In the wake of U.S. tariffs and tariff threats, Canadians are opting to “buy Canadian.” If you are thinking of showing off your products’ Canadian roots with the use of “Made in Canada,” “Product of Canada” or Canadian symbols in labelling and marketing claims, here are some things you should keep in mind to avoid significant legal, financial and reputational risks.

The legal framework

Canadian origin claims are governed by the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act, the Food and Drugs Act and/or the Safe Food For Canadians Act (collectively, the “Acts”). These Acts ensure that companies do not make false or misleading claims regarding the origin of consumer goods and food products.

Representing Canadian consumer goods

The Competition Bureau has issued guidance to assist in interpreting the Acts in relation to consumer goods (the “Guideline”).[1] The Competition Bureau differentiates between “Product of Canada” and “Made in Canada” claims based on the percentage of Canadian content. For both claims, the last substantial transformation of the product must have occurred in Canada.

In order to be considered a “Product of Canada,” 98% of the total direct costs of producing or manufacturing the good must have been incurred in Canada. In comparison, a “Made in Canada” claim only requires 51% of the total direct costs of producing or manufacturing the good to have been incurred in Canada. Made in Canada claims must also be accompanied by a qualifying statement indicating the presence of imported content (e.g., “Made in Canada with domestic and imported parts” or “Made in Canada with imported parts”).

If neither of these claims apply but your product still utilizes some Canadian content, the Competition Bureau suggests the use of more specific terms that reflect the Canadian activity, such as “Assembled in Canada with foreign parts.”

Representing Canadian food products

The Food and Drugs Act and Safe Food for Canadians Act prohibit false and misleading claims regarding food products. Made in Canada claims regarding food products can be assessed by both the Canadian Food Inspection Agency (“CFIA”)[2] and by the Competition Bureau under its Guideline discussed above. Similar to consumer goods, food products labelled as “Made in Canada” must have their last substantial transformation in Canada (e.g., turning dough, cheese, and tomato sauce into a pizza) and must include an applicable qualifying statement clarifying whether the product is made with imported ingredients or a combination of imported and domestic ingredients.

To be a “Product of Canada” or “Canadian” food product, all or virtually all of the major ingredients, processing and labour must be Canadian / completed in Canada, as applicable. The non-Canadian material in the food product must be negligible (e.g., low level ingredients, like spices or food additives, that make up less than 2% of the product can be imported). Because of these stringent requirements, products that are exported and then re-imported into Canada generally would not be able to be called a “Product of Canada.” Certain types of food such as meat and poultry, fish and seafood, dairy and eggs, have more specific requirements for being labelled a “Product of Canada.”

Use of Canadian symbols

The use of a Canadian flag or maple leaf on a product may imply a “Product of Canada” or “Made in Canada.” To avoid misleading consumers, a domestic content statement should accompany the symbol. In addition, the use of the National Flag of Canada and official stylized 11-point maple leaf require permission from the Department of Canadian Heritage.[3]

Ad Standards’ guidance – General impression test

Recently, Ad Standards Canada, an advertising self-regulatory organization, released an advisory on “Made in Canada” type claims under the Canadian Code of Advertising Standards.[4] In addition, to the guidance provided above, Ad Standards pointed to their recent decisions regarding Canadian product claims. Overall, the Ad Standards Council emphasized the importance of clear and accurate advertising. When assessing the truthfulness and accuracy of a message, the focus is on the general impression conveyed by the advertisement. For example, in one case, “Proudly made in Canada” claims made on the main website page of a company were found to be misleading as the website did not make it sufficiently clear to consumers that the Canadian origin claim only applied to specific products listed on the website. Similarly, advertising by a non-Canadian owned company which stated that it was “Truly Canadian” was found to be misleading despite the fact that the company had previously been Canadian owned and had leadership within Canada.

We also note that the manner in which a qualifying statement is made for a “Made in Canada” claim should be considered. While the use of disclaimers and asterisks are generally permitted under advertising and marketing law in Canada, these types of qualifiers should only be used for adding useful information, expanding upon, or otherwise clarifying potential ambiguities of a statement that is already truthful and accurate in the main statement. Any additional information provided by way of a qualifier must not be used to restrict, contradict or somehow negate the main message to which it relates. The language in such qualifiers should also be clear, legible and placed in a location where the consumer is unlikely to miss it.

Enforcement and competitor disputes

Given the current economic and political climate, we are also seeing increasing scrutiny by companies of “Made in Canada” type claims made by competitors. In some cases, companies may choose to file a complaint with the Competition Bureau.  Alternatively, companies may utilize the Ad Standards Canada’s Competitor Dispute Process.  This dispute process is a forum for having such claims reviewed by a panel of advertising law experts to determine the validity of the claims. Generally, this review would only occur if efforts to resolve the dispute directly with the competitor were not successful. We note that the parties to the dispute would not be allowed to disclose or discuss publicly the final decision (except within their respective organizations). This procedure is not meant to punish the advertiser and would instead typically result in the removal or amendment of the improper advertisement.

A Competition Bureau investigation resulting in a finding of false and misleading claims for consumer goods can also result in steep penalties under the Competition Act.  These penalties can include: orders to cease the conduct, publication of correction notices and, for corporations, administrative monetary penalties of up to $10 million or three times the value of the benefit derived from the conduct or, if that amount cannot be determined, three percent of the corporation’s worldwide gross revenue.

Conclusion

While promoting your products’ Canadian origins can be an effective marketing technique during the current surge in patriotic consumerism, it is important to be aware of the rules and regulations to avoid penalties and maintain consumer trust.

Should you have any questions regarding product claims including Canadian origin claims, please reach out to any member of Miller Thomson’s Marketing, Advertising, and Product Compliance team.

[1] Enforcement Guidelines, “Product of Canada” and “Made in Canada Claims”, Competition Bureau, 22 December 2009, online: https://competition-bureau.canada.ca/en/guide-consumer-packaging-and-labelling-act-and-regulations

[2] Origin claims on food labels, Canadian Food Inspection Agency, 6 December 2023, online: https://inspection.canada.ca/en/food-labels/labelling/industry/origin-claims#s1c5

[3] Ibid.

[4] Advisory on the Meaning of “Made in Canada” and Similar Claims under the Canadian Code of Advertising Standards, Ad Standards, online: https://adstandards.ca/code/ad-standards-advisories/advisory-on-the-meaning-of-made-in-canada-and-similar-claims-under-the-canadian-code-of-advertising-standards/