation that contains urea formaldehyde.

Health Canada has issued a cease-and-desist order against RetroFoam of Canada, a company based in Breslau, Ont., near Waterloo. The company installs insulation through a network of dealers.

The insulation is known as Polymaster R-505 but is branded as RetroFoam insulation. Urea formaldehyde was banned in Canada in December 1980 because of health concerns.

RetroFoam Canada said in a news release that Health Canada issued the order because of "strictly a legal technicality" and it said on its website that it plans to use a "new product formulation" when it insulates homes to ensure it complies with existing regulations.

It said it also plans to reclassify the product that it has been ordered not to sell or install.

"The insulation is stable and does not de-generate or lose its performance over time," RetroFoam said in the release. "This product is being utilized on an ongoing basis internationally and the rate of installations are rapidly rising."

Health Canada said Retrofoam Canada, which operates mainly in southern Ontario, installed the insulation in a "limited" number of homes in the province.

According to Health Canada, urea formaldehyde insulation is prohibited in Canada because it may release formaldehyde gas into indoor air.

Health Canada, which said it is reviewing its legal options, plans to contact homeowners about having their air quality tested and will set up a 1-800 number for inquiries.

It has also ordered Enerliv, the Canadian distributor of RetroFoam, to "stop all sale, advertisement and further installations of the product and to call back any unused product."

With files from the Canadian Press