Monday, August 16, 2010

Labelling Non-Food Products – Enforcement Guidelines for “Product of Canada” and “Made in Canada” Claims Now in Effect

(Ian K. Bies and Emily Rix, McCarthy Tétrault LLP)

Manufacturers and processors making “Product of Canada” and “Made in Canada” claims on non-food products will now have to comply with new guidelines from the Competition Bureau – or risk enforcement action. The enforcement guidelines, which recently came into effect, describe the Bureau’s approach to assessing these claims under the false or misleading representations provisions of the Competition Act, the Consumer Packaging and Labelling Act, and the Textile Labelling Act.

The guidelines set out the approach the Bureau will take in determining when it will investigate claims for non-compliance, or undertake enforcement action under the false or misleading representations provisions in these acts. The guidelines were released following public consultations last summer on a draft version of the guidelines, and replace the Bureau’s 2002 Guide to “Made in Canada Claims” Enforcement Guidelines.

The guidelines create a distinction between “Product of Canada” and “Made in Canada” claims for non-food products. “Product of Canada” claims are subject to a higher, “all or virtually all” 98% threshold of Canadian content (i.e., at least 98% of the total direct costs of producing or manufacturing the product must have been incurred in Canada). “Made in Canada” claims remain subject to a 51% content threshold, but should be accompanied by a statement declaring that the product contains imported content. In both instances, the last substantial transformation of the product must have occurred in Canada. Read more here.