Amid changing global trade policies and fresh off Canada’s thrilling Four Nations Cup hockey victory over the U.S., national pride is running high. As more Canadian consumers are demonstrating an increased preference for homegrown products over imports, businesses may be seeking to join in this patriotic fervour and amplify their Canadian identity by incorporating “Product of Canada” or “Made In Canada” labels into their marketing playbook.

However, overstating a product’s Canadian origins can create legal, financial, and reputational risks. Before slapping a “Product of Canada” or “Made In Canada” label on their product, companies should ensure they’re not going offside Canadian competition and advertising law.

The Competition Bureau (the “Bureau”) administers and enforces statutes designed to prevent false or misleading representations regarding the origin of products. The principal legislative instruments include the Competition Act, the Consumer Packaging and Labelling Act, and the Textile Labelling Act. These statutes collectively aim to preserve fair competition and protect consumers from deceptive marketing practices.

Set out below is an overview of the legal and analytical framework for “Product of Canada” or “Made In Canada” claim in Canada, together with salient takeaways for businesses. 

Legislative Framework

(a) Competition Act

By way of background, the federal Competition Act is Canada’s primary statute governing consumer protection.  The Competition Act contains consumer protection provisions focused on deceptive marketing practices. They contain civil and criminal provisions that capture virtually all forms of advertising and marketing practices.  At a high level, the Competition Act’s deceptive marketing practices prohibit materially false or misleading representations made to the public for the purposes of promoting a product, service, or business interest. 

When determining whether a representation is false or misleading, the Bureau will take into account the general impression conveyed by the representation, in addition to its literal meaning.

Country of origin claims can be captured by these Competition Act provisions. Civil penalties include administrative monetary penalties (“AMPs”). For corporations, the maximum available AMPs are C$10 million and three times the value of the benefit derived from the deceptive conduct, or, if that amount cannot be reasonably determined, three percent of the corporation’s annual worldwide gross revenues.

(b) The Consumer and Packaging and Labelling Act and Textile Labelling Act

The Bureau also enforces the Consumer Packaging and Labelling Act (“CPLA”) and the Textile Labelling Act (“TLA”). The CPLA prohibits false or misleading representations on pre-packaged products, including country of origin claims made by businesses. The TLA prohibits false or misleading representations regarding textile articles, including false or misleading country of origin claims.

Guidelines on “Made in Canada” and “Product of Canada” Representations

Determining whether a product qualifies as “Made in Canada” can be complex, as businesses often source materials and labour globally. In 2009, the Bureau published Enforcement Guidelines Relating to “Product of Canada” and “Made in Canada” Claims (the “Guidelines”). The Bureau’s Deceptive Marketing Practices Digest — Volume 4, published in 2018, confirm the approach taken in the Guidelines and delineate the criteria for lawful use of “Made in Canada” and “Product of Canada” claims.

The Bureau evaluates such claims from three different perspectives: where the direct costs of manufacturing were incurred, where the last substantial transformation of the good took place, and the representations themselves and the general impression they create.

• “Product of Canada”: According to the Bureau, this designation is appropriate when a minimum of 98% of the total direct costs of producing or manufacturing the good are incurred in Canada, and the final substantial transformation of the product occurs domestically.
• “Made in Canada”: According to the Bureau, this label applies when at least 51% of the total direct production or manufacturing costs are incurred in Canada, the last substantial transformation of the good occurred in Canada, and the claim is accompanied by a qualifying statement (e.g., “Made in Canada with imported parts”) to provide consumers with accurate information.

According to the Bureau, if a product does not qualify for either a “Product of Canada” or “Made in Canada” claim, businesses that wish to highlight a Canadian element should clearly specify the production or manufacturing activity that occurred in Canada. For example, they might use phrases like “Assembled in Canada with foreign parts” or “Sewn in Canada with imported fabric.” These representations should be accurate so that consumers understand they refer to a specific production process or part, rather than suggesting the product as a whole was manufactured in Canada.

Conclusion

Businesses should be prepared for increased scrutiny of their advertising practices as consumers seek and rely upon “Made in Canada” and “Product of Canada” claims in their purchasing decisions. Failing to comply with the law or maintain advertising practices consistent with the Digest and Guidelines outlined above could invite scrutiny from the Bureau or lead to private enforcement through class actions. The upcoming introduction of private applications to the Tribunal in June 2025 further increases legal and reputational risks for businesses.

If you have questions about “Made in Canada” claims, you can reach out to any member of Fasken’s Competition, Marketing & Foreign Investment group. Our group has significant experience advising clients on all aspects of Canadian competition law.

The information and guidance provided in this blog post does not constitute legal advice and should not be relied on as such. If legal advice is required, please contact a member of Fasken’s Competition, Marketing & Foreign Investment group.