In an unprecedented move, Health Canada has cancelled its recall of children's jewelry sold by Canadian retailer Ardene after follow-up tests found the pieces don't actually contain excessive amounts of lead.

It's the first time that a recall notice for a consumer product has been removed since the Consumer Product Safety Act came into force in 2011. Health Canada says the error might be the result of problems with new testing equipment.

Two necklaces sold by Ardene jewelry were recalled by Health Canada earlier this month after the agency found high amounts of lead. But Health Canada cancelled the recall after conducting follow-up tests and finding no such problem with the jewelry. (Health Canada )

On May 5, Health Canada issued a national alert for Ardene necklaces with pendants shaped like a watermelon and a cactus, as well as two hearts inscribed with the words: "Best" and "Friends." It said the pendants contained lead in levels exceeding federal guidelines.

Lead is a toxic substance that, if ingested, can lead to liver and other organ damage or failure, permanent injury and death. Young children who might put the jewelry in their mouth are considered most at risk.

It was the seventh recall for the popular fashion retailer in the past decade. Five of those recalls were for lead levels above Health Canada's guidelines.

Ardene said it made several safety improvements in 2016, including implementing a new testing regime, sending staff to its suppliers in China and insisting lead not be used in any of its products.

The retailer complied with the recall even though it disagreed with Health Canada's findings from the start. The company immediately had the pieces tested at independent labs in China and the United States, and said both results showed lead levels weren't over the limit.

​As the recall was initiated and products were pulled from store shelves, Health Canada re-tested the sample and found different results — but only for the Ardene jewelry. Two other products tested by the same equipment were confirmed to have problems, and those safety alerts remain in effect.

Health Canada has acknowledged the problem and says it has stopped using the new equipment until it can re-train lab staff and develop a new protocol for proper use of the equipment.

China is the capital of costume jewelry

According to Health Canada, lead is sometimes used to make costume jewelry because it's cheap and easily moulded.

Nearly all costume jewelry in the world, including the items in question from Ardene, is produced in the industrial Chinese city of Yiwu. The city is known to have a wide range of factories, from large-scale operations with on-site labs and strict standards to renegade operations with little regard for safety.

Lead was once a staple in jewelry, but retailers began demanding its removal from the manufacturing process.

As retailers shifted away from lead, many manufacturers began to substitute with cadmium. Ardene products have previously been recalled for cadmium levels exceeding Health Canada guidelines. In 2015, Marketplace collected jewelry samples from stores and asked researchers from the University of Toronto and École Polytechnique de Montréal to test them.

In one case, they found that a blue pendant on an Ardene necklace was nearly 100 per cent cadmium.

This blue triangle pendant was found to be 99.6 per cent cadmium during tests conducted by Marketplace in an investigation that aired in January 2016. (CBC)

Health Canada introduced stricter limits on cadmium and lead in children's jewelry following the Marketplace report.

Supply chain managers in China recommend constantly testing products before they reach consumers to ensure factories don't create a "clean" batch without lead and then produce the remainder with the low-cost metal.

As a result, they recommend repeated testing, though it increases the cost of each item.