Tests are turning up dangerous levels of lead in children's jewelry and the federal government can't compel companies to recall the toxic trinkets, an auditor's report reveals.

The Auditor General's commissioner of the environment and sustainable development, Scott Vaughan, points out in his report that Health Canada must instead ask industries to recall products containing "hazardous levels" of lead and hope they voluntarily comply.

There's currently legislation before Parliament that would give Health Canada the power to force companies to recall products, Vaughan says in his annual report.

The agency has been trying to get companies to stop selling children's jewelry containing lead for a decade, ever since a five-year-old child's blood tests turned up high levels of the toxic metal that were traced back to a trinket.

But industry pushed back when Health Canada tried to put limits on lead in jewelry and considered putting warning labels on any baubles containing the metal.

The federal Hazardous Products Act bans high levels of lead in children's jewelry. But it doesn't let Health Canada force companies to do recalls, so the department's hands are tied even if it finds lead-laden products, Vaughan says in his report.

Better labelling

He suggests a better system to warn Canadians about their exposure to toxic substances in everyday consumer items. Current product labelling doesn’t clearly disclose the risks posed by toxic substances that are used in everyday products.

"Canadians are not fully informed about these risks and may not be taking appropriate precautions to protect themselves," the report says.

It's not that Ottawa hasn't identified toxins. In 2006, the government compiled a list of more than 4,300 toxic substances it was evaluating.

But the report points out there are no labels on everyday products that contain those toxins, many of which could have long-term effects on human health.

For example, lead and mercury — which have both been linked to brain and nerve damage — are commonly found in products such as batteries, fluorescent light bulbs and children's jewelry.

But those products have no labels to warn consumers about potential effects on their health.

Paint stripper, another common household product, contains dicholoromethane, which is a possible carcinogen.

Phthalates, also known as DEHP, are also commonly found in plastic products and soft vinyl toys. They’ve been linked to cancer and disrupted hormonal development in children, Vaughan says in his report.

He has recommended the federal government move to provide better information about the effects of toxic substances that present a chronic hazard to human health.

With files from Margo McDiarmid of CBC News and The Canadian Press