The department says the powerful magnets contained in the beads pose a safety risk if accidentally swallowed by children.
Health Canada is aware of two serious incidents in Canada involving children who swallowed these types of beads.
And it says there have been many reports from other jurisdictions of children requiring emergency surgery to remove magnetic beads they have ingested.
The department says if a child swallowed more than one of these powerful magnets, they could twist the intestines and create blockages that could prove to be fatal.
The U.S. Consumer Product Safety Commission recently asked companies to stop the production, importation, distribution or sale of sets of small, powerful, individual magnets following a number of incidents in the United States.
Health Canada product safety inspectors are currently visiting toy stores and other retailers across the country to get a sense of how these products are marketed.
The information gathered will be used by the department in its assessment of these magnetic beads.